Does 2018 look promising for the Real Estate industry? Read the December Update to find out!

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real estate sector of Bangladesh
January 7, 2018 Real Estate Industry

“Discount at bti Chayabithi Apartment Fair”

Source: Kalerkontho

Date: 10 December 2017

The article features a three day apartment fair arranged by building technology and ideas ltd. (bti). The fair was held from 8 December to 10 December 2017 in Chayabithi project situated at Uttar Khan Mazar Road. The fair offered up to Tk 3 lac discount on the ongoing project as well as long term installment facility, home loan offers from leading financial institutions and so on to facilitate apartment buying.

“Real Estate Sales picking up”

Source: The Daily Star

Date: 19 December 2017

The article features the current real estate market which is expected to thrive as sales have increased in 2017 due to reduced interest rate on bank loans. Other factors that contributed to increased sales in real estate include political stability, lack of other investment options as well as falling share prices. Toufiq M Seraj, Managing Director of Sheltech commented that real estate sector is likely to grow in the upcoming year. He added that 2017 has been much better than the last two years.

In 2012, the real estate market experienced a sluggish momentum due to a multitude of reasons like political instability, lack of government support for gas connection. All these eventually led to reduction in property price which attracted many home buyers. Moreover, constructions of relatively smaller flats by leading developers of Bangladesh also enticed the middle-class and stable income groups for property buying.

AKM Shafiuddin Shahin, sales in-charge of Structural Engineers Ltd commented that in 2017 apartment price has increased by Tk 200-500 per square feet for almost all locations in Dhaka except Gulshan and Baridhara. Mr Shahin added that the reason was increase in demand owing to a stable political environment. However, there has not been much increase in luxury apartment sales as a niche of upper class seems to be interested in having second homes abroad.

Noor E Alam Siddike, Executive Director of Sales of bti also commented that sales have picked up in 2017 as people realized apartment prices would not fall any further and on top of that the low interest rate on home loans also attracted many potential home buyers.

Realtors are hopeful that 2018 would be a good year for the real estate sector of Bangladesh. All the realtors also agreed that the current challenge is ensuring gas connection to households which would require government support.

“Realtors urge government to reduce flat registration fees”

Source: Dhaka Tribune

Date: 21 December 2017

The article features the inauguration of REHAB Fair at Bangabandhu International Conference Centre in Dhaka on December 21. REHAB leaders urged the government to reduce registration fees for flats so that apartments can be affordable for middle income people. They also asked for the provision of single digit, long term credit facilities with flexible conditions which would enable middle income people to buy flats. Another recommendation was the distribution of Tk5,000 crore in the real estate sector and the implementation of low interest rates by banks in order to increase investment in housing projects.

Nurun Nabi Chowdhury Shaon, acting president of REHAB commented that if the registration fee for buying flats is reduced to an affordable rate then the common people will be encouraged to invest more in property buying. Commerce Minister Tofail Ahmed was present as the chief guest and he promised to arrange a coordinated meeting between REHAB and the concerned ministries to introduce a comprehensive plan of action for housing projects.

 “Flat prices beyond reach of middle class”

Source: The Daily Star

Date: 24 December 2017

The article features the 5 day long REHAB  Fair and highlights the high price of apartments which makes homeownership an elusive dream for many middle income people in the country.

Apartment price at the fair ranged between Tk 80 lac to Tk 1.5cr for a 3 bedroom flat depending on the location. Most of the leading developer companies did not have any project at less than 1 crore while some small companies had projects at Tk 4000 per sqft. Meanwhile financial institutions at the fair offered home loans at interest rates of 8.5% to 11.5% with Eastern Bank offering the lowest interest rate of 8.5%.  According to REHAB, the fair drew a huge crowd of 14000 visitors within 3 days.

“REHAB is trying to make a Satellite City outside Dhaka”

Source: The Daily Star

Date: 24 December 2017

The article features an interview of Liakat Ali Bhuiyan Milan, Vice President of REHAB by Sohel Rana. In the interview, Mr Liakat Ali spoke about construction sector in Bangladesh, role of REHAB, real estate development in Bangladesh etc.

When asked about the construction sector, Mr Liakat Ali stated that it is on a decline and needs to be revived as it affects our economy as well as many related industries like rod, cement, real estate and so on. He recommended that to revive the sector, single digit loan with long term tenure has to be given to both clients and developer companies. There was such a practice but it was stopped in 2009/2010.

Apart from arranging fairs in Bangladesh and abroad, REHAB is trying to build a satellite city outside Dhaka which Mr Liakat Ali believes would provide housing for lower and middle income people. Mr Milan stated the city would have amenities like utility service, internet service, schools, colleges, transportation, etc. He stated the development of such cities outside Dhaka can help bring down flat prices in Dhaka city where demand is high. He commented real estate is the one of the safest investments especially for banks as they give loans in exchange of mortgaging the land.

Commenting on the challenges of the real estate sector, he talked about political instability, safety, scarcity of gas and electricity for the apartments etc. Apart from these, he also commented on the role of REHAB in real estate sector. He informed that there are 1222 regular members of REHAB and approximately 1700-2000 developers are not REHAB members. He recommended if someone wants to buy a flat they should check if the developer company is a REHAB member as they can take action against developer companies only if they are enlisted as REHAB members.