An the Jyapu neighbourhood of Bagdol, Patan, the community of Maharjans are overwhelmed to see their downscale neighbourhood turn into a posh residential area.
Six years ago, when Astaman Maharjan bought a huge tract of land to build a colony of bungalows, his friends warned him that he was taking a huge risk. His friends were right, Bagdol was a backwater & had bad roads. The estate venture was inconceivable.
But Astaman's gamble paid off. Bishnu Awas, a colony of 36 small bungalows, is thriving. People are moving in and this has set off a chain reaction of groceries, newspaper stalls, cyber cafes and restaurants. Astaman did not just strike it rich but he raised the profile of his entire neighbourhood and created opportunities for others.
"A housing colony is still a new concept but it is practical, affordable and bound to catch on," explains Astaman, who admits he was inspired by the apartment complex concept initiated by the Chaudhary Group.
Indeed, the trend is spreading in Kathmandu Valley for real estate developers to provide collective housing which individual home builders once had to struggle with. Leading housing companies such as Civil Homes, Sunrise Homes and Comfort Housing have already built several suburban residential areas. In 2001, Civil Homes took the first big leap by building 55 houses in Bhaisepati. The response was so overwhelming that all houses were booked even before they were finished. The company has added two more colonies in Kalanki and Sunakothi that will have more than 350 bungalows.
"Houses don't sell just because they are in a residential colony," says I R Tamang of Civil Homes, "People look for design and workmanship." Tamang's experience is that selling budget housing is more difficult than selling more expensive townhouses. (See Interview)
The economics of it is that real estate developers save money buying construction material in bulk and that is where the profit margins come from. Reputed housing companies are now under pressure from banks which have seen a spurt in home loans to develop more residential blocks.
Three years ago, when Everest Bank launched its Home Loan Scheme it started an avalanche of home-buying. Today, Standard Chartered, Kumari, Laxmi, Himalayan and Bank of Kathmandu all provide attractive home financing packages. The loans can be repaid in monthly installments lasting five to 18 years with 8.5 to 9.5 percent interests. The banks have invested an estimated Rs 4 billion in housing alone in the last three years.
"At a time when the prices of land and construction materials are escalating, people prefer not to build houses on their own. They believe they can save money and hassle by buying readymade bungalows," says Dilip Neupane, marketing manager of Sunrise Homes.
Located at Balkumari near Koteswor bridge, Sunrise Homes already has 57 elegant houses. "We are building 100 more bungalows and more than half of them have already been booked," says Neupane. Many families have moved out of congested inner city areas like Asan, Lajimpat, Indra Chok and Patan.
The colonies have their own water supply system, the roads are wider, there is ample parking space, security and phones are taken care of. Even if you have to pay slightly more for all this, most residents seem to think it is worth while. Some residents have even formed committees to raise funds for garbage collection and maintenance.
"There is a real sense of community, unlike in Asan where there were all these strangers," says Sharmila Shrestha who moved into Bagdol from Asan a year ago. Airline stewardess Bindya Thapa who moved in with her sister recently agrees: "The neighbours all know each other and give help and support when needed."
Property inside the colony has greater resale value. In Bagdol, several families have already sold off their property for Rs 4 million, more than double the original price. "The demand for houses is really growing. We are now running out of land," says 61-year-old Astaman Maharjan who has now begun developing another colony nearby targeting middle class families.
Future in apartments
As the Valley runs out of land, the future of housing in Kathmandu is in new self-contained high-rise apartment blocks. And already housing developers are setting their eyes on it. "The prospect is good because today's generation prefers community housing with security and facilities," says Bismaraj Chalise of the up-market Ace Apartments, which is nearing completion in Naxal.
About 56 apartments worth about Rs 3.5 million have been sold while real estate companies have been cropping up, building apartment complexes as the demand grows. "The business in apartments is gradually growing and will take off in the next few years," predicts Sandeep Bikram Rana of Ansal Chaudhary Developers, which pioneered the idea six years ago. Ansal's apartment complex in Bagdol with more than 140 units was sold off six months after opening. It has built another complex in Harisiddhi where nearly all 125 apartments are booked, mostly by Kathmandu's inner-city residents.