What is happening in the current real estate sector of the country? March 2017 Update

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April 1, 2017 Real Estate Industry

Get the latest scoop in the industry from various dailies and stay up to date with the real estate market in Bangladesh and its neighboring countries.

“Banks, housing to benefit from government home loan policy”

 Asif Showkat Kallol

Source: Dhaka Tribune Date: 12 March 2017

The article talks about the potential benefit of real estate sector and banking sector with government’s home loan facility for public employees. The government plans to allocate TK 800cr annually as interest subsidy on loans, stated a finance ministry official.

An anonymous source commented that if the public employees invest in such loans, then it will help both the real estate sector and the banking sector of the country which are not doing so well. An official in Finance Division also spoke that the proposed home loan may have a ceiling of Tk 50 lakh for Dhaka residents and Tk 10 lakh for district and rural areas in Bangladesh. A committee which was formed last year recommended interest rate and subsidy to be 8% and 3% respectively, whereas the rest would be paid by the borrower.

Commenting on the prospects of this proposed policy, Rehab Vice President Liaqat Ali Bhuiyan spoke, “If the government provides land at low price, then realtors will offer 600-700sft flats at up to Tk20lakh to civil employees.”He recommended use of idle money in the bank, which is around Tk. 1,20,000crto be utilized for constructing buildings for the state employees. The article further mentions that Public Works Ministry has already submitted a proposal of Tk500 crore to the Planning Commission for disbursing loan to public employees for buying flats.

“RAJUK to solve housing problems of urban dwellers”

Source: http://www.bangladesh.gov.bd

Date: 7 March 2017

The article features a talk of Public and Housing Ministry Engineer MosharrofHossain at Jhilmil Apartment Project site visit. He stated that RAJUK will aid to solve most of the accommodation problems in the city. To fulfill this aim, around 1 lakh flats are being constructed for residential uses at Uttara sector 18,Purbachal and Jhilmil. He further spoke that Jhilmil project will have 13000 flats for low income and middle income apartment buyers. This will be the first project in real estate sector of Bangladesh under Public Private Partnership. The Public Minister also spoke that Jhilmil will be a smart and eco-friendly residential project with hospital, educational and other social facilities. The project will be situated on a 381 acre land where land development works have already been completed and development of a lake is underway.RAJUK Chairman M. BajlulKarimChowdhury, Chief Engineer Rayhanul Islam and others were also present at the site visit.

“Flat for sale at TK 60 Lakh”

Source: Latestbdnews.com Date:  14 March 2017

The article features an apartment fair organized by real estate company, Sheltech in the capital city of Dhaka. The fair was held as part of its 29th foundation anniversary and was arranged targeting middle income group of the country who can avail ready flat worth Tk 60 lakh. The company set an apartment price of Tk 5200 per sft for 1185sft apartment size. On the occasion of the fair, the real estate company offered discount of over Tk 2 lakh on these 3 bedroom- apartments.

The fair was arranged at the head office of the company at Panthapath in the capital city of Dhaka. The fair showcased mainly three real estate properties, one of which is located at Bashabo while the other two are situated at MirpurMazar Road.

Deputy General Manager of Sheltech, Ariful Islam, stated that the visitors showed keen interest in ready flats as it is easy to get home loan on this type of real estate properties. The fair is supposed to conclude on 25th March.

“Another real estate company in preparation of IPO”

Source: Samakal Date: 19 March 2017

The article features a signing ceremony between Shamsul Alamin Real Estate Litd.and Alliance Financial Service Ltd.

Initially, the real estate company appealed for capital collection through IPO (Initial Public Offering). The company expects to collect 80cr Tk through book building process. Regarding this an MOU has been signed between the company and Alliance Financial Services Ltd.  If the proposal is accepted then this will be the second real estate company after Eastern Housing Ltd in the share market, states the article.

Sources in the company cited that previously another such proposal had been submitted in 2012. However, it was cancelled due to amendments in Public Issue Law during 2015. Chief Financial Officer of the developer company, Bikash Chandra Shaha commented that the company wants to go through IPO for collecting capital for its ongoing projects as well as repay bank loan amount up to TK 20cr. He further commented that if the company gets IPO approval within six months then the company can complete the ongoing project. When asked about the renewed proposal after such a long time, he commented that the real estate sector concurrently holds ongoing projects along with future development projects and in 2012, fund for that project was sourced from elsewhere.Managing Director of Shamsul Alamin Real Estate Ltd, Almagir Shamsul Alamin and Managing Director and CEO of Alliance Financial Services Ltd, Md. NazrulIsalm besides others were present in the signing ceremony.

“No information about impact of GST on real estate: Government” 

Source: Economic Times of India Date: 29 March 2017

The article talks about the possible impact in real estate pricing due to changes in Goods and Services Tax. Ministry of Housing and Urban Poverty Alleviation affirmed in a written statement that the Ministry is currently unaware about the impact of GST on the real estate sector of India. Real estate experts in India expressed concern that a negative impact of GST may pose an obstacle to Prime Minister’s program to solve housing problem in Indian urban areas by 2022.  RaoInderjit Singh, Minster of State for Housing and Urban Poverty Alleviation recommended Finance Ministry to exempt service taxes for the real estate sector to enable affordable housing along with waiver of stamp duty. The Minister informed that although Madhya Pradesh and Haryana Government are both offering reduced stamp duty for a particular sector, no such reduction for affordable housing is implemented in Andhra Pradesh. For instance, Haryana Government has reduced stamp duty from 12.5% to 5%. Moreover, there is an additional 2% tax for women and no stamp duty for transfer of property between family members.