The Bhutanese Leading the way.
Even for a casual observer of social media in Bhutan, it is apparent that there is a flood of offers to sell land in Sarpang Dzongkhag and Gelephu Thromde at much higher prices than ever before.
There are also interested buyers making offers and buying up land.
However, in a reflection of the state of the economy and also uncertainty of which private areas will be taken over by the Gelephu Mindfulness City project, the buyers are not as enthusiastic as the sellers resulting in lesser offers.
On 10th June 2024, the National Land Commission (NLC) had issued a notification lifting the moratorium to buy and sell land in Gelephu in effect since 14 July 2023, but it said that transactions will be reviewed on a case to case basis.
This should have led to a flood of transactions going by the apparent speculation.
However, since the lifting of the moratorium, Sarpang Dzongkhag and Umling Dungkhag only have 73 thrams registered for land transaction with their documents submitted.
Each thram, however, could include multiple transactions and buyers.
A source said this is not a big jump compared to the past years when each Gewog of Sarpang would report around 35 transactions a month.
So far 11 land transactions have been approved on four thrams by the NLC.
One thram in Dekiling Gewog has sold land to four buyers who bought 2.39 acres, 1 acre, 85 decimals and 50 decimals respectively.
Another thram in Chudzom Gewog sold land to 5 buyers who bought 1.04 acre, 50 decimals, 26 decimals 17 decimals and 13 decimals.
A thram owner in Samtenling Gewog sold 15 decimals and another thram owner from the same Gewog sold 45 decimals.
More transactions are expected to be approved by the end of the month after the one month cooling period for land transactions is over.
There has been a dramatic escalation in land prices due to the Gelephu Mindfulness City project coming in and the prices are staying up as there are people paying those prices too.
A source said that rural land in Tori Bari or Chokorling in Dekiling near Jigmeling once sold for Nu 60,000 and 80,000 per decimal not long ago but now the rate is around Nu 160,000.
The lower rate of registered transactions does not mean that there is no interest in land in Sarpang and Gelephu because in the bank auctions while even Thimphu land and buildings have no buyers, land from Sarpang and Gelephu are snapped up.
Given that this is rural land the sellers are mainly farmers.
A source said that both GMC and Dzongkhag officials go around telling people not to sell but people end up selling for multiple reasons.
Some are selling to clear banks loans and they feel better selling for a higher price and paying the loan than lose the land to the banks at a lower rate. Others are selling due to poverty and need of immediate money. In other cases, sale is also happening to meet major expenses like sending their children abroad to study.
Reflecting the reality, the Gelephu Thromde since the lifting of the moratorium has registered only around 12 land transactions.
An official said that people speculating that large stretches will be taken over by the project should not be scared as a lot of government land will be used and the compensation for land used will be fair.
Land transactions are not as high as the interest right now, but in the future once it becomes clear which areas will not be acquired and what will happen on the ground, then transactions will rocket upwards.
According to the Gelephu survey and land transaction, which focuses on establishing legal agreements and facilitating technical surveys, shared that there has been minimal activity in land transactions thus far. “The current market conditions don’t seem favourable for sellers as there are few buyers.”
The MPS broker service shared that the present situation in Gelephu shows a higher number of sellers compared to buyers, largely due to elevated prices and a wider range of options available. They estimated that out of every ten properties listed, only one is sold under the current conditions. Furthermore, they highlighted that there is no standardized market price for land, and many sellers are likely putting their properties up for sale primarily to settle outstanding loans.
In conversations with some land sellers, it became evident that a number of them lack an understanding of the market value of their land.
One seller, mentioned that they had set a price based on advice from a local contact rather than a well-established market rate. “I listed the land for sale on social media about two weeks ago, but so far, I haven’t received any inquiries. Since I am currently residing in Thimphu, I am not familiar with the current market price in Gelephu. It would be quite beneficial if there were a standardized price per decimal for different locations.”
The seller has a property in the core town area of Gelephu, which they have priced at 750,000 per decimal, though they are open to negotiation.
In comparison, a resident who purchased land in the core town area back in 2022-2023 paid 400,000 per decimal. The price for land in the industrial area of Jigmeling was around 90,000 per decimal at that time.
Additionally, another seller listing a property in the Samtenling area has set the price at 235,000 per decimal and reported having received some inquiries from potential buyers.
Meanwhile, a resident from Dechenpelri mentioned that there is active land buying occurring in their locality.
