On November 19, Nepal Rastra Bank (NRB) released a report proposing real estate index. This is about the study of the value and fluctuations in real estate prices in Nepal. The report was completed after nearly two years of hard work. However, the report will now be published every three months.
The Governor of Nepal Rastra Bank, Maha Prasad Adhikari unveiled the report at a special function in Kathmandu. The main objective of the report was to measure the fluctuations in real estate prices. The report was done through conducting real estate price survey based on real estate indexes. In fact, for Nepal, this kind of survey is first of its kind.
Inside the Report
NRB had conducted a nationwide survey to prepare the report. According to the report, the average annual real estate inflation was 26.45 percent in the fiscal year 2076/77. Evidently, it is based on the data obtained from commercial banks. Likewise, according to the Land Revenue Office, the inflation rate was 19.73 percent. Similarly, in the first nine months of FY 2077/78, such inflation was found to be 16.31 percent and 12.57 percent respectively. The survey also found that inflation was slightly lower in the first nine months of the fiscal year 2077/78 as compared to the previous fiscal year.
In the Financial Sector Development Strategy (2073/74-2077/78), the responsibility of preparing the report was on Nepal Rastra Bank. In fact, for the survey, the data was collected from 20 locations in 20 districts analyzing all the real estate indexes. It was prepared considering the geographical location of each province, concentration of transactions and availability of data. In some places, the municipality where real estate transactions are more were selected for the study.
Also, the sample real estate index datas were collected from six banks of Nepal. The samples were based on the number of loan transactions and branch network. The banks were NIC Asia, Global IME, Everest, Rastriya Banijya, Prabhu Bank and NRB.
According to the report, the highest increase in real estate prices is in Karnali succeeding the federal capital, Bagmati. The report shows that real estate prices rose by an average of 23.88 percent in Karnali. Similarly 5.95 percent in Bagmati Province in the first nine months of FY 2077/2078. After Karnali, real estate prices rose by 17.42 per cent in Province 2, 14.45 per cent in Lumbini. 14.20 per cent was recorded in Province 1, 11.83 per cent in Gandaki and 6.35 per cent in the Far West.
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