Business Desk :
The construction sector of the country grew by 8.68 per cent in the last year, despite it is facing a great threat due to the price hike of construction materials including rod, cement and other components.
Data on the country’s construction sector are not available for the quarter under review (Q2 of FY22). However, according to BBS data, the sector grew by 8.68 per cent in FY21 which was 8.66 per cent in FY20.
The real estate, renting and business activities, which are considered a separate category of the services sector but have close links with the construction sector, also recorded growth at 4.90 per cent in FY21against 4.83 per cent in FY20.
Recently the construction sector was facing a great threat due to the price rise of construction materials including rod, cement and other components.
The price of rod increased almost 25 to 30 per cent over the recent years. People are struggling to continue construction.
The prices of brick, sand, stone, cement, glass, aluminium, pipe, indoor fittings and other materials increased during the recent time.
Besides, real estate sector will hopefully be able to cope with the ongoing COVID-19 pandemic as installment collection on previous sales started picking up gradually.
In spite of the tremendous potential of the construction and the real estate sector, factors like land value distortion, and absence of secondary property market, asset securitization and sale of mortgages, and backward linkage industries such as cement, ceramic, brick manufacturing, etc adversely affected its development.
But banks provide home loans at very cheap interest rates of below 10 per cent as a secured investment for the lenders, according to industry players.
With this backdrop, the real estate industry enjoyed a quick rebound from the Covid-19 fallout.
In the early stage of the pandemic, when the government imposed a two-month nationwide lockdown between March 26 and May 30 in 2020, the demand for apartments was nil as the people did not make such big investments in a time of crisis.
Many customers were also unable to pay their instalments on time and so, due to the lack of funds, entrepreneurs in the housing sector became very worried about how they would pay their employees.
