Real Estate Market Bounces Back: Transaction Value Nearly Doubles in a Year

After enduring a prolonged slump, Nepal’s real estate market has made a strong recovery in the fiscal year 2082/83. According to a recent report by the Nepal Rastra Bank (NRB), while the total number of property transactions across the country grew by a modest 4.74 percent, the overall transaction value nearly doubled. The total turnover soared to Rs 720.86 billion, a massive leap from the Rs 386.15 billion recorded in the previous fiscal year.

The market witnessed a particularly sharp spike during the fourth quarter (the final three months) of the fiscal year, with transactions amounting to a staggering Rs 275 billion. During this period, land deed transfers (Rajinama) surged by nearly 23 percent, and the total area of land transacted expanded by over 15 percent. Data shows that small to medium-sized plots, specifically those ranging from 2.5 to 10 aana, were the most sought-after properties among buyers.

This real estate boom has brought a significant windfall to the state treasury and the banking sector. Government revenue collected from property transactions jumped by more than 48 percent, while capital gains tax collections surged by over 63 percent. Consequently, as market demand swelled, bank credit flowing into the real estate and housing sector also expanded by nearly 7 percent.

While the recovery was observed nationwide, Bagmati Province—driven largely by the Kathmandu Valley—emerged as the undisputed leader. The transaction value in Bagmati skyrocketed by 175 percent. Kathmandu Metropolitan City alone witnessed a 155 percent jump in transaction numbers and a staggering 217 percent rise in total transaction value. In contrast, Madhesh Province experienced a much slower recovery, highlighting regional disparities in the property market.

Despite the encouraging numbers, economic analysts question the long-term sustainability of this boom. Since real estate is largely considered an unproductive sector, a surge in land trading does not automatically translate to broader economic strength or job creation. Therefore, regulatory bodies like the NRB will need to closely monitor the quality of bank credit and the broader economic impacts to prevent future financial risks.