Real Estate Transactions Hit by Gen Z Protests and Festive Holidays

Nepal’s real estate transactions declined over the past three months, affected by the Gen Z movement and the long festive holidays, in addition to the ongoing ban on land plot sub-division in most local levels since the beginning of the current fiscal year.

According to the Department of Land Management and Archive, the number of transactions has fallen significantly. While 104,218 transactions were recorded in the month of Shrawn (mid-July to mid-August), the figure dropped to 102,071 in the month of Bhadra (mid-August to mid-September). During the Gen Z protests on September 8 and 9, several land revenue offices were vandalized and set on fire.

The extended Dashain holidays in October further slowed down transactions, with the total falling to just 79,736 for the month of Asoj (mid-September to mid-October).

With fewer land transactions, government revenue has also declined. The Department reported revenue collection of Rs 3.28 billion in mid-July to mid-August and Rs 3.14 billion in mid-August to mid-September, which further dropped to Rs 2.75 billion in mid-September to mid-October.

Bishnu Ghimire, president of the Real Estate Entrepreneurs’ Federation, said business activities were disrupted after several land revenue offices were damaged during the Gen Z movement. However, he cited the continued halt in land sub-division as the main reason for the prolonged slowdown in the real estate sector.

“Since mid-July, land plot sub-division has been suspended in more than 500 local levels, leaving transactions almost stagnant,” Ghimire said. He added that the impact has been visible since the start of the current fiscal year.

The government had imposed the ban on land plot sub-division in local levels that failed to complete land classification as required by the Land Use Regulation. The regulation mandates classification of all land across the country into ten categories — agricultural, residential, commercial, industrial, mining and mineral, forest, river-lake-wetland, public use, cultural and archaeological importance, and other areas designated by the government.

Although the previous deadline for land classification expired at the end of the last fiscal year, nearly 500 local levels had yet to complete the process. After assuming office last month, Minister for Land Management, Cooperatives and Poverty Alleviation Anil Kumar Sinha announced that the government would amend the regulation to extend the deadline by one more year.
Undersecretary Damodar Wagle earlier told New Business Age that the ministry was preparing to amend the regulation to grant this extension.

Ghimire added that the Gen Z protests, which occurred during the land sub-division ban period, dealt an additional blow to an already weak market. “Mid-September to mid-November are usually the peak months for land and housing transactions, but this year the business has been hit hard,” he said.