January 19: The liquidity crisis in the banking sector has affected the real estate business in Nepal.
Hari Krishna Subedi, chief of the Kalanki Land Revenue Office, said that the real estate business has declined since the past four months due to the lack of liquidity in the banking sector. The real estate business in the Kathmandu Valley has slumped by 40 to 50 percent in the last two months compared to the previous year. However, the online system of the Department of Land Management and Records has shown inconsistent data of some offices.
The online data shows that the Kalanki Land Revenue Office has collected registration fee of Rs 560 million in November and more than Rs 510 million in December. However, the registration fee collected in November and December has not exceeded Rs 350 million, insists Subedi.
The Land Service Center shows the number of transactions and revenue in the system once it is entered even if there is no transaction. Therefore, the actual number of transactions and revenue collection is less than what the data of the Department of Statistics suggests.
Ichcha Bahadur Wagle, president of the Nepal Housing and Land Development Association, said he had seen such a recession only twice in his 20-year business journey.
"While all indicators of the economy are negative, the real estate business has also slowed down. Unless other indicators of the economy improve, the real estate business is unlikely to improve," Wagle said.
On the contrary, if this situation continues, many businessmen may get into trouble, he adds.
He claims that even though some of the people in trouble have sold the land at throw-away price, the price of the land has not gone down.
People sell their property at low price due to circumstances. Individuals have been doing that in the past and will continue doing so in the future based on their situation. However, the fact that a few people sold their land at less price does not mean that the overall price of real estate has decreased, he opined.