In the last financial year 2079/80, there was a significant decrease in real estate transactions, according to data from the Department of Land Management and Archive. The purchase and sale of land dropped by approximately 38%, resulting in a decrease in the number of processed documents for real estate transactions. In the financial year 2078/79, around 745,000 documents were processed, but in the last FY 2079-80, this number was limited to around 463,000.
The decline in land transactions was evident in Ashad, the last month of the financial year 2079-80, with only 44,485 documents being processed compared to 55,069 documents in Jestha, which recorded the highest transactions for the financial year. The Department of Land Management and Archive reported that 42,461 land deeds were processed in Baisakh, and 49,150 in Chaitra. The numbers gradually decreased until Asoj when it dropped to about 26,000, but then it began to increase slowly again.
The slowdown in real estate transactions had a significant impact on the government’s revenue collection. The real estate revenue decreased by about 29%, totaling only Rs. 41 Arba 15 crore 76 lakhs in the last financial year, compared to Rs. 57 Arba 66 crores 99 lakhs the previous year.
The plotting of land also decreased considerably, with a 60% drop compared to the financial year 2078/79. In FY 2079-80, 285,000 plots were divided, whereas in FY 2078/79, 694,213 plots were divided.
To address the slowdown in land transactions and its impact on the overall economy and government finances, the government had planned to open the allocation of land. However, the Land Management and Archive Department has not yet issued any instructions or circulars to do so, and the situation remains unchanged.
The legal knot to open the land auction needs to be untied, and the First Amendment Regulations-2079 require amendment to open the land registry. The Ministry of Land Management, Cooperatives, and Poverty Alleviation is currently preparing for this.
In recent days, the real estate business has shown signs of improvement due to the increase in investable capital in banks. As banks started accumulating investments, investments in real estate have started to increase again.
Despite the announcement to facilitate the sale of real estate and the decision of the Council of Ministers to open the section, the implementation has been delayed. The Nepal Land & Housing Developers’ Association is urging the government to implement the decision and release Kittakat, claiming that the overall economic activity of the country is slowing down because the real estate sector is not functioning.