Realty sector moving at snail's pace, says data

The realty business has dropped by one-third, according to data from the Land Revenue Office. However, chief of Dillibazar Land Revenue Office Prem Bahadur Khapangi claimed that the realty business has not dropped but is in progressive state. "During the fiscal year 2007-08, revenue worth Rs 1.10 billion was generated from the sector and it increased to about Rs 1.55 billion in the fiscal year 2008-09," he said during a programme organized.

However, records at the Dillibazar Land Revenue office depict a different picture. The government had a target of collecting Rs 110.85 million revenue during the month of June. It was able to collect only Rs 80.39 million, data from the office revealed. Similarly, in July the government's revenue target was Rs 120 million but the office was able to collect Rs 110.75 million only.

Economist Rewat Bahdur Karki suggested that Nepal Rastra Bank (NRB) strengthen its monitoring capacity in order to save commercial banks from investing in land financing. "Banking sector is an important part of economy. Since real estate business is a risky one, the sector has to be careful while investing in it," he said adding that the loss of banking sector would affect the national economy as a whole. Karki also suggested the banking sector invest in productive sectors rather then investing in non-productive sectors like land and housing.

Department of Land Management and Development managing director Rajendra Prasad Sharma said that the government has been developing land policy in order to manage the real estate sector. "The zoning processes are going on according to the national land-use policy," he said adding that the government has targeted to establish 20 more Land Revenue Offices in the country this year — out of a total target of 85 new offices. "The remaining 65 Land Revenue Offices will be established next year," he added.

Basically remittance and security are the key factors in pushing up land and housing prices. During the decade-long conflict in the country, land and house prices especially in Kathmandu Valley increased unbelievably due to insecurity in the districts. Most of the people moved to their respective district headquarters and Kathmandu Valley due to bad law and order situation. However, after the Maoists joined mainstream politics, the trend slowed.
Source: THT