The country’s real estate sector is showing clear signs of recovery following a prolonged period of stagnation, driven by an expansion in bank credit, increased transaction volumes, and renewed buyer confidence across major urban centres.
According to the latest study on property market trends published by the Nepal Rastra Bank, total real estate transactions rose by 4.74 percent in the last fiscal year 2025-26, reversing a contraction of 1.84 percent recorded in the fiscal year of 2024-25.
Central bank officials noted that the sector continued to grow in the fourth quarter of the last fiscal year (2025-26), although at a slower pace. Total transaction volume rose 12.25 percent year-on-year, compared with a 14.65 percent increase in the same quarter of 2024-25.
Nepal Rastra Bank Research Department chief Satyendra Timilsina said real estate transactions have been picking up in recent quarters. Data show a continued improvement in the last fiscal year 2025-26 compared to the previous year in the value and number of transactions, as well as the area of land traded, he said.
“This is data through mid-July. It shows that economic activity had gradually started picking up by then, and real estate transactions also improved accordingly,” Timilsina said. “Generally, real estate transactions tend to increase in the final quarter of every fiscal year.”
The increase in real estate transactions across sub-metropolitan cities, metropolitan cities, provinces and the federal level through the last fiscal year indicates that the sector is showing signs of recovery, he said.
Officials at Nepal Rastra Bank say the recovery reflects easing liquidity pressures in the banking sector and growing confidence among buyers. They say the sustained increase in registered property transfers suggests that capital is gradually returning to the real estate market.
The report highlights that property transfers under ownership deeds expanded by 12.28 percent in the fourth quarter, compared to a 15.45 percent increase during the same period of the previous year. Outright land sales under relinquishment deeds registered a steep rise of 22.88 percent, up from 8.15 percent in the fourth quarter of the prior year.
The total land area transacted during the fourth quarter increased by 15.41 percent, compared to a contraction of 2.98 percent in the same quarter of the previous fiscal year. Overall, the total value of property transactions for the entire fiscal year 2025-26 reached Rs720.86 billion, a sharp rise from Rs386.15 billion recorded in the previous fiscal year. For the fourth quarter alone, property sales amounted to Rs275.73 billion, compared to Rs127.61 billion in the fourth quarter of the prior fiscal year.
Government revenue from property transfers also saw a substantial rise. Capital gains tax collections in the fourth quarter surged by 63.22 percent, compared to a 29.98 percent increase in the same period of the previous fiscal year. Total revenue gathered from real estate transactions grew by 48.26 percent in the final quarter of the last fiscal year.
The central bank attributed part of this revival to easier access to credit. “Bank lending extended to the real estate sector, including residential home loans, expanded by 6.93 percent during the fourth quarter,” Nepal Rastra Bank stated in its analysis. “This compares to a credit growth rate of 5.86 percent recorded in the fourth quarter of the previous fiscal year.”
At the provincial level, Bagmati led the recovery during the fourth quarter, recording a 69.38 percent increase in the number of land sale deeds. In contrast, Madhesh experienced a slight decline of 3.44 percent, while all other provinces recorded positive growth. Bagmati also witnessed the highest expansion in total land area transacted, which expanded by 50.24 percent, whereas Madhesh recorded a 6.19 percent contraction.
“Across all seven provinces, total property transaction values rose compared to the same period last year,” the central bank confirmed. “Bagmati recorded the highest growth in overall value at 175.33 percent, while Madhesh posted the lowest growth at 31.98 percent.” Small land plots ranging between 2.5 to 10 ana [75.5 to 318 square metres] remained the most popular across all provinces.
The metropolitan level recorded a strong rebound. Total property transaction numbers in Kathmandu Metropolitan City rose by 155.74 percent during the fourth quarter of fiscal year 2025-26, followed by Lalitpur at 136.92 percent, Pokhara at 108.71 percent, Bharatpur at 63.04 percent, Biratnagar at 47.59 percent, and Birgunj at 29.19 percent.
Kathmandu also recorded the highest increase in transacted area, which grew by 208.22 percent, alongside a 217.40 percent rise in total transaction value.
In sub-metropolitan cities, property activity increased across almost all regions except Kalaiya, where transactions remained flat. Dhangadhi recorded the highest transaction count growth at 73.16 percent, while Hetauda logged the highest growth in both transacted area at 104.16 percent and total transaction value at 186.80 percent.