How to determine a house price in Nepal?

How to determine a house price in Nepal?

Want to sell your own house or are planning to buy one? Then, surely a question — how to determine a house price in Nepal or say its valuation has arisen for you. To come up with the exact worth of a house is not a realistic expectation, so all we can do is try to arrive at a roundabout figure. 

With this understanding in place, let’s dig deeper into how to determine a house price in Nepal?

[Note: For this blog, we assume that there is a house you want to buy or sell and are looking for a way to figure out its price. This would help you relate better.

Also, as we build a house upon the land, while calculating the overall house price, we must also consider the price of the land. In the blog's context, we ain’t considering the difference in meaning between house price and land price, and would combine both into a single phrase: house price.]

First, compare with a recently sold property in your locality similar to the one you are planning to buy/sell

Houses are being bought and sold everywhere. At the locality too, someone must have transacted houses similar to which you are interested in buying/selling. So, to determine a house price, firstly compare the house of your interest with the house recently sold in the locality. The differences may be in the number of bedrooms, storeys, overall size or other factors mentioned down in this blog; based on that do the addition or subtraction from the selling price of the other house. This way you can almost accurately determine the house price in Nepal.

Other Factors affecting the house price in Nepal

• The location of the house
• The age of the house
• The size of the house
• The quality of the construction of the house
• Supply and demand of houses in the locality

1. How does a location affect house prices in Nepal?

Availability of basic life facilities

In Nepal, we can divide the whole geographical topography into urban and rural areas. 

The urban areas (i.e., cities) including Kathmandu have access to basic life facilities, like roadways, water, electricity, fire department, fiber to home internet, health services, educational institutions, places for entertainment, and so on. 

As access to these basic life facilities makes the inhabitant’s life easier, house prices in urban areas of Nepal are very high. An easier example is to look at the prices of homes for sale in Kathmandu through our real estate portal, Gharsansarnepal.

Also, if the house location is near from black topped roads, hospitals and universities, it raises the house value and if it's far the house price declines. 

In the rural areas (i.e., villages), access to these basic life facilities is scarce or nonexistent. So the house prices here are comparatively very low.

Business value in the Area

Because of reasons like population density, the local businesses similar to marts thrive in some areas more than others. And where the business flourishes, newer investors arrive to cash in the opportunity. So if the house is in such areas, due to higher demand, its price surely soars high.

Community and neighborhood of the area

We as social beings need to interact with our community and neighbourhood. Either it can be to conduct our everyday life or to discuss ways to improve the area. A peaceful community surely helps one to live a quiet life with no external disturbances.

So, if the people in the locality are great as per your evaluation, it would help raise the valuation of the house; as everyone wants to live in a pleasant environment.

Weather

The weather of a place, somehow indirectly influences house prices. If it is pleasant with sufficient rainfall and moderate temperature, it surely raises the house prices higher. On the contrary, if it's unpleasant with excessive heat or cold, very few or outrageous rainfalls, it puts the value of the house down.

2. How does the age of the house affect house prices in Nepal?

Forces of nature like rain, snow, sunlight, and storms are always in play. The outer structure of the house also deteriorates every day with exposure to these forces. Because of this, we find older houses, more damaged, compared to houses which are newly built. Also, with regular use, the internal structure too loses the freshness and elegance.

So, newer the house, more its value and older the house, less the value. We even consider houses which are older than 15 years to have little to no value at all. 

3. How does the size of the house affect house prices in Nepal?

It's obvious that bigger houses are expensive to build compared to smaller houses. So the valuation of the house is directly proportional to the size of house — bigger the house, higher the price and smaller the house, lower the price.

4. How does the quality of construction affect house price in Nepal?

The quality of construction of the house mainly depends upon if the house owner followed the latest engineering standards while building it and the grade of raw materials like brick and cement used in the house. 

The houses built on the latest engineering norms and with good quality raw materials get little to no damage even on strong earthquakes. So considering the safety, we value those sorts of houses, higher. 

Amenities and aesthetics in the house

The amenities can include gardens, swimming pools or other exclusive features of the house. These features add pleasantness or luxury for the people that live there.

Aesthetics here mean how beautiful the house is. Find out what additional features are in the house to increase its beauty. 

The houses which have more amenities and are aesthetically pleasing are always valued higher compared to one without it.

5. How does the supply and demand of houses in the locality affect house prices in Nepal?

If there is an enormous demand for houses in the area, it is surely a great positive influence for the house price. When more people want to buy the same house, one buyer tries to gain the advantage over others by raising the bid higher; and the process continues. 

But, when there are fewer buyers in the area and everyone in the area wants to sell the houses, the selling price must go lower to praise the scarce number of buyers. 

Final analysis

In the blog, we first looked into how we can come up with a roundabout valuation for a house by comparing the house you are interested in with a similar house which is recently sold in the same locality. We also mentioned how factors like availability of basic life facilities, business value of locality, weather there, neighbourhood, age of the house, size of the house, amenities and aesthetics there, quality of construction and supply and demand of houses in the locality all influence the house price. Evaluate these insights to determine a house price in Nepal.