Real Estate Business is down by one third in Kathmandu
Sales and purchases through real estate agencies had completely stopped from last two-and-a-half months during the lockdown and even though the Land Revenue Office has been open since June 7
Since the government imposed the nationwide lockdown on March 24 to control the spread of the coronavirus, transactions in the real estate sector have dropped by around 35 percent as compared to the months before the lockdown.
Although other businesses have started returning to normal since June, the real estate business has declined by more than one-third, according to the Land Revenue Office (LRO) in Kalanki.
The real estate turnover in Kathmandu declined by 35 percent in June as compared to the turnover in February.
As per the Land Revenue Office, there were transactions of 1,234 units of houses and land in January and 1,269 units of houses and land in February. “However, we witnessed only 861 transactions in June,” said Nilkantha Kafle, information officer at the Kalanki Land Revenue Office.
Similarly, the revenue collected from the real estate business has also declined by one-third. In February, the LRO in Kalanki had collected Rs 292.77 million in revenue from the real estate business. However, only Rs 193.67 million revenue was collected in June, informed Kafle.
Moreover, loans from banks and financial institutions in the real estate business have also slowed down. According to Bhuvan Dahal, chief executive officer of Sanima Bank and president of Nepal Bankers’ Association, only loans that were approved before the lockdown was imposed are being disbursed and very few new loans have been approved in recent days.
“Rather than new business, more work is being done now to sort out the old paper works,” said Dahal, adding that loans to the real estate sector could increase after the summer as banks have ample liquidity.
Meanwhile, sales and purchases through real estate agencies had completely stopped for two-and-a-half months during the lockdown and even though the Land Revenue Office has been open since June 7 real estate transactions have been sluggish.
Binod Subedi, general secretary of Nepal Real Estate Organisation, informed that at present only works related to transferring the ownership of houses and land that were sold before the lockdown are being done. “Most potential buyers are in a wait-and-watch mode expecting prices to drop due to the impact of the coronavirus,” he added.
Meanwhile, Janak Raj Joshi, a joint secretary at the Ministry of Land Management, Cooperatives, and Poverty Alleviation, said that real estate transactions have sharply dropped across the country due to COVID-19. “We have received information from our offices that transactions have dropped by almost 70 percent on average across the country,” he said.