Brihat Property Solutions by Mr. Om Rajbhandary, Executive Chairman initiated this housing survey project and coordinated with Dr.Sopon Pornchokchai, Director, Thai Real Estate Business School and President, Agency for Real Estate Affairs to conduct this comprehensive survey on low-rise housing and condominium projects in Kathmandu in order to understand housing markets as of June 2018.
The map of the zones and projects in 2018 showed as follows:
In this survey, we found the total number of units in active projects was 3,875. The number of units sold was 2,961; whereas, some 914 units or 24% were still left for sale. It could be said that the housing markets of Kathmandu were still very small. The 914 units available were very tiny compared to Bangkok where there were some 189,574 units still available for sale (http://bit.ly/2l7CFNX). This 914 units could be in only big project in Bangkok alone.
The total value of the development was 55,746 million rupee. The value already sold was 42,479 million rupee. The average price of a unit sold was 14.279 million rupee. The average housing price of a unit was 14.386 million rupee or USD 130,783; whereas, the average housing prices in Bangkok was around was around USD 124,484 (https://goo.gl/juN1Lv).
This was very amazing. The size of Nepali Economy was a lot smaller than that of Thailand. Meanwhile, the GDP per capita of Nepali people was also a lot smaller than that of Thailand as well. How can the offered prices were so similar. This implied that housing markets in Nepal catered to the upper income groups.
On the average, it was found that every month, some 117 units were sold or booked by the buyers. It could be estimated that each month, some 3.01% of the total units in a project were sold. This rate was a bit slow. This implied that to complete the sale of a project, it would take some 33 months which was still too long.
That each month 117 units were sold or booked, implied that the total 914 units left would be able to be absorbed within eight months. This was possible in the case that there were no new supplies. However, there had always been new supplies. This estimate of eight months implied that housing markets were rather growing at this moment.
In Kathmandu, we could simply identify houses into three categories, detached houses, townhouses (barrack-type) and owner-occupied apartments or condominiums. Or actually, it could be only low-rise residence (detached houses and townhouses) and condominiums.
Return of Investment or Capital Gain implies to Capital gain is a rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes (https://bit.ly/2tYSf5B)
In turn, Return on Investment (ROI) is a performance measure, used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI measures the amount of return on an investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio (https://bit.ly/2mzrXmY)
On the whole, the return of investment or capital gain for housing in Kathmandu in 2018 was 9.0%; whereas, the return on investment was only 3.6%. Totally, it became 12.6% which was still below the mortgage rate in Nepal and a bit higher than the super special one year deposit rate at 10.5% (https://bit.ly/2KJxUIB). This implied that it would not be attractive for those who bought the assets for rental purposes. The appreciation of prices was higher in the case of low-rise housing rather than those condominium units.
For those who would like to buy a full report on Housing Markets in Kathmandu, please contact Ms. Sabeeta Joshi, Brihat Property Solutions, Kathmandu, Nepal, Tel. +977-1-4033303 / 4033304 / 4033076. Web: www.brihatpropertysolutions.com Email: firstname.lastname@example.org; email@example.com