Nepal's Real Estate Market Shows Signs of Improvement in Transactions

Kathmandu. Nepal's real estate business, which has been facing a recession for a long time, has shown signs of improvement. Data from land administration offices across the country shows a significant increase in overall real estate transactions in the month of Baishakh this year compared to the month of Baishakh last year.

In the month of Baishakh last year, a total of only 144,000 transactions took place across the country, while in the same period this year, this number has increased to 169,000. Overall, there has been an increase of approximately 17.70 percent in the services provided by land revenue offices and total transactions across the country.

The main indicator of the real estate business is the execution of deeds, i.e., the buying and selling of land. This year, there has been a significant improvement in the number of deed executions.

In the month of Baishakh last year, 52,415 deeds were executed across the country, while in the same period this year, 58,886 deeds were executed. Looking at this data, there has been a 12.34 percent increase in actual land transactions. Investors and the general public are being attracted to buying and selling real estate again due to the decrease in economic slowdown, availability of liquidity in banks and financial institutions, reduction in interest rates, and the government's slightly relaxed policy on land parceling.

• More Transactions in MoFasal, Highest in Dang

In Baishakh this year, the trend of buying and selling real estate has been higher in the main cities of MoFasal (outside the federal capital Kathmandu Valley) compared to the federal capital Kathmandu Valley.

The biggest increase in actual transactions has been seen in Dang district. Transactions have surged in the Tulsipur and Ghorahi land revenue offices of Dang compared to the previous year. Similarly, high growth in real estate transactions has also been observed in Dhangadhi of Kailali in the Sudurpashchim Province, Bhadrapur in Jhapa of the Koshi Province, and Butwal in Rupandehi of the Lumbini Province.

Within the Kathmandu Valley, data shows that the attraction for buying and selling has increased the most in Lagankhel of Bhaktapur and Lalitpur.

• No Improvement in Loan Disbursement

Despite the increase in transaction amounts, there has been no expected improvement in loans taken against real estate as collateral. The fact that the number of releases is higher than the number of freezes during this period indicates this situation.

Last year, 35,865 properties were frozen, while this year 35,994 have been frozen. This shows that people have not significantly increased taking new loans. However, the rate of releasing land after repaying bank loans has increased by 20.15 percent. Last year, 30,101 were released, and this year the number has increased to 36,169.

• Gen Z Movement Puts Pressure on Record Updates

Apart from buying, selling, and financial transactions, there has been excessive pressure on administrative and record update tasks in land revenue offices this year. In particular, there has been a high increase of 102.44 percent in the work of correcting or amending land details.

Last year, only 9,884 amendments were made across the country, while this year the number has increased to 20,010. Similarly, the process of 'Hāl Sābik' (updating land records to current status) has also increased by 40.25 percent, and the work of obtaining copies has also increased by 28.94 percent.

The overall number of transactions has surged this year due to such administrative work, which was affected by the Gen Z movement last year. The Nepalgunj land revenue office in Banke and the Thankot land revenue office in Kathmandu are prime examples of this.

In Nepalgunj, only 58 amendment works were done last year, while this year 4,834 have been done. Similarly, in Thankot, amendments increased from 101 last year to 2,727 this year.