Department of Land Reforms and Management (DoLRM), which earlier announced that the government´s recent steps spiraled down land and housing transactions in the Valley, has said transactions outside the valley too have dropped by an average of 15 percent compared to the figures of a month ago. [break]
“Our net land revenue collection from 41 districts declined to Rs 565 million in the sixth month of 2009/10, whereas a month ago it was well over Rs 652.10 million,” Raju Basnet, officer at DoLRM, told myrepublica.com.
District-wise ownership transfer data of DoLRM further shows that transactions have plummeted much above the district average in the cities and urban centers where the market had rapidly overheated.
For instance, transactions in Makawanpur, which was expanding most rapidly till mid-December 2009, slipped by almost 40 percent to half in the sixth month (mid-December to mid-January) of the fiscal year. As a result, the LRO there recorded a net drop in revenue collection of Rs 10 million during the month. Pokhara, the second expensive settlement after Kathmandu, and Chitwan too witnessed downfall in transactions by a quarter during the month. Data shows the government´s land revenue collection in Pokhara dropped by almost 28 percent to Rs 44.6 million in the sixth month.
Rupandehi and Dang too witnessed 12 and 8 percent drop in transactions respectively. Transaction in Morang in the eastern region also declined by some 2 percent, while far-western towns like Kanchanpur and Dadeldhura, where prices had soared at unprecedented rate due to geographical reasons, too witnessed a sharp downfall in demand during the month.
With land prices skyrocketing in the Valley, the first choice for settlement of all Nepali citizens, people had gradually started to shift their priority in the cities outside. Unrest in Tarai and migration by choice from hills too had caused land transactions jump two-fold in places like Pokhara, Chitwan, Hetauda and Jhapa till a couple of months ago. Transactions in Rupandehi (Bhairahawa and Butwal) as well as Morang (Biratnagar) had almost tripled over the third and the fourth month of this fiscal year.
As a result of this new trend, few land developers and a large numbers of individual brokers had shifted their base from Kathmandu to these cities.
“Unfortunate for them, the government´s step to correct the market has caused transactions to plummet heavily in those areas,” said Basnet.
He noted that the drop in transactions has not impacted prices as of yet. However, given the distress it has created among land developers and individuals who held larger stretch of land for reselling, officials caution that the situation could turn different in the next couple of months.
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