Ever wondered when, how, and why the real estate business started in Nepal? Let’s peek into the history of Nepal's Real Estate Business.
During the reign of Prime Minister Junga Bahadur Rana, the provision for renting of the land was initiated legally which is also stated in the Muluki Ain issued in 1853/54 A.D. This was the building block for the real estate business in Nepal. This provision also allowed several other land-related affairs to be done officially in Nepal.
No matter how the Rana reign started in Nepal, it’s fair to say that a lot of great deeds were done during that period. Likewise, it was during the Rana reign when Nepal witnessed a significant improvement in the Land Tax sector. During the Rana dynasty, Land Tax was one of the main sources of income of our country. As the Land business started to grow, the process of keeping the track of land tax business also got officially recognized. As per the Department of Land Management and Archive, in 1873/74 the government of Nepal systematically started keeping the track of land starting from plains and hilly areas.
In 1896 the official land revenue office, also known as ‘Maal Adda’ was established. This was the indication that everyone who owns the land should now compulsorily have the land papers and should pay the tax accordingly. The government started to pay salaries to staff officially to collect the bills after the finance office, also known as Tahasil Karyalaya, was inaugurated. Later in the year 1902, the Land revenue office and Finance office merged together.
Chandra Shamser, one of the famous Rana Prime Ministers of Nepal, classified the land into four main categories known as awal, doyam, seem, and chahar. This was done to collect the taxes and do land-related business during that time. During his tenure from 1901 to 1929, land classification was undoubtedly one of the main achievements that laid the foundation for Nepal's Real Estate Business. Also during his tenure, in 1907, a land survey was also conducted after which the land tax was imposed according to the type of classified land.
In 1921, during the reign of Chandra Shamser, the Pota Registration Adda was established in Nepal. This can be taken as the establishment of a Real Estate Business in Nepal. This Adda carried out the process of transferring land from one person to another, officially in a written form. This marked the start of the Real Estate Business in Nepal.
For the first time, the introduction of the plot system or Kitta was introduced in 1923, during the Rana Dynasty. The Kitta system made it possible to buy and sell the land on the basis of maps, which is also how Real Estate Business is carried out in modern times.
For the first time in Nepal, the law to govern the Land sector was established in the 1950s. Later in 1957, a Land Reform Law, to provide protection and give certain rights to tenants was formally promulgated.
The sole role of the Land Administrative Office was to govern and look after the land and also the map prepared as per the Land Survey and Measurement Act, 1962. The Land Administrative Office was officially established in 9 districts including Kathmandu Valley. Later in 1963, the Land Administrative Office was officially renamed to the Land Reform Office.
As per the Land Revenue Act, issued in 1978, Land Revenue Office became the independent governing entity that looked after the buying and selling of land all over Nepal.
It was only in 1990, the government of Nepal officially recognized the real estate business commercially. With this, a lot of private companies and real estate businesses started to grow rapidly from Kathmandu valley to every city of Nepal. Now, in 2021, Real Estate is one of the biggest and profitable business sectors in Nepal. Thanks to Covid-19, the business remains quiet for almost a year, now with the ease of lockdown, the Real Estate business is catching up the pace.
The Real Estate Business was pretty much dead during the first phase of Covid-19. Not only Real Estate, but the whole country was pretty much shut for months. But after the ease of lockdown, the Real Estate Business is running and alive after a long time. The good sign is that the real estate business is blooming creating a job opportunity for lots of people. Just in one month (from December 2020 to January 2021) a total of 76,532 houses and plots of land were sold or bought all over the country. The government of Nepal collected a total of Rs 6.65 billion in revenue just from the Real Estate Business, in one month.
Despite the pandemic, the real estate business is growing rapidly on a daily basis. If we take the records, a total of 56,838 plots of lands and houses were bought and sold in three months period (from mid-August to mid-October) whereas more than 50,000 plots of land were bought and sold, just in one month period (mid-October to mid-November). Clearly, we can see the effect of Covid-19 in the business. And we can also see the boost of business when the Lockdown was eased. The only thing stopping the real estate business from growing and blooming is another lockdown, to be honest.
Similarly, at least 61,451 houses and plots were bought and sold during mid-November and mid-December. If we compare the stats we can clearly see that real estate is just growing month by month. This is also great news in terms of revenue perspective for the country.
One of the main reasons why real estate is thriving immediately after lockdown is because many people don’t have anywhere to invest, especially when industries and tourism are vastly affected in recent times. So, people are highly encouraged to invest in real estate. As the population inside Kathmandu Valley and major cities across the country are increasing, the demand for land and houses is also increasing. Kathmandu, for obvious reasons, is the major city housing millions of citizens from all over the country. One of the main sources of income of the people of Kathmandu comes from renting houses. There are rarely any open places and land areas in major cities which makes people move towards suburbs searching for real estate.
Investors are lured to places that are few kilometers from the Kathmandu cities. Some of the places highly involved in the real estate business are Khokana, Godavari, Mulpani, Suryavinayak, Thoka, etc.
If you are willing to invest in real estate in Nepal. Here are a few things about Nepal real estate you should know beforehand.
In order to succeed, you have to start first. Many people fail just because they fear failing. If you really want to succeed in real estate first you have to be willing to invest. Be smart and visit lots of sites before you choose any plot to buy.
If you want to make a business out of real estate, then at some point you would have to take loans. For real estate taking loans is always the wise decision because let’s be real the price of land never goes down. In just a few years the price might be double what you bought at. You can even get special house loans as well from respective banks or government.
Properties have become really expensive. You would have to invest millions of rupees in a small plot of land. Now, looking at these circumstances it is fair to say that partnering with someone is probably the best decision, as you would get an extra sum of money for investment from your partner. You might not have the 100 % budget to invest, in such a case working in partnership is a wise decision.
If you are into the real estate business, then you might know that it is not cheap at all. So, when you are a beginner, what we suggest you do is, look for the most affordable one among the lot. In this business, the most important thing is to negotiate. In the end, it all depends on how much of a negotiator you are.
If you are trying to buy a house, you can choose the most affordable one, renovate it afterward, and sell it for a good sum of money. This is what the real estate business is all about, buy, renovate, sell, make a profit. The same goes with the plot of land. You can buy land for a cheaper price, divide it into plots, build walls, and sell each plot for a great sum of money.
Another important tip you need is where you buy a house or land. Many investors buy properties in remote areas, few kilometers from the main roads, then after some years when the area starts to get populated, you can sell the same piece of land for double the amount of money that you bought at. Investors should be very active and far-sighted to know which remote areas are likely to get road facilities in the near future and invest accordingly. If you invest in remote areas which are rarely going to be connected with roads, then the investment won’t be that fruitful.
If you are looking for the best real estate dealer in Kathmandu then Gharsansar.com is the best platform for you to buy and sell your properties.