On the day in question, a piece of land in Otu near New Road, extending to about 1,200 square feet (or 3.5 annas in the locally-used unit of measure), traded at Rs 30 million per anna (342.25 square feet).
In all probability, this is the highest price at which land was been transacted in Kathmandu, perhaps even the country as a whole. According to officials, the price was 24 times higher than the government valuation for that area, which stands at around Rs 1.25 million per anna.
Under government valuation, land in the New Road, Jamal and Kingsway areas costs the same. But in market value, dealers said land in New Road and Kingsway is more expensive than in Otu, barely 500 meters from New Road.
However, as transactions in New Road and King´s Way have not been recorded recently, the transaction in Otu has set a new record.
Prices double in six months
A report on land prices prepared by the Department of Land Revenue (DoLR) has found that prices in the Valley have doubled in the past six months.
Zinc sheets replace thatched roofs in Galkot-3
The study suggests the land price rise has been the sharpest ever. Over the previous six years, land prices have otherwise doubled every two years on average, a period during which buying pressure ruled the realty business.
The report credits ever-growing migration, strong demand, easy financing and soft credit for the two-fold rise in Valley land prices over the last six months. DoLR has also attributed the rise to the ongoing political transition, a weak security situation in the Terai, and strong inflow of cash from the informal sector.
The report has confirmed the growth of the real estate bubble, a major concern of the central bank. Nepal Rastra Bank, and even a mission of the International Monetary Fund (IMF) which concluded its visit recently, has warned that the Nepali banking sector could be seriously hurt should the bubble burst.
Land prices in the Valley
Present market land prices in Kathmandu city suggest that New Road, Indrachowk, Otu, Jamal, Kingsway, and areas in their vicinity, are the most expensive places to buy.
The Tripureshwor and Teku area, as well as land along the main road in New Banseshwor, are other expensive areas due to their commercial significance. Land along the main road in New Baneshwor was traded at Rs 9.6 million per anna in the last fiscal year.
In the inner Baneshwor area, however, prices range between 1.2 million to 4.5 million. Land in Dillibazar, Kamal Pokhari, and Lazimpat area is priced at around Rs 4.5 million, despite the fact government valuation per anna in those areas stands at over Rs 800,000.
“The prices have soared so much, one would need to spend at least a million to get a sizeable residential land piece, even in village development committee areas of Kathmandu district,” said Raju Niraula, a real estate dealer.
In Lalitpur also, owners’ land quotes start from Rs 4.5 million per anna for properties located along the main road that traverses through Kupondole to Kumaripati. “In the government’s valuation, however, land is priced at a mere Rs 756,250 per anna in those areas,” said Chhatra Man Singh Thapa, accountant at Lalitpur LRO.
In Patan Dhoka, the official valuation stands at Rs 437,500 per anna, but is traded on the market at about 4 million.
Official valuation for land in track roads in Lalitpur is Rs 281,250 per anna. Along the Ring Road area, it is valued at 156,250, but transaction is being done at a minimum of 800,000 per anna.
Bhaktapur land cheaper
According to dealers operating in the district, the most expensive land in Bhaktapur is located in Lokanthali, Gatthaghar and Kausaltar, and the Surya Binayak portion of the Araniko highway.
“Transactions are done at Rs 1.2 million per anna in some parts of those areas,” said Govinda Sapkota, chief of the Bhaktapur LRO.
Under government valuation, however, those are priced at just half a million per anna. “Even this valuation was raised to this level this year,” said Sapkota, who informed Republica said that the revision had raised valuation more than two-fold.
Interestingly, the price of land in Bhaktapur Sub-Metropolitan area, the old residential site, is cheaper than that located along the highway. “This is because outsiders barely place demand to buy land for settlement in the city, which has a closed cultural and social system,” said land dealers.
milan@myrepublica.com
