Nepali Times
Falling for flats


If necessity is the mother of invention, then the denizens of Kathmandu may finally be looking forward to an end to their housing woes. For too long, the Valley has coped with explosive urbanization, malignant, unplanned growth of improvised concrete structures that added floors to accommodate the influx. Zoning laws were flouted, building codes violated, safety sacrificed.

Now, housing estates and modern apartment complexes are at last making their way in. For now restricted to the upper middle class, the trend is already showing signs of trickling down to low-income housing as well. And Kathmandu is following the South Asian trend that makes an apartment a bigger status symbol than a bungalow. Already, surprisingly affordable apartment complexes are coming up promising a "European lifestyle".

Building a house can be one big headache, from getting the raw materials, hiring an engineer and contractors, getting the necessary permits (through underhand methods if necessary) fixing up water, electricity and phones. All this can be avoided by paying the little extra for an apartment. Hassle-free housing seems to be the new slogan. And since there is a demand, the supply has suddenly come up in the past five years.

Last year, when Ansal Choudhary Developers came up with the idea of Kathmandu Residency, some scoffed. A joint venture of the Choudhary Group of Nepal and Ansal BuildWell, Ansal Choudhary Developers was the first to launch an apartment based housing project in Nepal. With a total of 180 apartments with price ranging from Rs 900,000 for a one bedroom apartment to Rs 1.9 million for a three-bedroom one, the apartments were surprisingly affordable. People stopped scoffing and started taking the trend seriously.

Kathmandu Residency will be completed by October next year, and Ansal Choudhary has already started a new housing project named Mount View Residency at Harisidhi outside Patan. Spread over nearly two hectares of former paddy fields, Mount View Residency is a townhouse concept with Duplex and Individual Homes. Aimed at the middle to upper income brackets, the price of a duplex home is Rs 1.9-2.2 million, while an individual home is Rs 2.6 million.
Launched in mid-May, the apartment complex has attracted hordes of prospective home buyers. "We get up to 60 visitors a day coming to inspect the houses," says V Rajgopalan, technical head of the project. "More than half the apartments have been booked so far."

One visitor at the Harisidhi complex is Basu Shrestha, a businessman who lives in Kathmandu's inner city Indra Chowk area. He says: "I want to take my family out. It is getting too congested to live in the city." Others inspecting the interiors are happy that there is now an alternative to buying expensive property, supervising unreliable labour and fixing the utilities. Does this presage the age of suburbia in Kathmandu? Some would hope not, but it will surely make urbanization slightly more planned. The only real estate development so far had been targeted at the super-rich in areas like Bhaise Pati with its large plots for villas.

Given the Nepali penchant for copying anything that is successful, urban planners hope other developers will copy this model and take the pressure out of inner city Kathmandu. Eyeing the potential bonanza that Ansal Choudhary will make, others are already joining the bandwagon. Kantipur Development Pvt Ltd is preparing to start a housing project at Balkumari, Thimi with 107 single homes, 16 2-bedroom apartments, and 14 3-bedroom apartments. The price of a single bedroom home is Rs 2.2 million and that of two- and three-bedroom apartments is Rs 1.4 million and Rs 1.6 million respectively.

Suraj Apartment at Tangal and Priyanka Apartment at Chabahil are the two complexes already in operation in Kathmandu. Half of the flats of Suraj apartment have been sold while rest are on rent. At Priyanka, all 16 flats are on rent ranging from Rs 14-16,000. Most tenants are businessmen from outside the Valley. Other luxury apartments and flats cater to expat clients and are out of the reach of most Nepalis.

Although demand is growing, many Kathmandu inhabitants have not outgrown their initial reluctance to living in flats. And despite the relatively low cost, it is still out of reach for the salaried class-since there is really nothing for less than Rs 1 million. The two-bedroom apartment of Stupa Houses at Budhhanagar is one of the few low-cost apartments, but even these are at Rs 700,000. "We targeted civil servants, and we will offer financing in a tie-up with the Sanchaya Kosh," says Stupa's Jitendra Shakh. Ansal Choudhary, for its part, is collaborating with the Agricultural Development Bank and United Finance for housing loans.
The private sector has stepped in where the government has failed. And the government has not even been able to fulfil its role of regulator. It has yet to introduce necessary regulations even though parliament passed the Joint Apartment Ownership Act in 1997. There is also no separate building code for apartments, and no rules on safety features like fire-escapes being implemented.
The apartment boom has also perked up the real estate market which was going through a slump. The price of small plots have risen in the past six months, and part of the reason is the demand for apartment complexes. But the main reason is still the Sanchaya Kosh's announcement of housing loans for civil servants which has brought a surge in new construction in Kathmandu Valley. "It was an encouraging year for the construction entrepreneurs," says Ram Prasad Maharjan, chairman of Construction Material Entrepreneurs Association. The price of per thousand bricks has soared from Rs 1800 to Rs 2900, and Maharjan says it may even top 3,500. Brick kilns have not been able to meet the increased demand. Cement and steel rods have also seen a rise in price

"The demand for cement has increased by 50 percent this year," says Bimal Chandra Poudel of the National Trading Center. As the Nepali cement industry is unable to address increasing demand, the import of Indian cement has risen. Due to this huge demand, Indian cement importers have hiked the price by Rs 11 per sack.

In the last fiscal year, Kathmandu Metropolitan City has issued Building Construction Permission for 2,347 houses. This year, the number crossed that mark by Arpil. It is estimated that 3,000 construction permits will be issued in Kathmandu and 1,000 in Patan.

(11 JAN 2013 - 17 JAN 2013)