Kathmandu, July 19: It is the best time to purchase property, according to developers as according to them budget has injected new lease of life to the barely thriving realty market.
“For the time being, price of property will not rise much as the developers will sell the units at discounted rate to ease the cash flow but gradually as the sales will rise they will go on adjusting rising cost of construction,” said co-ordinator of Urban Development Forum of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Om Rajbhandary, who is also the CEO of Comfort Housing.
“The apartment prices will start rising once the market picks up,” he added.
Once booming real estate and housing industry has gone into near-recession state during the last oneand-a-half year after the central bank capped the credit floated to the sector fearing the creation of asset bubble in December 2009.
The situation got worse when the liquidity situation in the financial sector started to get squeezed tightening the credit flow to housing and real estate.
“Since the budget has revised policy measures and there is hope of liquidity easing in the financial sector that were the factors causing dip in the realty market, the sector is confident that it will pick up soon,“ explained Rajbhandary.
He is also vice president of Nepal Land and Housing Developers Association.
The budget has done away with income source declaration for the purchase of real estate worth less than Rs 10 million and slashed fifty per cent in Capital Gain Tax. “It will increase the land and house transactions bringing in more transparency so that government will generate more revenue,” he said, adding that the complementary policy easing by the central bank regarding rescheduling the realty loans with the payment of accumulated interest alone has provided much needed respite.
The government has introduced negative declaration of income source while depositing more than Rs 1 million in the financial institutions which will ease liquidity in the banking channels making credit facility easier. “The new category of home loans and easier cred
Even if mere five units of apartments costing $200,000 could be sold, the country will see $ 1 million inflow and the lock-in period of five year and separating quotas for foreigners will prevent distortions in the market,” he said.
Similarly, the budget has also announced to introduce real estate transaction through registered PAN account holding brokers to make the transactions wellmanaged.
Rajbhandary had been campaigning to introduce professional and trained manpower in brokerage business. “It will create new profession and since the transactions will be done through registered channels only, nation will not be duped from revenues and the consumers will also be saved from being conned,” he said.
Source:thehimalayantimes