NRB Real Estate Report 2026: Bagmati Transactions Surge 33% — Full Province-Wise Breakdown

Nepal's property market is telling two very different stories depending on where you look. Nepal Rastra Bank's (NRB) latest real estate transaction report shows Bagmati Province booming with 33% growth, while Madhesh Province is the only region in the country actually shrinking. Here's the full province-wise breakdown, what's driving the divergence, and what it means whether you're buying, selling, or building.

Overview of NRB's Real Estate Trend Report

NRB's latest real estate transaction report, released in early July 2026, covers the first nine months of FY 2025/26 (mid-July 2025 to mid-April 2026). Nationwide, the total number of real estate transactions rose 6.42% compared to the same period the previous year — a genuine turnaround after a 4.52% decline recorded a year earlier. Even more striking, the total declared value of these transactions jumped to Rs 183.90 billion, up sharply from Rs 100.07 billion in the same period last year. This report builds on NRB's first-ever quarterly real estate survey, launched in April 2026, which the central bank says is part of a broader push toward eventually building a proper real estate price index for Nepal.

Bagmati Province: 33% Growth — What's Driving It

Bagmati Province recorded 33.01% growth in real estate transactions during the review period — by far the strongest performance of any province. This isn't a new phenomenon: Bagmati has consistently accounted for roughly a third of Nepal's total property transactions and leads the country by declared value, driven by the concentration of three of Nepal's six metropolitan cities — Kathmandu, Lalitpur, and Bharatpur — within its borders. Mid-sized plots of 2.5 to 10 aana dominate transaction activity in metropolitan and sub-metropolitan areas, reflecting steady demand from urban homebuyers and small investors rather than speculative large-scale land deals.

Madhesh Province Slump — Possible Reasons

Madhesh was the only province to record a decline, with transactions falling 4.79% during the same nine-month period. This is a notable reversal, since Madhesh has historically been Nepal's second-largest real estate market by transaction volume and land area, typically dominated by larger plots exceeding 20 aana used for agricultural or industrial purposes — a very different buyer profile than Bagmati's urban, mid-sized-plot market. The slump likely reflects a combination of factors common across the Terai region in recent periods, including softer agricultural land demand, tighter credit conditions for larger-ticket purchases, and a more cautious buyer sentiment compared to the urban, salary-and-remittance-driven demand fuelling Bagmati's growth.

Nationwide Real Estate Loan (LTV) Rules from NRB

NRB's Loan-to-Value rules continue to shape who can borrow how much against property. First-time homebuyers can access up to 80% LTV financing on housing loans up to Rs 30 million, provided the property doesn't exceed 3,000 square feet and the borrower has never previously taken a home loan from any bank or financial institution — though rental income cannot be counted toward EMI affordability under this scheme. For general individual residential housing loans, the standard LTV cap remains at 50%. Licensed real estate developers and government-approved residential housing projects, however, can access up to 70% financing, reflecting NRB's intent to support organised, larger-scale housing supply over purely individual land speculation.

Construction Sector Relief: Partial Moratorium Explained

Recognising that large construction and infrastructure projects — hydropower, hotels, hospitals, tourism ventures, and manufacturing facilities — often take years before generating any revenue, NRB has eased its project financing rules. Under the revised provision, interest accrued during the construction or moratorium period can now be capitalised, meaning it's added to the loan balance rather than demanded in cash, until the project actually starts earning income. Crucially, NRB has clarified that this doesn't count as loan restructuring, sparing genuine long-term infrastructure projects from the stricter classification and provisioning treatment that restructured loans usually attract. The central bank has gone further for projects damaged by natural disasters: if a landslide, flood, earthquake, or similar event delays a project by more than two years, banks may extend the grace period and capitalise interest, provided all overdue principal and interest are cleared first — such loans are still treated as restructured, but banks only need to maintain 12.5% provisioning instead of the usual 25%.

What This Means for Home Buyers and Real Estate Investors

For buyers in Bagmati and other urban centres, rising transaction volumes and values suggest a market that's genuinely warming up again after years of sluggishness — good news if you're selling, but a signal to move carefully and do proper due diligence if you're buying, since rising activity can also mean rising prices. For those looking in Madhesh, the current slump could represent a buying opportunity for larger agricultural or industrial plots, provided you're comfortable with a market that's currently cooling rather than heating up. Across the board, the eased LTV rules for first-time buyers and developers mean genuinely new entrants to the housing market — rather than repeat investors — are the ones NRB is trying hardest to support.

Outlook for Nepal's Property Market in 2026/27

Real estate and residential loans have grown substantially over the past several years — real estate loans by over 72% and residential loans by over 61% between FY 2020/21 and FY 2024/25 — underscoring how central property has become to Nepal's overall credit growth, with more than two-thirds of all bank loans backed by fixed assets, mainly land and housing. With banking liquidity comfortable, LTV rules eased for first-time buyers, and construction-sector relief now in place, most signs point to continued gradual recovery in the sector through FY 2026/27, though the sharp regional divergence between Bagmati's boom and Madhesh's slump is likely to persist unless underlying demand conditions in the Terai improve.

Frequently Asked Questions (FAQs)

1. Which province had the highest real estate transaction growth in Nepal?
Bagmati Province recorded 33.01% growth in real estate transactions during the first nine months of FY 2025/26 — the highest of any province.

2. Which province's real estate market declined?
Madhesh Province was the only province to record a decline, with transactions falling 4.79% over the same period.

3. What LTV ratio can first-time homebuyers get in Nepal?
First-time homebuyers can access up to 80% LTV financing on housing loans up to Rs 30 million, provided the property is no larger than 3,000 square feet.

4. What is NRB's construction moratorium relief?
Interest accrued during a project's construction period can now be capitalised into the loan rather than paid immediately, without the loan being classified as restructured, easing cash-flow pressure on long-term infrastructure and hospitality projects.

5. Is Nepal's real estate market recovering overall?
Yes. Nationwide transactions rose 6.42% in the first nine months of FY 2025/26, reversing a 4.52% decline the previous year, with total transaction value nearly doubling to Rs 183.90 billion.

Conclusion

Nepal's real estate market in 2026 is a tale of two regions: Bagmati riding a genuine urban recovery wave, and Madhesh navigating a real slowdown in its larger-plot, agriculture-linked market. With NRB easing LTV rules for first-time buyers and offering genuine relief to long-gestation construction projects, the policy backdrop is supportive — but as always in real estate, location continues to determine the story far more than any single national statistic.

Thinking about buying, selling, or financing property in Nepal this year? Follow Bandhu Fintech for more data-driven breakdowns of Nepal's property and banking trends.