November 19: The inflation of land and house prices declined in the current fiscal year compared to the last fiscal year. This was revealed by a survey conducted by Nepal Rastra Bank (NRB).

According to the House Price Index (HPI) Survey Report prepared by the central bank, the annual inflation of house/land prices on the basis of data collected from commercial banks in the fiscal year 2020/21 was 26.45 percent while the rate of inflation according to the data collected from the Land Survey Offices was 19.73 percent. Inflation in this sector in the first nine months of the current fiscal year (FY 2021/22) was 16.31 percent and 12.57 percent respectively.

The survey report concluded that the inflation in the first nine months of the current fiscal year was less than the previous FY due to the slump in land/house transaction in the current fiscal year.

The central bank prepared the House Price Index (HPI) Survey Report for the first time in line with the monetary policy to achieve monetary and financial stability as well as to prepare macro-prudential regulation.

The Financial Sector Development Strategy (2074-2077/78) had given the responsibility of conducting the House Price Index Survey to the NRB. According to the central bank, it conducted the survey considering FY 2075/76 as the base year.

The study was conducted in 20 places of 20 different districts taking into consideration the geological aspects, transaction and availability of data. Out of the selected clusters, the survey was focused in areas where land-related transactions were maximum, NRB said in a statement on November 19.

The central bank conducted the survey on the basis of two major sources – one of them being the transaction record while registering the land transfer at the Land Survey Office and the other being the evaluation done by banks and financial institutions while providing loan by keeping land ownership certificate as collateral.

According to the NRB, the HPI Index was prepared to measure the fluctuation in prices of houses and land as well as inflation of land/house prices.