February 23: Stakeholders have been demanding the government to make the real estate business ell organized since a long time. However, due to the inability to manage the real estate sector, the state itself has suffered as well as the service seekers.

 Unnecessary price hike by middlemen have left the middle-class consumers unable to buy land and houses. "Two years ago, the land in Kirtipur used to cost Rs 1.2 million to Rs 1.5 million per aana (1 aana = 242 sq feet), but now it has reached Rs 2.2 million to Rs 2.5 million per aana," said a local.

According to government figures, around Rs 50 billion is generated from the real estate business every year at this time. In a country with 50,000-60,000 real estate transactions every month, government officials say the revenue generated is not as much as expected due to the lack of a regulatory body.

Pitamber Ghimire, director-general of the Department of Land Management and Records, the only body responsible for managing the real estate sector, admits that the task and duties assigned to them at present cannot end the problems of the real estate sector.

Named as the Department of Land Management some time ago, this department has now been developed as a record-keeping department.

The department has been working to maintain the minimum valuation of land across the country by managing the data of 126 Land Revenue Offices. 

Ghimire said that the government has realized the problems in the real estate sector and is aware that a separate body is needed to regulate it. 

However, he suggested that the Land Revenue Act should be amended first to establish a regulatory body and this could be done through amendment.

A study conducted by the Confederation of Banks and Financial Institutions Nepal (CIBFIN) found that bank loans have mostly entered the real estate.

As a result, real estate prices have doubled in just two years. After the price hike, ordinary working people could not afford to buy land due to which the real estate businesses have also slumped.

Due to the slump in real estate business, a large amount of money invested in the real estate has not been able to return to the banking channel. Experts say that one of the main reasons for the deteriorating state of Nepal's economy at this time is the real estate. Neighboring India also went through a similar situation. But the real estate companies in India say real estate prices in India have not risen by more than 10 percent in two years.

This is because the Indian media has mentioned that the Real Estate Regulatory Authority of India (RERA) has played a big role in keeping the price of real estate stable. In Nepal, real estate prices have been rising sharply since 2062/63.