News you may have missed in the Real Estate Industry 2019

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Real Estate Industry 2019
December 3, 2019 Real Estate Industry

Land is an invaluable asset

Source: Dhaka Tribune

Date: 26 November 2019               

Of all the assets you can acquire, namely, gold, stocks, bonds, etc land is deemed to be the most profitable of them all.  The other assets may depreciate in value but a nice chunk of real estate will only see to benefit you in the times to come. Stock prices vary due to the market situation. The price of gold seldom changes but it is very expendable, i.e. needs to be traded to reap the benefits of its value; the same is true for bonds.

Land is the only one amongst the list, which is like the gift that keeps on giving. It is a proven fact that the value of land increases with time. Looking back through human history, we see evidence of wars, conquests, and trades being done just to acquire land. The demand for more land has never wavered. Especially in Bangladesh, where land prices have been going upward since its independence, investing in it can never be a bad decision.

In 1974, the upper ceiling price of land per katha was Tk.25000 for areas like Gulshan, Banani, and Dhanmondi (which grew to 6lakhs per katha in 1986) while Motijheel was at its most expensive due to its price of Tk50,000 per katha. The wildfire of development swept through the northern and southern parts of Dhaka. Slowly, urbanization caused overcrowding and people started to move in other directions, which led to areas like Mohammadpur, Mirpur, Shantinagar, Moghbazar, Bashundhara R/A, and Uttara to develop into remarkable housing areas. Now the sights are set onto Purbachal due to the new housing project that was announced. An area of untapped potential is expected to turn very profitable due to the government’s plans to build a whole region in that area.

Purbachal New Town Project

Purbachal’s eastward expansion

Source: Dhaka Tribune

Date: 26 November 2019               

The news of the Purbachal New Town Project, the crown jewel of the Rajuk Purbachal township project, has resulted in a boom of demand amongst those looking to acquire prime real estate. The prices of the land will start to increase with the rising demand and those who were lucky to be allotted land in the area are aware of their good fortune and are unwilling to let go of it. With the need for decentralization on the rise, the plan to expand and construct a region there brings forth opportunities for urbanizations and a chance to properly plan the layout of the city.

The Purbachal Project plans to house 1.5 million people in 26,000 residential plots and 62,000 flats along with all the necessary infrastructure and urban facilities on the 6000+ acres of land, (Dhaka Tribune, 2019). Unprecedented advancement has taken place ever since the announcement of the project. The impact it will have on the eventual goal of developing Dhaka as a megacity is yet to be seen.

House Loan

The housing loan market topples the Tk 80,000 crore mark

Source: Daily Industry

Date: 2 December 2019                  

Experts are demanding that housing loans should be made more affordable and the rate to be reduced for the long term development of the home equity loan market. More focus is being put on home loan portfolios by private financial institutions. “If the provision of home loan is lowered to 1 percent from the existing 2 percent, bankers would be interested in disbursing more loans and a level playing field could be ensured.” as quoted by Prof Helal Ahmed Chowdhury. Bangladesh Bank guidelines and the government policies that control the flow of credit from banks, hence the instructions of not providing loans for purchasing lands.

In September, the size of the total loan exceeded Tk 80,000 and according to the sources at Bangladesh bank, it makes up 10 percent of the private sector’s total credit. Home loans have increased the demand for homeownership and if the rates are reduced it could spell a higher demand in the near future; the profits would start rolling in for the real industry.

Dutch-Bangla Bank Ltd (DBBL), is providing the foremost competitive worth for home loans within the market. They have witnessed one hundred percent growth within the loan portfolio by September this year.

Dutch-Bangla Bank disbursed loans at 8.5 percent but decided to revise it up to 10 percent at the start of the year when the banking sector went through a crisis.