Between fiscal year 2020-21, the peak Covid period, and 2024-25, Nepal’s real estate loans grew by 72.41 percent and residential loans by 61.55 percent. This, according to the central bank’s first-ever real estate report, reflects a strong and sustained demand in the sector.

Titled Status of Real Estate Market in Nepal, the report says residential loans remained relatively stable, while real estate loans experienced short-term moderation before recovering quickly.

Government revenue from real estate peaked at Rs23.7 billion in the first quarter of 2021-22, declined sharply to Rs8.2 billion in the first quarter of 2022-23, and has since shown a modest recovery, reaching around Rs10–15 billion in the last fiscal year.

The trends suggest that Nepal’s real estate sector over the past three fiscal years has seen cyclical fluctuations, regional disparities, and gradual structural shifts.

According to the report, Madhesh, Koshi, and Lumbini provinces emerged as key hubs in terms of both the number and area of land transactions, while Bagmati led in declared value.

The consistent dominance of mid-sized plots (2.5–10 aana), especially in metropolitan and sub-metropolitan areas, reflects strong demand in that segment.

The central bank noted that growth in real estate and housing loans indicates continued formalisation of housing finance, even amid market volatility. However, revenue trends, despite recent recovery, remain below past highs, signalling a more cautious market environment.

Overall, while the sector continues to expand, it is becoming increasingly differentiated by region, plot size, and financing behaviour—highlighting both challenges and opportunities for future policy and investment.

“More than two thirds of loans issued by banks and financial institutions are backed by fixed assets, mainly real estate such as land and housing,” said Guru Prasad Paudel, spokesperson for the Nepal Rastra Bank. “A transparent real estate market helps prevent asset bubbles and supports economic stability.”

Paudel said the study would also support the development of a housing price index or real estate index to better evaluate market activity using reliable statistics. The report was prepared to analyse transactions at the provincial level, pricing trends, seasonal impacts, and revenue patterns.

“There is a positive relationship between real estate financing and transactions,” he said. “Increased financing has contributed to higher demand and transaction volumes.”

The report analyses trends using data from the Department of Land Management and Archive (DOLMA) and Nepal Rastra Bank. It examines fluctuations in transaction volumes, transacted areas, and declared values at national, provincial, and metropolitan levels over the past three fiscal years.

DOLMA records real estate transactions under various categories. This analysis is based on rajinama transactions, which reflect voluntary transfers or relinquishment of property rights and are commonly used to capture property buying and selling activity.

A rajinama transaction is a formal legal process for transferring ownership of real estate from seller to buyer, finalised at the Land Revenue Office with the issuance of a new ownership certificate.

Quarterly data show clear seasonal patterns in Nepal’s real estate market, with lower activity in the first quarter and peaks in the third and fourth quarters. The highest number of transactions—0.456 million—was recorded in the fourth quarter of the fiscal year 2024-25.

Madhesh Province consistently recorded the highest number of rajinama transactions, followed by Lumbini and Koshi, while Karnali and Sudurpashchim saw the lowest.

In terms of land area, Madhesh also accounted for the largest share, followed by Koshi and Lumbini, with Karnali and Gandaki at the bottom.

By land size, all provinces except Madhesh recorded the highest proportion of transactions in the 2.5–10 aana range. In Madhesh, however, most transactions involved plots larger than 20 aana, indicating a preference for bigger landholdings, often for agriculture or industrial use.

Bagmati recorded the highest declared value, peaking at Rs51.37 billion in the fourth quarter of the fiscal 2024-25. Nationally, total transaction value reached a high of Rs127.61 billion in the same period. Karnali recorded the lowest values, while other provinces hovered near the national average.

In metropolitan and sub-metropolitan areas, mid-sized plots (5 to 10 aana) accounted for the highest number of transactions. Very small plots (less than 2.5 aana) and very large plots (more than 20 aana) saw comparatively fewer deals.

During the review period, metropolitan cities accounted for about 4.1 percent of total transactions nationwide, 1.9 percent of total land area transacted, and around 13 percent of total transaction value.

This indicates that real estate in metropolitan areas commands significantly higher prices compared to the national average, the report said.

Transaction volumes in metropolitan areas have also risen steadily. Among them, Bharatpur Metropolitan City recorded the largest share of rajinama transactions, followed by Birgunj and Pokhara.