The housing sector that had remained at a low last year following Nepal Rastra Bank (NRB)’s squeeze on commercial bank’s realty sector lending, seems to be bouncing back. Of late, leading housing developers have started rolling out new projects—apartments, housing and commercial complexes—and bookings of these projects are getting impressive. Within seven days of launching, Oriental Developer’s apartment in Dhumbarahi is booked 40 percent. A total of eight projects in Kathmandu valley have been cleared by the government in the first four months of the current fiscal year. In the last one month, two new apartment projects were launched in the Capital. Also launched was Ranjana Trade Centre—a commercial complex—in New Road. Two more commercial complexes— JSB Financial Tower and CM Central Market—are to be launched in the near future. Developed by Krishi Premura Properties, the 17-storey JSB Tower would be the tallest commercial building in the Capital. Aayusha Developers is planning to build CM Central Market in Naxal. The Kathmandu Valley Town Development Implementation Committee has given permission to six developers to build apartments in Kathmandu this fiscal year. The six having got permission are Super Builders, Oriental Builders, Chaya Devi Casent, Platinum Developers, Civil Estate and Shangrila Housing. Of these, Super Builders, Oriental Builders and Chaya Devi Casent have got permission to build apartments while the permits given to Platinum Developers, Civil Estate and Shangrila Housing, have been amended. The Bhaktapur Valley Town Development Committee also has given permission to two companies to develop apartment and housing projects in Bhaktapur. According to the BVTDC, Neupane Tower, a 45-unit apartment is being developed at Madhyapur Thimi. The Rose Village housing project that will have 60 individual homes is being developed at Balkot by Bagmati Properties. The central bank’s new directive in the third week of September had given a much needed boost to the domestic housing sector. The NRB, through the new directive, had relaxed banks and financial institutions’ (BFIs’) lending to the housing sector. As per the new directive, BFIs will have to bring down their exposure to the housing sector to 25 percent within the next two years. The last fiscal year saw fewer housing and apartment projects being launched following a series of government steps. The liquidity crunch followed by the central bank’s directives to banks and financial institutions to cap real estate and housing loans had made developers wary. There were 36 housing and apartment projects announced in the Kathmandu Valley in fiscal year 2008-09 while there were 23 in fiscal year 2009-10. Developers say the sector is slowly gaining momentum following NRB’s easing the lending to housing sector. “The introduction of new directives is praiseworthy. Due to easy access to loans, the sector is seeing progress,” said Prakash Bajracharya, director of Shangrila Housing. Bhesh Raj Lohani, secretary of the Nepal Land and Housing Developers’ Association and managing director of Rose Village, said the market is seeing growth after the introduction of new directives from the central bank. “Currently, the sector is in a progressive state,” added Lohani. However, developers say the market could have performed better had there not been higher interest rates of BFIs. According to them, the higher interest rate of BFIs is still making holding back buyers. “The interest rate on home loan stands at 14 percent on an average. So, people are hesitant to buy houses and apartments,” said Lohani. Developers say the interest rate on home loans plays an important role when it comes to consumers buying apartments. According to developers, there could be much more momentum in the sector if the interest rate drops to 10-11 percent. “The sector has a potential for growth if the interest rate drops to 10 to 11 percent,” said Lohani. In the last five years, 83 apartments and 33 housing projects have been constructed in Kathmandu Valley. And, the majority of these has been constructed in Kathmandu district, followed by Lalitpur. source: The Kathmandu Post: Money