There was a time when there was a huge market in the real estate business in Nepal. Before the covid-19 pandemic, it was the sector with the highest earnings. Many people totally changed their social status by engaging in this field. That was the time when everyone wants to become a real estate agent because of the higher earning they made.
In recent years, the real estate industry has been booming in Nepal. However, it is expected that in 2023, there will be a decrease in investment in the real estate business. It is because of different reasons. Here, we will discuss the possible reasons for this decline.
Economic Slowdown
One of the main reasons for the decrease in investment in the real estate business in Nepal could be an economic slowdown. The global rescission has brought some economic crisis. The economy of Nepal is largely dependent on remittances, tourism, and agriculture. The COVID-19 pandemic has affected all these sectors. As a result, people’s disposable income has decreased, and they are less likely to invest in the real estate business.
Government Policies
Government policies and regulations also play a crucial role in the growth of the real estate industry. In Nepal, the government has recently introduced new policies and regulations regarding the real estate industry. These policies have made it difficult for people to invest in the industry. For instance, the government has increased the taxes on the sale and purchase of properties. It also introduced some new land regulations regarding agricultural and residential property. This has discouraged people from investing in the industry.
Overpriced Properties
In recent years, the prices of properties in Nepal have increased heavily. This has made it difficult for people to invest in the industry. The prices of properties have reached a point where they are not affordable for the majority of people. This has led to a decrease in demand for properties and a decrease in investment in the industry.
Lack of Infrastructure
Infrastructure plays a crucial role in the growth of the real estate industry. In Nepal, the infrastructure is still lacking in many areas. This has made it difficult for people to invest in the industry. For instance, the lack of good roads and transportation have made it difficult for people to access properties in remote areas. This has led to a decrease in demand for properties in such areas and a decrease in investment in the industry.
To sum up, there are several reasons for the expected decrease in investment in the real estate industry in Nepal in 2023. Economic slowdown, government policies, overpriced properties, and lack of infrastructure are some of the key factors contributing to this decline. However, it is important to note that the real estate industry has the potential to bounce back. The government can introduce policies that encourage investment in the industry, and developers can build affordable properties that are accessible to the majority of people.
