I had been thinking about buying real estate in Nepal. I had invested a few years ago, with lucrative returns but it looks like the market is coming to a top. I am no economist but as an investor I am trying to make the wisest decision possible. Anyways, I would like to point out the two articles that I came across.
The first one is an article from nepalnews dated september 25th, 2009.
http://www.nepalnews.com/contents/2009/englishweekly/spotlight/sep/sep25/national3.php"Most economists and officials agree that the present boom in the real estate sector in unnatural. “The
real estate boom looks unnatural. I think that once the current
investment in housing complexes, condominiums and apartments leads to
the situation of over-supply, the property prices could come down,”
said economist and former governor of NRB Dr. Tilak Rawal.
The NRB officials are worried that once the real estate prices come down, the banks could suffer a serious shock."
"How has been the last one year for Nepali banks?
Nepali
banks were relatively insulated from global recession. We were scared
that the recession could bring down the inward remittances. But,
fortunately, that did not happen."
Now look at the recent article dated on the January of 2010.
http://www.nepalitimes.com.np/issue/2010/01/6/Business/16660/print"In the last 5-6 years, remittance grew at 20 to 50 per cent a year.
Everybody seemed happy since there was cash coming into the country. Then
in September/October, remittance growth slowed and liquidity injected
from NRB dropped to 40 per cent. Since there was major reduction in the
source, naturally liquidity became tight."
I am not predicting a doomsday but just pointing out that if the smart asses in Wall Street didn't know what they were doing I doubt the Nepali bankers have any clue about a real estate crisis.
FF
