Are things looking up for the real estate sector? Read the bti blog to find out.
“Real Estate Sector on Revival”
Source: Manab Zamin
Date: 4 September 2018
The article highlights the current state of real estate sector in Bangladesh which has been reeling under tight pressure for several years. However, recently, due to lack of political unrest, reduced interest rates on bank loans, government employees getting home loan at low interest rates, and Bangladesh House Building Finance Corporation (BHBFC) lowering interest rates by 9 percent on building homes and buying flats have paved a better tomorrow for the real estate sector of the country. In addition, the government has taken up a project to provide flats to 40 lac families for the urban poor which will alleviate the housing problem of mass people in the country.
The real estate sector took a blow in 2010 after government made the announcement to no longer provide gas connection to households. In addition, unavailability of loans, collapse of stock market, political unrest had slowed down the real estate market drastically. However, the changing real estate scenario is slowly reviving the sector as sales have picked up gradually as apartment sales rose by 20% in 2016. Realtors are hopeful this trend will continue especially owing to the fact that land price has remained unchanged while apartment prices have not increased significantly over the past couple of years.
Sources from REHAB stated that the apartment price in Dhaka has fallen by more than 30% in areas like Baridhara, Banani, Gulshan and Dhanmondi, and the real estate sector has been growing. REHAB President Alamgir Shamsul Alamin commented that apartment price in Dhaka is rational and now is the right time to invest in real estate.
Meanwhile, government officials can apply from October for home loans with interest rate as low as 5% provided they have been permanent government employees for minimum 5 years and maximum 56 years. Under this scheme, almost 12 lac employees can avail this benefit.
“Home Loan Interest Rate at 9%”
Source: Prothom Alo
Date: 9 September 2018
The article features new home loan interest rate of 9% by government organization Bangladesh House Building Finance Corporation for buying and constructing flats. Previously the interest rate on home loans for constructing flats in Dhaka and Chattogram Metropolitan Areas used to be 9.5% and the interest rate for flats and buildings in divisional and district headquarters used to be 10%. However, in both the cases from now on the common interest rate will be 9%.
According to the BHBFC sources, new rates will be effective for those customers who have already taken loans of 10% and 9.5% interest rates. However, to get the opportunity of new rate, all of their installments need to be paid till now and the new interest rate will be effective for them one month after they have cleared the outstanding installment payment.
“Almost 270 Underconstruction Projects in Chattogram Not Yet Handed Over”
Date: 28 September 2018
The article highlights the delayed handover of 270 underconstruction projects in Chattogram due to financial insolvency which is hurting the real estate sector of Chattogram severely. Chattogram Regional President of REHAB- Abdul Qayuum Choudhury stated that the real estate sector is in dire condition as interest rates on home loans are high. Only a few banks and financial institutions have lowered the interest rate and moreover a special fund establishment is needed for boosting the real estate business in the port city. On the other hand, one realtor from Chattogram stated that although the real estate sector of the country is slowly reviving, to protect it, steps need to be taken by the government to ensure the lower and middle-income people can avail home loans with low interest rates easily. Apart from this, similar to worldwide countries, other real estate facilities need to be provided like reducing VAT, TAX, registration fee, and registration cost of secondary real estate market and so on to strengthen the real estate sector.
REHAB sources said that there are around 150 real estate companies enlisted with REHAB under Chattogram and a total investment of 5,000 crore taka in the real estate sector. However, due to various reasons like financial insolvency, political instability, around 270 underconstruction projects have been delayed for handover. Currently there are around 10,000 properties for sale but 4500 apartments out of these are defective. Chattogram REHAB co-chairman Engr. Md. Didarul Hoque Choudhury stated that the real estate is not only for the rich but also for lower and middle income people and to ensure housing for all, government needs to ensure easy bank loan facility and reduce registration cost.
“The Price of Land in Dhaka has increased by Three Times in Three Decades”
Date: 30 September 2018
The article highlights the scarcity of land in the capital city of Dhaka. Many Bangladeshis dream of buying flats in Dhaka but due to the high price of apartments cannot afford to do so. Meanwhile, the real estate companies are also in a conundrum as there are around 20,000 ready flats unsold in the existing market. The lower and middle income people are the worst hit segment in this scenario as they cannot afford high priced apartments and many people have lost faith in the real estate sector due to prevalence of scammers and frauds.
Sources from REHAB stated that many low and middle income people look for small flats in Dhaka ranging from 600 -1200 sft. One realtor commented that prices vary from area to area. For instance, flats in Shyamoli are priced at Tk 4,000 – 5,000 per sft and the rate is same for northern part of Mirpur Road whereas in Dhanmondi the flats are priced within Tk 8,000 – 12,000 per sft. For areas like Gulshan and Baridhara, the apartment prices are even higher. In addition, land price in Dhaka has increased by three times in the last three decades. Professor of BUET Urban and Regional Planning Dr. Ishrat Islam commented that the increase is due to difference in demand and supply. Demand has increased due to exponential population growth but land remains scarce in Dhaka. She also stated price has increased due to increased competition among developers. Commenting on that REHAB President Alamgir Shamsul Alamin said that government can dedicate lands at low price for development for lower and middle-income people. He further stated that in Dhaka around 8,000 new flats are sold every year and in 2017 it was 11,000. Another problem prevailing in the real estate sector is the presence of scammers and frauds. For instance, last year REHAB handled more than 600 complaints. Police sources confirmed that 60% of cases are land related.
Under these circumstances, it is a mammoth task to accommodate two quarters of the population of Dhaka in about eight hundred square kilometers. Dr. Islam commented that the government needs to rethink the matter to solve the housing problem and also tackle the existing real estate problems.
“Market sees substantial increase in women property-seekers: Housing.com-Makaan.com study”
Date: 27 September 2018
The article features rise of women property browsers online in a study conducted by housing.com and makaan.com in India. The objective of the study was to find out differences in what men and women look for when searching properties online. It used user-data from the two online real estate portals.
According to the study, women are leading in number when it comes to searching rental properties. In 2018, the percent of women rental property seekers stood at 54% whereas for men it was 46%. For buying properties, women also initiated more searches than the males. The findings revealed that women users looked for more information and used several sessions before taking a decision. 48% women also browsed more real estate images compared to 39% men. However, the study also revealed that men took the lead when it comes to closing the real estate transaction as 51% of the leads dropped off at the platforms were from males. However, in the near future number of women closing the transaction is likely to increase.