Posted by: pire May 22, 2010
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Riten, I guess 12% interest rate is high amount anyway we slice it! I also think inflation in our country is an artificially created thing; our government is irresponsible to this issue. If they want to control, all they have to do is facilitate china-business.
I also want you to note that since the price hasn't increased in the last seven months (it is from the reports in ekantipur, nagarik)- if a house worth 2 karod seven months ago is still worth 2 karod now, it is actually worth 1 karod 86 lakh (plus what ever rent, most likely 2 lakh or less) if you factor in 12% interest rate.
Also, it reminded me the property bubble in Dubai. I knew a famous Nepali who put several million dollars there, and told me that the prices won't fall. He had same arguments: how Dubai is the center of arabian world, the most liberal place, dream of all south asian merchants, with limited land et cetera. Well, the price has fallen by 60% now. And he himself tells me that it is getting harder to get even some decent tenants.
I think there is simply not much profit out there in KTM real estate to move in rightnow. But that is my opinion-- I would rather just rent the whole house for 25K per month rather than buy it for 2 karod, and see how the price evolves over time. I obviously have been keen to sell my land for the promised price of last year.
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The key questions of interest are: why this sudden discontinuous jump? Sure, Maoist problem was rising since 1995 or so, people began going abroad in large mass since early 90s, but why now? After the Maoist problem has actually ended and all fires in Madhes seems to be less than in previous years? Why jump , rather than a continuous increase? How would the market correct it?
Last edited: 22-May-10 11:50 AM