The Bhutanese Leading the way.
Currently, the trend in real estate market has shifted from people buying properties to build assets in the country to selling them to go outside for better opportunities. The Australia Rush and the downturn of the economy has had a ripple effect where the real estate market is also affected.
Going by current trend in the real estate market, many real estate agents and agencies agree that there are more sellers than buyers.
Jigme Tenzin, the CEO of Housing.bt, shared that the rush of buying properties has decreased.
“The hype of people wanting to buy properties here in Bhutan has decreased drastically from the enquiries that we get and the listings that we have in our site. One of the reasons could be because of the trend to go outside as they sell their properties to go out.”
He also added that trend has shifted since 2021 with more sellers and less buyers, and even in terms of sale of shops in and around Thimphu.
Similarly, Kelzang Dorji from T-Rank Estate shares that there are more sellers than buyers. “Before, Thimphu’s land was considered premium and was very biddable. Currently, the biddings are less and we have less customers.”
He also added that the reason could be because of people leaving the country.
Sonam Dorji, one of the oldest real estate agents, shared that the real estate market has changed drastically. “Considering the trend before and after COVID, the real estate market was very vibrant then and currently, the vibrancy has been lost.”
He added that the trend of more supply in the market and less buyers can be attributed to people going abroad, frozen credit services and people building their assets and investing abroad.
He also shared that there is an increase in the sale of lands as rural people are unable to pay back their loans and opt to sell their lands to repay it back.
The economic downturn after Covid, the frozen credit services, the Australia rush, decrease inward flow of remittances have directly or indirectly influenced the real estate market and its drastic changes in terms of vibrancy.
In the year 2022, there was a major drop in the remittances with net inward remittance recorded at Nu 4.333 billion (bn), a decrease by 27.6 percent. The total inward remittance dropped to Nu 6.861 bn in FY 2021/22 from Nu 8.801 bn in the previous year. In fact, a lot of the large inflows of remittance in the past was to buy land. The trend now is to buy real estate in Australia to save on rent and have an asset there.
With real estate market losing its previous vibrancy, Jigme Tenzin shares that this issomething unprecedented which has not happened before. “We see the real reflection of the economy as many factors have contributed to this trend. Everything has happened together, the reforms, changes in tax policy, Australia rush, and loans closing down which has brought about a ripple effect affecting much of the economy all over.”
However, despite more supply in the market, the prices of land have not yet gone down. Many real estate agencies share similar views that although there are many sellers, prices are still the same.
Sonam Dorji shared that the prices might go down a bit if the situation stays the same for a while.
Kinzang Lhendup of Yaa Laa brokerages shared a different view. “There’s always market in Thimphu and 90% of the people buy properties here. There is a bit of less customers than before but there are always people interested to buy properties in Thimphu.”
Maita from Raymenta land survey and mapping consultancy which is certified to carry out land transactions, shared that land transaction has decreased, “Before, in a year, we used to get about 500 transactions, but now its only about 100-150 transactions in a year.”
He added that there are many sellers as people want to go out, but lesser buyers as people don’t have money with most credit facilities frozen and with less inflow of remittances.
