Within the past six months, the land price in Thimphu has doubled. The present land price in the core town area ranges between Nu 8 M to 10 M per decimal. The price in the outskirts like Olakha and Babesa is around Nu 1.2 M. This is attributed to the high demand and less supply of land due to more people interested to settle down in Thimphu.
“Since the number of vacant plots is reducing every month, every day the land price is shooting up because there is high demand. Maybe 5 years ago the land price was half. For instance, if it was Nu 0.5 M per decimal, today it has become Nu 1 M and we never know by the end of this year it might shoot up to Nu 1.5 M. The empty plots is finishing, there is hardly any left, people are interested to buy more and there is less in the market,” Kinlay Dorjee, the Thrompon of Thimphu Thromde, said.
According to the real estate brokers, the present land price in Thimphu is the highest ever recorded. They said till last year the land price was half of what it is now. The land price in areas such as Taba is Nu. 0.8 M per decimal at present. The brokers say, Thimphu now has limited land for the people to buy. The land in the core town areas is almost nil.
“A few years ago I sold 12 decimal land at Nu 0.3 M per decimal in Olakha. We were unaware of the land price. Now it could fetch Nu 1.2 M per decimal. About 20 to 30 years ago the price, as per my understanding, was Nu 15,000 to 30,000 per decimal. Now there are no lands to buy and can’t even afford to buy also. All lands are now sold and buildings have come up,” said Rinzin Dem a resident of Olakha.
According to the Economic affairs minister Loknath Sharma, the rise in land price comes with both positive and negative implications to the economy but the negative aspects outweigh the positive ones.
“Anything that increases to beyond a sustainable level or very fast is not good for the economy. Because the land price has risen very fast, it might lead to trouble when the saturation arises. Only a few people can afford such kind of land and they might finish whatever they have by investing in it. They might not be able to finish the construction on the acquired land, and it might be left idle. They might land up paying taxes and this will create a problem. But good thing is that if the land price keeps on increasing attracting our people working abroad to invest in it, then the economy of our country will be improved since the money will remain here and our people will be benefitted,” Lyonpo said.
According to the brokers, the land business has come down by 50% presently and there are hardly any buyers in the market due to huge hikes in the land price. Brokers also said the land price will come down once the banks stop giving loans and this according to them is possible in the near future.
