Housing loans increased by 12.05% in the fiscal year 2022-23, exceeding the overall private sector credit growth of 10.57%. This surge in housing loans is attributed to the rising costs of construction materials. By June 2023, outstanding housing loans reached over Tk 1.19 trillion, accounting for 8.0% of private sector credit.
Private commercial banks hold the largest share with Tk 674.1 billion in outstanding housing loans, followed by state-owned banks with Tk 293.8 billion, other banks with Tk 49 billion, and specialized housing finance companies with Tk 101.9 billion. The state-owned Bangladesh House Building Finance Corporation has Tk 43.8 billion in outstanding loans. However, the expansion of housing loans is constrained by high land and flat registration costs, declining individual purchasing power, rising construction material prices, and a challenging economic climate.
The former vice-president of the Real Estate and Housing Association of Bangladesh highlights that the escalating cost of construction materials has greatly impacted the overall affordability of housing projects. Overall, while housing loans have seen consistent growth in the past two fiscal years, various factors limit the potential for even greater expansion.
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