Hurdles in owning homes in Nepal

A land piece split into different plots. RSS/File

In the scenic landscapes of Nepal, the dream of owning a home remains distant for many, especially those working regular jobs. The people here face economic challenges that make acquiring real estate a struggle.

This eventually led a significant number of youths to seek better opportunities abroad. It is time that the government should be ready to build an interconnected society for the country’s prosperity.

The economic struggle

Photo: Unsplash/Andre Taissin

For countless Nepali, especially those reliant on regular jobs, owning property seems like an unattainable dream. While a modest lifestyle is achievable, expanding one’s property portfolio is often constrained, creating a divide between those with familial advantages and others still striving to secure their residence.

The stories of Rajan and Sandesh, BBA graduates with equal marks, vividly illustrate this divide. Rajan, who studies in Nepal faces challenges in growing his property holdings, while Sandesh working in Australia, is expanding his real estate investments in Nepal and his adopted country. The impact of foreign exchange rates becomes evident as Sandesh benefits from favourable rates, enabling him to invest more substantially in properties.

A significant factor exacerbating this divide is the disparity in foreign exchange rates. Nepali individuals residing abroad, particularly in countries with higher exchange rates, enjoy financial advantages. This enables them to invest more substantially in properties, both within and outside Nepal resulting in a price hike on real estate in Nepal. In contrast, those residing in Nepal find themselves walking a tightrope, balancing income with inflation, often with limited resources for property acquisition.

This economic strain has unintended consequences, pushing individuals towards corruption and bribery, especially during family illnesses, significant family ceremonies or even for adding assets. However, proactive government support can mitigate these unethical practices.

The steps

To address these challenges and foster a more equitable economic landscape, the government should consider the following steps:

• Creating opportunities in Nepal: Generating more job opportunities within the country fosters economic growth and encourages youths to invest in their future at home. The government should support startups and assist individuals engaged in entrepreneurial ventures and traditional employment, promoting diverse career paths.
• Lowering real estate collateral costs: Initiatives should be undertaken to make real estate collateral more affordable, allowing a broader segment of the population to participate in property ownership. Additionally, the government should identify the commercial value of properties and establish monitoring mechanisms for property transactions to ensure fair practices.
• Supporting youth empowerment: Comprehensive support, including education incentives, vocational training programmes, and encouragement for startups, is crucial for retaining local talents and creating a conducive environment for professional growth within Nepal.
• Addressing interest rate issues: Implement measures to stabilise and make interest rates more predictable, providing families with better financial planning and reducing the need to sell ancestral properties or seek opportunities abroad.
• Anti-corruption measures: Government intervention to support families during health crises, for Higher and Technical Education or during important ceremonies can reduce incentives for corruption and bribery, fostering a more ethical economic environment.
• Incentives for local income: Policies should be devised to ensure that income earned within Nepal receives more significant benefits than the income of non-resident Nepali. This could include preferential treatment in tax incentives, business opportunities, or property ownership.

Empowering residents in Nepal with economic advantages and opportunities, coupled with addressing systemic issues like interest rate fluctuations, commercial property value identification, and corporate transparency, is vital for fostering a sustainable future.

The government’s commitment to these multifaceted challenges will not only bridge divides within the country but retain local talent and encourage a more ethical, prosperous, and interconnected society.

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