After a two-year transi tional period of ups and downs, the real estate sector is finally stabilising and stakeholders expect the new year to bring good tidings and recovery. Those involved in the sector believe that dipping of interest rates by banks and financial institutions (BFIs), government's new flexible rules, budget, transparent policies of developers and awareness among genuine customers will see real estate expand and revive this year.
Bijay Rajbhandary, managing director of CE Construction, says, “We have all the positive signs that we will see growth in our sector this year.“ According to him, the stagnation in price of property till date makes it the right time to own a property. CE is in the designing phase and will introduce three new projects mid-year, which includes an apartment, commercial buildings and independent colony. “We predict customers will be willing to buy independent houses worth Rs 6 million and above some kilometres out of ring road, and apartments worth Rs 10 million in the city area, while we are also hopeful about the office based projects seeing better days in 2069,“ informs Rajbhandary.
Assuming the fresh projects that cater to the demand for facilities, comfort and quality will have a wide market, he says, “If developers do not mend their ways and maintain transparency, quality and efficiency while completing projects, they will not only lose the trust of customers but also never regain it. This is the time to build confidence for both customers and investors.“
On the other hand, Ichha Raj Tamang, president of Nepal Land and Housing Developers' Association and Civil Homes Pvt Ltd, assumes that the industry will not develop aggressively until the first quarter.He says, “The budget will decide whether the state of real estate sector will upgrade or degrade.“ Believing that the government will decide and come up with policies to provide relief to the sector, Tamang says 10 to 15 per cent growth is achievable per quarter and transactions will strengthen mid-year, as BFIs will make necessary corrections and come up with fresh loan schemes to serve those looking to buy homes.
He also feels that facilities like tax deduction, minimal registration charges and flexible rules and regulations could send a positive message and boost the industry. He says, “Failure in the past has been an eye opener for all concerned stakeholders and we expect everyone to handle issues pertaining to real estate more maturely in the coming year, based on the lessons learnt. Moreover, Nepal Rastra Bank (NRB)'s flexibility regarding home loans and plans to come up with new schemes to help government officials own a property will produce a new chunk of clients.“Tamang is hopeful that developers will produce the right products, determining the need and affordability for the right customer.
According to him, 70 per cent of all customers buy property to fulfil their personal requirements and only 30 per cent for investment purposes. Buddhi Narayan Shrestha, president of International Real Estate Federation (FIABCI) Nepal Chap ter, says, “The new year will see upward growth in transactions of housing and remain static in land develop ment.“ Informing that real estate takes at least six years to regain a cycle, Shrestha maintains, “After two years of tur moil, the new year should initiate a bright future for the industry.“
He proposes deducting custom rates on required materials for the industry, controlling unauthorised brokers and making soft home loans more accessible. “Nepal has no rules to regularise brokers, which results in artificial demand and market fluctuation.
Concerned authorities should think about this problem seriously,“ he suggests. According to him, there is a genuine demand for 23,000 units of housing in Kathmandu valley and till date housing companies have only been able to develop 10,000 units.
source: Awale, Sujata (2012),"Painting future and optimistic", The Himalayan Times,14 April 2012
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