More talks on flat-to-foreigner -40,300 new units needed every year by 2020

The Finance Ministry and Nepal Land and Housing Developers Association today held discussion on the proposed-draft to let expatriates buy apartments in Nepal. “We discussed with the finance ministry officials today on the positive and negative aspects of the proposed policy that is expected to give a boost to the construction sector,” one of the participants said.

In a major policy shift, the government is loosening its policy on real estate and letting foreigners buy apartments — human-erected property — aiming at giving momentum to the construction sector, one of the growth sectors in the recent times. “Opening the sector for foreigners to buy apartments is one of the ways that can make the construction sector dynamic,” the association said.
As per existing laws, a foreigner is not allowed to buy land, house or apartments in Nepal as citizenship is a must to buy such immovable property.

Though the market last year witnessed a boom in the construction sector in the wake of increased demand for housing and apartments, this year it has witnessed a sluggish growth. The stagnation that proves that last year’s boom was more speculative than intrinsic demand has hurt the growth of the sector.
Though there is a rising domestic demand, according to the association, the low purchasing capacity and no option for financing has slowed down the sector’s growth this year.
According to 2001 data, the urban population of Nepal totalled 15 per cent and expected to reach 18 per cent by 2015 and 30 per cent by 2030.

According to the revised Housing Policy, based on the population rise, the Urban Housing shortage is expected to rise by 215,357 units every year between 2063 and 2077 (3,015,000 units total) and 1,000,000 units need repair and maintenance. “In Kathmandu valley alone, by 2020, demand of 40,300 units per year is expected,” the data
Similarly, around 87.6 per cent of the total population of Nepal has their own homes, according to the Nepal Rastra Bank’s Survey2008. “Of the total urban population, 88.5 per cent have their own homes while 10 per cent live in rented homes and 1.5 per cent live without paying rent,” it said, adding that in urban areas, 36.1 per cent live in nuclear units, 59.4 per cent live in joint units and 4.3 per cent live in commercial units.
“In urban areas, 60 per cent homes are concrete, 23.4 per cent homes are mix design and 16.6 per cent are kachhi,” the Survey added.

Residential area in ‘Greater Kathmandu’ has increased from 13.7 per cent in 1971 to 30.6 per cent in 1981 to 46 per cent in 1991-92.
Construction industry has recorded 5.7 per cent growth rate in 2008-09 which is notable as compared to other sub sectors.The Central Bureau of Statistics has also predicted construction sector’s increased contribution at 6.62 per cent to the GDP in the fiscal year 2009-10.

source: THT

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