Do you want to know the secrets behind the real estate sector growth in Bangladesh? Read the January 2018 Update to find out.
bti Winter Fair begins today
Source: The Daily Star
Date: 26 January 2018
The article features an annual winter corporate fair organized by building technology and ideas ltd. (bti). The four-day apartment fair, which started on 26 January, 2018 showcased ready and ongoing projects of bti in various locations of Dhaka, Chittagong, and Comilla. The fair also provided expert advice on property related tax and legal documents.
Housing- the main problem of Dhaka
Source: Daily Ittefaq
Date: 1 January 2018
The article features the findings of a research by BRAC University. According to the report, housing is one of the main problems of Dhaka. The city has 4,000 settlements and the demand for housing is 0.12 million new flats or houses per year, whereas in reality, only 25,000 houses are constructed each year. The report also reveals that people spend 30% of their income on house rent.
The research was carried out by the Institute of Governance and Development of BRAC University (BIGD). Apart from its own survey, the research also took the support of data from the government, United Nations, and RAJUK. The research focused on housing in the capital city, the affordability of the population, basic apartment facilities, disaster preparedness, etc. The research analyzed the demand for housing in the capital city, the breaching of building construction rules and provided recommendations to tackle the housing problems.
The survey included 400 houses in areas like Dhaka, Rampura, Mirpur, Badda, etc. It revealed that 44% of the population resides in Dhaka. Out of them, 56% does not own any land or flat; 32% lives in own flats, whereas 68% lives in rented homes. The survey also showed that 55% of this population lives in apartments less than 1000 sft and 5% lives in apartments of 2000 sft. Additionally, most of the real estate developer companies target only high-income and middle-income people. It is also seen that majority of the people prefer buying flats from developer companies to buying RAJUK projects. Research on home loans showed that currently, banks pay 70% of the apartment value, whereas the buyer has to pay the rest of the amount at a single time, which discourages many buyers since they lack the financial resources. The research recommended that the loan amount a buyer needs to pay can be brought down to 5% from the existing 30%.
Plots and apartments worth Tk 638 crore sold in REHAB Fair
Source: Manab Zamin
Date: 7 January 2017
The article features the highlights of REHAB Fair which was recently held in the capital city. 712 apartments, plots and commercial space worth Tk 638 crore were sold in the fair. The fair attracted a huge crowd of 27,169 entrepreneurs as well as visitors. The five-day fair also offered Tk 178 crore as home loan. The concluding ceremony was held last Thursday at BICC, where REHAB President- Alamgir Shamsul Alamin commented that compared to the fair of last year, this year attracted a large crowd of prospective customers. He further stated that the real estate sector is reviving from its dire condition, which was persistent in the last few years. Senior Vice President of REHAB- Nurunnobi Chowdhury Shaon recommended that in order to speed up the real estate sector, the government needs to reduce property registration fee from 15% to 6%. He was hopeful that the sector can overcome its challenges before the next budget.
Sales in real estate sector increased by 20%
Date: 21 January 2018
The article highlights the increase in sales in the real estate sector of Bangladesh compared to the last few years. According to the article, the real estate sector of Bangladesh had been in a dire condition since 2010 after the government announced that gas connection would not be provided to residential buildings. Also, the share market crisis and the unavailability of home loans were some of the other factors responsible for a stagnant real estate market.
However, due to fall in interest rate and increase in loan facilities for NRB, the real estate sector is reviving. Compared to apartment sales in 2016, sales in 2017 have increased by 20%. Realtors expressed that during 2013-2016, except a few leading developer companies, many companies struggled to maintain the construction work schedule. As 2017 saw some improvements, realtors are hopeful that the coming years too would be fruitful for them.
Sources from REHAB stated that due to lack of investment in the real estate sector, REHAB incurred a loss of Tk 1,000 crore. Apartment demand in prestigious locations diminished greatly for which many developer companies had to rent out the apartments. Due to the fall in demand, developers reduced the apartment price and gave special offers, which revived the real estate sector. Information from REHAB also showed that apartment price in various locations of Dhaka has decreased by more than 30% depending on developer companies. The highest increase in apartment price is seen for apartments in Baridhara, Banani, Gulshan, Dhanmondi, Lalmatia, etc, and the popular locations in Dhaka are Mohammadpur, Lalmatia, Mirpur, Uttara, Siddeshwari, Bashundhara, Shantinogor, Kalabagan, and Eskaton. REHAB President- Alamgir Shamsul Alamin stated that apartment price in Dhaka is quite reasonable and now is the right time to invest in the real estate sector as it is reviving once again.
Recommendation to reduce interest rate to 5% on home loans
Source: Daily Ittefaq
Date: 23 January 2018
The article features a recommendation from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) to reduce the interest rate on home loans to 5%. The organization, which is responsible for safeguarding the interest of the private sector in trade and industry in Bangladesh, also requested the concerned authorities to increase the loan tenure to a minimum of 10 years. Additionally, to augment the real estate sector of the country, the members asked for a reduction in the existing registration fee of 12% to 6%-7%.
The discussion was held on Tuesday in a standing committee meeting of FBCCI relating to Ministry of Housing and Public Works. FBCCI Vice President- Md. Muntakin Ashraf, Director in Charge of the standing committee- Rashudel Hossain Rony, Chairman of the committee- Liakot Ali Bhuyan, besides others were present in the meeting.
Real Estate sector in Chittagong is slowly gaining momentum
Source: Chittagong Journal
Date: 31 January 2018
The article features the recovery of the real estate sector in Chittagong. Realtors cited the single-digit interest rate and other home loan facilities as reasons for which the interest of home buyers have increased.
Unlike the high-income people, middle-income people cannot simply purchase lands and construct their own flats, which is why they are the segments who are typically interested in buying flats. Realtors also hoped that if the registration cost is reduced and the amount of loan is increased, then the pace of real estate sector will further increase.
According to REHAB, real estate investment has increased over the last five years, which is shown below:
|Year||Real estate investment (in Tk)|
|2013||Tk 3,000 crore|
|2014||Tk 3,750 crore|
|2015||Tk 4,000 crore|
|2016||Tk 5,000 crore|
|2017||Tk 6,500 crore|
REHAB Vice president and Chittagong Regional Manager- Abdul Qayuum Chowdhury stated that in 2009, there was a limit of Tk 7,000 crore for flat buyers and the full loan amount was also paid back to the banks. He recommended increasing the loan amount to Tk 20,000 crore. Apart from this, he also suggested reducing the registration fee from the current 14%-16% to 7% as Bangladesh has the highest registration fee among the SAARC countries. He further commented that if registration fee of secondary apartments is lowered to 2%, then many people in our country would be able to buy a flat. He also spoke about building projects in public-private partnership and increasing the scope of investment in the real estate sector with undeclared money without any hassle.
REHAB Chittagong Regional Co-chairman- 2 – Engineer Didarul Haque Chowdhury commented that real estate sector is slowly recovering and the concept of apartment living is a great one for urbanization. He further stated that to solve the housing problem in Bangladesh, the government has to increase its support for the development of the real estate sector.