The 2015 Gorkha earthquake, which killed close to 10,000 people and damaged properties worth billions, had significantly hit the housing industry. It may not be an exaggeration to state that real estate properties, especially houses and apartments, stood among the worst hit sectors bringing a significant slack in business in the immediate aftermath.
The situation in Kathmandu, one of the worst hit districts and the country’s capital, which is also a base for a significant portion of businesses including housing had lost confidence of the general public.
However, the sector is reviving at a gradual pace, and realty developers feel the catastrophic disaster also became an opportunity to prove the caliber of properties developed by builders. “Most properties built by developers were marked safe. Hundreds of owner built homes had collapsed,” Bijay Rajbhandary, Chairman of CE Construction said informing that the sector has regained the faith of buyers.
Today, most property builders inform that the situation for individual housing has improved significantly but there is some apprehension still in buying high-rise residential apartments.
With stand-alone houses being preferred, there is boom in construction. Builders say, adequate open space, wide roads, same pattern of homes, modern day amenities like swimming pool, gymnasium, jogging track, hassle free provision of drinking water, waste management and well maintained security have made such properties a top choice for people.
According to the records of the Department of Urban Development and Building Construction (DUDBC), the authority has provided approval for the construction of 67 apartment projects. These projects are estimated to have 6,500 apartments units. Of the 67 projects, construction permit of 6-7 projects has been cancelled following several reasons.
Likewise, the Nepal Land and Housing Developers Association (NLHDA) estimates that there are around 150 small and big property developers.
According to Lila Khatiwada, Senior Divisional Engineer at DUDBC, two projects have received approval for construction of apartment projects post 2015 earthquake. No new apartment projects were launched after the recession that hit the realty sector in 2009-10. The two new projects – Premier Apartments in Maharajgung and another project in Putalisadak – indicate acceptance and confidence in apartment projects. The situation isn’t great but considered optimistic after a long lull.
“We had gambled with Premier Apartment project post-earthquake. However, almost all the units were sold within two weeks,” Rajbhandary said defining the current scenario.
Conducting Post-Disaster Needs Assessment of all inhabited high risers in the immediate aftermath of the earthquake, the government had declared two out of 40 apartment buildings in Kathmandu un-tenantable. 32 apartments had received the yellow sticker which meant there is need of repair before use.
Apart from the two un-tenantable projects, others eventually received clearance from the DUDBC after conducting safety assessments. “None of the high rise buildings in Kathmandu valley collapsed in the earthquake of such magnitude. And there was just one death recorded in such properties. While people were afraid to walk into the buildings seeing cosmetic damage in the immediate aftermath, the gradual understanding that such buildings have gone through safety assessment and are much stronger helped people regain trust in such projects,” a leading builder who wished to remain unnamed said.
The recent government directive prohibiting plotting of arable land without obtaining permission from related government office has further encouraged people from buying developer built homes.
While prospect for housing and apartment projects seem to be getting better post-earthquake. The cost factor is deterring,consumers.A decent family apartment in Kathmandu is estimated to cost around Rs 7-8 million while prices of stand-alone house starts at around Rs 10 million.
“Most projects in Kathmandu, specially apartments, have become expensive due to several features that isn’t necessary in the daily life of a general Nepali. It would have been great had developers focused on projects that would cater to the needs of people looking forward to move in to a basic residence,” Sushmita Ban of Maharajgung, who is keen to purchase an apartment said.
Experts too feel that such properties can be made cheaper by reducing construction of facilities that, in general, aren’t needed in daily life. Given that Kathmandu falls under the vulnerable zone, is earthquake prone, stand-alone housing projects aren’t a viable solution due to unavailability of adequate space, the development of walkup apartment (which is 4-6 storeys and do not have provision for lift) and apartments of up to 11 storeys in maximum is a must. Such properties can be the answer to the ever growing haphazard urbanisation while catering to the needs of people looking for economic housing solutions and for those seeking high-end projects with better facilities.
By Hemant Giri