What does the budget for the fiscal year 2018-19 hold for the real estate sector?

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bti blog 2018
July 12, 2018 Real Estate Industry

“Scope for investment of undeclared money in real estate sector to prevent money laundering abroad”

Source:  Kaler Kantha

Date: 3rd June 2018

The article features demand by realtors for scope of investment of undeclared money in real estate sector. Realtors commented that even if there are laws and rules, without the opportunity to invest properly, people will send money abroad. The discussion took place on last Saturday at Dhaka Club in a round table talk titled, “Real Estate in National Economy”.  The discussion was held to focus on upcoming budget and was organized by REHAB (Real Estate Housing Association of Bangladesh) and CCN (Center for Communication Network).

Speakers at the round table commented that most of the housing opportunities are given to government employees for getting affordable homes in Dhaka and elsewhere, whereas common people are denied the same facilities. As a result of multiple factors such as high apartment registration fee, high interest rate on home loans, the real estate sector of Bangladesh has been suffering for quite some time. To speed up sales in real estate industry, realtors also demanded a certain amount to be paid to prospective apartment buyer and land buyers as motivation, reduction of land-apartment registration fee, lowering of home loan interest rate, and reduction in time taken for giving approval of plans.

REHAB President Alamgir Shamsul Alamin, Commerce Minister Tofail Ahmed along with other concerned people attended the round table talk.

“Small and old apartments to be costlier”

Source: The Daily Star

Source: 7 June 2018

The feature highlights the proposal of increase of VAT rates for smaller apartments as given by Finance Minister AMA Muhith. As per the article, apartments up to 1100 sft which previously had 1.5 % VAT will increase to 2%. This increase in VAT rate would negatively impact the middle income people looking to buy apartments. On the other hand, those with higher income looking at apartments for sale between 1101 sft to 1600 sft will enjoy a 0.5% reduction and pay 2% VAT instead of the current 2.5%.When buying flats above 1601 sft, the VAT will remain as it is at 4.5 per cent and these flats will not be imposed any additional indirect tax which the apartment buyers have to bear. The change in VAT rates comes at a time when real estate companies in Bangladesh have been relentless demanding for lowering of registration fee for flats. Currently, registration cost of new apartments hovers around 14 to 16 percent of the flat price, depending on the apartment size. Also, re-registration of old flats will have an imposition of 2% VAT.

“Home loan for public servants, policy effective from 2018-19”

Source: The Daily Star

Date: 7 June 2018

The article highlights implementation of new policy of home loans for government employees to motivate them for buying flats and apartments. With the new policy government employees can get loans for construction of homes or purchase flats anywhere in Bangladesh. Regarding this, a policy guideline has been prepared for the banks and financial institutions. Finance Minister AMA Muhit spoke a speech while presenting national budget for the next fiscal year. The loan will be disbursed with a moderate interest rate and the interest differential will be paid by the government as subsidy to the commercial banks.

“Realtors disappointed with the budget for the fiscal year 2018-19”

Source: Purboposhchimbdnews.com

Date: 7 June 2018

The article features impact of proposed budget for FY 2018-19 on the real estate sector of Bangladesh. Realtors expressed their disappointment as none of their demands have been fulfilled in the proposed budget by Finance Minister Abdul Muhit. First Vice President of REHAB Liakat Ali Bhuiyan commented that the proposed budget has been completely contradictory to realtors’ expectations and the increase in price of small flats is likely to hit the real estate sector hard.

“Robots- ushering in a new era in the construction industry”

Source: JLL India Real Estate Compass

Date: 28 June 2018

The article features merge of technology with the construction industry to usher in a new era. Over the years, dependence on technology has increased in all sectors and the integration of robotics to handle mega projects to provide cost effective and newer solutions is now the center for futuristic construction.

In many developed countries, use of technology in the form of drone, bulldozer automation systems, robots cutting, stacking and packaging materials and welding structural frames are becoming a common feature in large, complex construction projects. Various types of robots are employed for different tasks required such as logistics robots, industrial robots, and autonomous drones and so on to make the construction process relatively easy and less time consuming.

 Apart from tacking complex projects, a technology driven construction sector will also ensure environmental sustainability, factor in the time constraint to complete projects on time, and give real time updates.

Those days might not be so far when robots at construction site will be a common presence. With the use of technology, construction will become faster as updates from sites can be received instantly to predict and overcome problems and also enable engineers to view multiple projects remotely at the same time.