Apartment market still lacks confidence
AFTER THE MASSIVE EARTHQUAKE, SALES OF APARTMENTS HAVE COME TO STANDSTILL
After the massive earthquake last year, the housing market is yet to show some confidence in highrise apartments. According to developers, no apartment project suffered structural damage, though most of them had suffered cosmetic damages by the earthquake. Despite maintenance after third party inspection and government’s assessment of these high rise buildings, people are still hesitant to live in them. Post earthquake, developers have not got any inquiry about apartments and sales have come to standstill.
“Presently, the business of apartment is at a standstill because of the major disaster that struck on April 2015,” said Om Rajbhandary, Chairperson of Urban Development Committee at the Federation of Nepalese Chambers and Commerce Industries, adding that it will take a few months more to get back to normal. He further said that gradually people have returned to their apartments. Citing that there is no any other option than to go vertical, he said, “People should know that apartments are structurally safe. Unlike other individual houses, no apartment building has been reported to have structural failure.”
According to him, there is a huge scope for existing apartment projects in days to come. Rajbhandary opined, “Easy
access to finance with a historic low rate on home loans at around seven per cent, escalated cost of construction and land prices at present will slowly attract genuine buyers to purchase existing apartments.”
He assumes that there will be genuine buyers and investors rather than speculative buyers now opting for apartments.
According to him, developers and apartment owners should learn from the past to have insurance of property, a quality management team and coordination between owners and developers.
Earlier in the budget for this fiscal, the government introduced an easy process for foreign nationals to purchase apartments. However, it is still only in paper. On this, Rajbhandary said, “The government is yet to come up with directives. Due to lack of directives, foreign nationals cannot buy apartments. If only the government introduced directives, it can certainly help recovering developers.”
Shyam Milan Shrestha, Finance Director at CE Construction, said, “As a consequence of the earthquake, customers are not mentally convinced about purchasing highrise apartments. Their choice has shifted to individual houses rather than apartments.” Citing that they have completed repair work of damaged projects, he said, “Apartment owners have came back to reside in their respective apartments even though they shifted temporally. However, people are not mentally prepared to purchase apartments today.”
He said, “It was independent houses that collapsed during the quake. People should be informed that apartments are safe as they are constructed following building codes and by laws.” He further said that highrise apartments are also a sign of development and there is no option other than going vertical to meet housing demand in the near future.
The company has projects such as Grande Towers at Dhapasi, Retreat Apartment at Swayambhu and Rio Apartments at Kupondole. Shrestha informed that they are going to re-launch their Retreat Service Apartment next week.
Chiranjivi Dhungana, Project Manager at Sunrise Developers, said, “People are in wait and watch mode before purchasing apartments. And it will take at least two years to come to normal condition.” Stating that they are busy with repair work of their apartments, he said, “Almost 50 per cent of repair and maintenance work has been completed.” According to him, curtain walls of apartments are the only damage in their projects.
The company has three highrise projects — Sunrise Towers at Dhobighat, Sunrise City Homes at Anamnagar and Sunrise Apartment at Nakkhu. Citing that the scope of highrise apartments will always be there in future, he said, “It will take a year or two to regain the confidence of customers to purchase apartments.” As of now, the company has no plan to come up with new projects. He said that they are also in wait and watch mode for improvement in the market.