Compared to other areas of Nepal, the price of real estate in Kathmandu has increased at a very high rate. Some of the main reason for increasing the price of house and land in Kathmandu are listed as follows:
Kathmandu is the capital city of Nepal. Most of the big hospitals, institutions, schools, colleges are located in Kathmandu. It attracts people from different rural areas as it provides an opportunity, an easy lifestyle, and many things which they don’t get in their local resident. When many people migrate, it increases the demand for land, which causes an increase in price for the house and land.
When there are fewer products and more money, it causes the value of money to decrease which is called inflation. As many Nepalese go abroad for work they also send a huge amount of money to their home country. Foreign remittance has a 25.4% share in the GDP of Nepal. As there are more money and less product (land), the price of the land increase.
3. Lack of Investment opportunity
Nepal is an import-based country. In 2015-16 Nepal imported $11.9 billion in goods and services while exported only 782.2 million goods and services. As all the products and services are manufactured abroad, there fewer options for people to invest their money as there is no institution, manufacturing companies in home countries. Hence buying real estate properties is the best option for people, which contribute to increasing the price of house and land.