Annual flat sales to cross 10,000 units for the first time

Realtors in Bangladesh have sold around 10,000 flats so far this year as customers shrugged off pandemic fallout and the government keeps extending the amnesty to the investment of untaxed money in the housing sector.

According to the data of the Real Estate and Housing Association of Bangladesh (REHAB), around 10,000 flats were sold in 2021, up from 8,500 to 9,000 per year since 2018.

"Despite the rising prices of raw materials in recent months, the sales of property have increased 10 to 12 per cent this year," said Kamal Mahmud, first vice-president of the association.

The prices of flats have started to rise in Dhaka, ending a three-year stagnation after easing of Covid-19 fallout as the demand for new homes increased.

The prices of flats increased by at least 8 to 10 per cent in the last one year due to the impacts of the price hike of steel and cement, putting pressures on apartment buyers, according to Mahmud, also the managing director of Skiros Builders.

Prices of steel, cement, bitumen and stone chips have surged in the last one year due to the rising demand for raw materials globally after economies reopened following the ease of the coronavirus pandemic.

 "Despite higher prices of flats, there is no ready flat in the market. Customers expect the prices to go up further in the coming months, prompting them to purchase properties."

"As per my assessment, the sale of sales has increased around 6 per cent this year as the demand has risen since last September when the Covid-19 situation started to improve," said Faizur Rahman Khan, managing director of building technology and ideas (bti), one of the top real estate companies in Bangladesh.

Although the cost of projects has gone up owing to rising raw materials prices, bti did not increase the price of flats, he said.

The real estate company has 800 flats in 44 ongoing projects in 30 locations in Dhaka and Chattogram. There are 72 more projects in pipeline.

Shihab Ahmed, general manager for sales and customer services of Shanta Holdings, a real estate company that mainly caters to premium customers, says their sales increased around 15 to 20 per cent, particularly in the commercial areas like Gulshan.

He acknowledged that they had to adjust the prices following the increase of the prices of raw materials.

As his company constructs properties for the high-end clients, the impact of the second wave of Covid-19 was not significant, since this group of buyers care more about quality and location rather than prices.

Industry people say the demand for properties is picking up as there has been limited investment opportunities in the productive sectors because of the pandemic-induced economic slowdown, a drastic fall in bank deposit rates, cheap loans, and the continued scope to invest untaxed money.

The REHAB does not have any accurate data about how much black money has been legalised in the current fiscal year. But Mahmud admits: "There is an impact of the facility in the real estate sector."

According to the National Board Revenue, around Tk 20,600 crore was whitened by 12,000 people in the last fiscal year.