THE prolonged economic impasse has pushed the country’s realtors to a crisis. The New Nation on Thursday reported that the real estate companies are passing a real hard time as sales of flats and apartments continued to decline for the last couple of years due to unfavourable business climate in the country. The downtrend situation has been continuing in this sector since the end of 2009 as the concomitant results of stock market crash, non-availability of utility connections and bank’s apathy to invest in housing projects have all contributed to further the crisis. Above all, the worsening political environment of the last two years has remarkably lowered the confidence of the investors to fund new ventures. Especially, following the not-so-valid national elections in January, the economy, including the housing business, has gradually been loosing its upward trend due to a lack of confidence, particularly for untoward politics. It is thus apprehended that such a stalemate in this labour intensive sector involving around 200 supportive industries may cause further damage to the economy.
According to the realtors’ apex body REHAB, many reputed housing companies offered 10 to 15 percent price-cuts to attract the buyers. But this was not good enough to stimulate their sales. Flat sales by the companies dropped 21 percent in 2014 compared to that of the previous year.
There are about 10,600 ready unsold flats now while the number was 4,224 in 2013, showing a year-on-year rise of 250 per cent. In 2012, a total of 3,584 flats remained unsold. A REHAB assessment said, 187 companies have altogether handed over a total of 6,037 flats in the last three years. The companies handed over only 1,717 flats until October’2014 against 2,067 flats in 2013.
Housing sector contributes about 12-15 percent to the gross domestic product (GDP). About 2.5 million employment opportunities have been generated directly or indirectly by this sector. It stimulates demand for over 250 backward linkage industries, including steel, cement, tiles and sanitary ware, cable and electric ware, paint, glass and aluminium, brick and building materials generating huge employment.
We need housing with affordable cost, and therefore, this labour intensive sector cannot be destroyed just due to policy lackings on the government part. What the government should concentrate on is to control the extortion and manipulation of the sector and regulate the high profit making tendencies of the corrupt realtors. The cost must not go beyond the purchasing capability of the ordinary consumers owing to market manipulations. Banks should provide soft loans to the prospective buyers directly bypassing the developers. And the government must protect the housing sector to provide accommodation to the willing buyers, generate employment and revive the economy through policy support.
