The records of the land revenue offices in the Valley show that compared to the past few months, the number of land transactions have plummeted to as low as half the earlier numbers. And land developers say the slowdown has started to make them wary.
In a bid to aggressively dispose of the plots they developed at the prevailing rates, some developers have even resorted to unveiling interesting promotional schemes.
For instance, on May 16, Bhim Lama, a developer in Tikathali took out an advertisement that said that he would give a 200 CC Pulsar to the first buyer of his land and also lower-CC bikes to other buyers. "The slowdown has deepened for the last one month. Thus it was wise to aggressively push the sales now, rather than later," Lama told myrepublica.com.
Interestingly, he was not the first one to come up with such a scheme. "I went for the scheme after I saw a couple of such advertisements for plots in the newspapers," he added.
Officials at Department of Land Reforms and Management stated that the transactions slowed down mainly in the wake of the banks´ stopping loans in the sector, the decline in the growth of remittances and because buyers speculated that the realty market had overheated and that prices could crash soon.
"People have preferred to put a hold on their purchase plans. For example, the number of transactions at the Chabahil Land Revenue Office (LRO), which used to cross the 400 mark every day, has dropped to half," said Amrit Kumar Karmacharya, chief of the office.
A similar trend is at play in Kalanki, Bhaktapur and Lalitpur.
The slowdown has also caused the revenue collections of the LROs to drop in the recently concluded tenth month of the fiscal year, compared to the ninth and previous months of the fiscal year.
According to Karmacharya, revenue collections at Chabahil dropped to 40 percent of the earlier volumes, over the past one month. The collections of other offices too have plummeted, within a range of 15-25 percent, according to the statistics of the Department of Land Reform and Management.
"The slowdown has not dragged down prices so far, but it could," said Jit Bahadur Shrestha of Bhimeshwor Property. "Hence, developers have lately stopped plotting their land," he added.
The transactions of and the prices of land had soared sharply over the last few years in the Valley, during which, the banks and financial institutions provided generous financing, the remittance inflow sharply increased, and as more people were forced to migrate from the conflict-hit Tarai region. Prices had more than doubled over the last nine months alone.
milan@myrepublica.com
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