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Low-end housing in high demand

Low end housing products are in high demand in the Valley, according to a study on housing market released here today.Stand alone housing or apartments priced between Rs 5 million and Rs 10 million are in high demand in the Valley, said the study ‘Real Estate Market Outlook 2013’ conducted by Brihat Investment in the Kathmandu Valley.There is a higher demand for low end, ready to move in and instant ownership transferable units, said coordinator of Urban Development Forum under the Federation of Nepalese Chamber of Commerce and Industry (FNCCI) Om Raj Bhandari, presenting the report that has revealed that most of the customers are seeking cheaper housing products.Though customers are also interested in apartments, the demand is still high for independent housing units, he said, adding that some 76 per cent of housing projects have already been sold, while only 51 per cent of apartment projects have been sold as of this July. “There are a total of 1,975 housing units and 4,307 apartment units in the valley.”Of them , some 82 per cent of housing and 72 per cent of apartment projects were sold had price range of Rs 5-10 million, the report revealed, adding that of the 858 housing units with a price tag between Rs 5 million to Rs 10 million, some 702 were sold. “Likewise, 829 out of the 1,147 apartment units in the price category of Rs 5 million to Rs 10 million were also sold.”The average price for housing units stands at Rs 12.3 million, whereas the price of an apartment unit is Rs 9.2 million, it added.But the sale is not discouraging, Raj Bhandari said, adding that some 59 per cent of the housing and apartment units have been sold.
The survey has covered 22 housing projects – out of 50 – and 22 apartment projects – out of 66 – in the Kathmandu Valley, which is 44 per cent of housing projects and 33 per cent of apartment projects.The real estate sector that has over Rs 100 billion investment as according to the report the total amount of the surveyed projects alone have an investment of around Rs 64.4 billion, including Rs 24.25 billion in housing projects and Rs 39.75 billion in apartment projects that is 37 per cent and 63 per cent, respectively.
“Some 467 units of homes and 2,107 units of apartment are on sale at present,” according to the report. “Considering the current trend at which housing and apartment units are being sold, it might take between 14 and 41 months to clear off the inventory.”
The report also revealed that the apartments in Lalitpur are facing difficulty in sales. “Likewise, fiscal year 2007-08 saw the highest number of housing and apartment projects registration and launching but they have been declining in the later fiscal years.”The report has listed preference for owner built houses, lack of buyer confidence, change in customer preference and lack of flexible financial plans as some of the major challenges.
Speaking on the occasion, president of Nepal Land and Housing Developers Association (NLHDA) Ichchha Raj Tamang urged the government and the banks and financial institutions to liberalise lending policy for the realty sector as it has tremendous growth potential.