The capital city has now less flats to offer as most of the ready-for-occupants flats are sold out. However, assurances will be aplenty that apartments are under construction in some ongoing projects.
But now turning newspaper pages reveals advertisements from developers fervently looking for land for building homes or creating commercial spaces.
Demand has increased after the government allowed unquestioned clemency for investment of illegal and undisclosed money, or in other words untaxed money, on land and flats on payment of a certain amount of tax, which would be calculated based on the property’s size and location.
Besides, a decrease in interest rates on loans for home purchase and a declining price of the share in the stock market further surged demand for new homes.
In May 2018, there were around 11,000 flats lying unsold, said the Real Estate and Housing Association of Bangladesh (REHAB) at that time.
“During the pandemic we did not take the risk of constructing complete or readymade apartments,” said REHAB President Alamgir Shamsul Alamin.
“But the demand increased thanks to government policy support. For this reason, there is now a shortage of ready apartments against demand,” he said.
The influencing factors include the demand increase, the government policy support, a reduction in flat registration fees and availability of cheaper home loans, he said. He said around 2,000 flats were sold between last November to January.
The REHAB president believes that at least Tk 5,000 crore of untaxed money has been invested in the housing sector. But he could not state how many flats were sold during the last eight months of the current fiscal year.
The REHAB chief suggested that the government should extend the existing support and reduce the registration rate on the price of the purchase to 7 per cent from around 12 per cent at present.
FR Khan, managing director at the Building Technology & Ideas (bti), said the demand for flats had increased since September for the government amnesty as well as the low rate on bank deposits.
For this reason, people who have money available invested in purchasing flats to permanently own assets, a psychological impact of the helplessness created by the Covid-19 pandemic, he said.
Nonetheless, pointing out the fact that the recent price hike of raw materials, he said it would raise prices of every square foot by Tk 400 to Tk 500 and this impact would fall directly on customers. Besides, the cement price per bag has increased from Tk30-50, in recent days.
In December, the price of steel, a major raw material of the construction sector, increased by 17 per cent.
The retail price of 60-grade mild-steel (MS) rod rose to Tk 64,000 per tonne, up from Tk 54,000 in November and to Tk 61,500 in the corresponding period last year, data from the state-run Trading Corporation of Bangladesh showed. The price has remained unchanged.
Afterwards the price of cement increased by around 5 per cent as a form of commercial adjustment. The 50-kg bags, which were being sold at Tk 390 to Tk 420 depending on the brand, reached Tk 410 to Tk 440.
However, he said, no realtor had yet increased prices of flats after the pandemic as they had used raw materials purchased at previous rates. But the impact will come about in the near future, he warned.
IPDC Finance lends up to 85 per cent of a flat’s value at 9 per cent interest for a maximum of 25 years.
IPDC facilitates this financing scheme to clients of Assure Group, BTI, Sheltech, UDDL, Concord, Assurance, Bay Developer, Shanta Holdings, Ranks Real Estate, ABC Real Estate, Anwar Landmark, Finely Properties, ANZ Properties and Sanmar.
Sirajus Salekin, head of mortgaging at IPDC Finance, said now they were getting clients who were purchasing readymade flats, which made it clear that there would be a shortage of ready flats in the market.
As per their observation on loan applications where prices are mentioned, the price of flats and land had increased this year compared to last year.
“We have been disbursing home loans of Tk 120 crore to Tk 150 crore per month for the last four to five months to individual clients and entrepreneurs of the real estate sector,” he said.
Tanvir Ahmed, managing director of Sheltech Group, one of the leading realtors in Bangladesh, said the present trend was a form of recovery of the deficit left behind by the Covid-19 pandemic as demand had increased compared to the preceding months.
Sheltech is organising a month-long solo housing fair at its corporate office at the city’s Panthapath area.
According to him, Sheltech has 12 ready and partially complete projects and 16 ongoing projects where flats prices ranged between Tk 90 lakh to Tk 14 crore.
However, he said, the number of flats ready to be handed over were very low compared to those in the ongoing project.