Post-Covid Rental ( 2022 ). A new normal? – चार कोठा

Post-Covid Rental ( 2022 )

Rents of houses & flats in Kathmandu are gradually decreasing with each passing time. This is evident by the price of rent a property was demanding before the pandemic and what the landlords are willing to accept for the same property right now. A 2bhk flat surrounding the core part of the city such as Samakhusi, Lazimpat, Chabahil, Baneshwor that used to fetch above Rs 28000 / per month are now available for Rs 24000.

Even commercial units like shops and shutters have seen a significant price decline. With the exception of a few stubborn owners who do not want to lower the rent for anything, shutter rent has declined even in commercial hubs like. Thamel and New Road area. Earlier, it was a common practice for a property owner, or a seller, to demand a ‘SALAMI’ ( couple of months’ rent worth of premium ) for leasing the property if their property happened to be in a prime location. That is very uncommon now.

With the global recession on the horizon and events that are taking place worldwide as well as our own country’s economic situation, we are certain that rents will go down even further in the coming days. The lockdown has seriously affected the economic activity of the country. And although it has been more than a year since the lockdown was lifted, the overwhelming majority of the businesses has not been able to recover from the loss accrued during the covid-period and has not been able to find the same momentum as before. Financial losses are significant and this has seriously impacted the economic activities, profit margins of businesses, and employment opportunities.

As such, demand for houses, flats etc for rent have drastically gone down. As the economic outlook is bleak, people are reluctant to invest in new ventures and existing businesses are not keen on expansion; in fact, many are already downsizing a great deal. And since there is no demand as earlier, landlords are more ready for compromise and settle for much less rent.

A short ride around the city will depict the situation clearly. Every fourth / fifth property around the city has a ‘To-Let’ banner hanging at the front. Many of them have been visible there for many months.

I think this is the new normal. And the sooner the landlords accept this reality the better it will be for them as we cannot see things being the same as pre-covid period anytime soon.