Kazi Zahidul Hasan :
A slump in interest rate for home loans has brought hope to real estate companies, which were struggling with poor sales and rising inventory, insiders said.
The rate has fallen to as low as 9.0 per cent from 17 per cent a couple of years ago due to lack of investment opportunities in the face of power and energy crisis and infrastructure bottleneck.
“The sector appears to be recovering on account of fall in home loan interest rate and current political stability. Rising queries for buying apartments are giving the realtors a positive signal,” Alamgir Shamsul Alamin, President of Real Estate and Housing Association of
Bangladesh (REHAB) told The New Nation on Sunday.
He said, “We expect the rate will remain unchanged leading to gradual pick-up in flat sales. Lower interest rates have raised hope among real estate companies that the slowdown in their sales may end sooner than anticipated”.
“The current stability in the country’ political arena is also expected to leave a positive impact on the real estate business,” said Alamgir Shamsul Alamin.
The country’s real estate sector had experienced a boom period in between 2005 and 2012 when Bangladeshi expatriates and upper middle class people thronged for buying flats boosting business of the real estate companies.
Since 2012, the sector has been passing a difficult time leading to deep slump in flat sale. The slump has also affected the backward linkage industries such as cement and steel manufacturing.
“It later entered into a difficult phase as a result of falling income by Bangladeshi expatriates, political uncertainty, a squeeze on bank loans, high interest rate, a bearish stock market, lack of gas connections to new buildings and harassment by government agencies with regard to sources of income of flat and plot buyers,” said Alamgir Shamsul Alamin.
He stated all these factors have hurt the real-estate business leading to a significant drop in flat and property sales.
“The situation seems to be started reversing taking advantage of a congenial business and investment climate coupled with drop in bank interest rate,” said the REHAB President.
When asked, he said, “The government agencies have let off the questioning about the source of income of home buyers following REHAB’s fruitful discussion with the government high-ups. This has created interest among home buyers again”.
The REHAB leader contradicted with the media reports on 8000 unsold flats saying that these numbers are fabricated and far above the ground.
“As my knowledge, no flat or apartment of reputed home builders remained unsold. Flats of little known or non-REHAB member companies might have remained unsold,” he claimed.
He added, “It is hard to ascertain the actual number and it may not be above 3000”.
Alamgir Shamsul Alamin said, “A rebound in the housing sector is visible now and it can boost further if the government extends policy supports”.
The policy supports including formation of a Tk 20,000 fund so that low and middle income people can access loans at a single digit interest rate, cuts in registration fees and income tax.
According to a conservative estimate, the total investment in the real estate sector stands at Tk 80,000 crore.
The sector contributed 15 per cent to Bangladesh’s gross domestic product (GDP) and created 35 lakh jobs.
A slump in interest rate for home loans has brought hope to real estate companies, which were struggling with poor sales and rising inventory, insiders said.
The rate has fallen to as low as 9.0 per cent from 17 per cent a couple of years ago due to lack of investment opportunities in the face of power and energy crisis and infrastructure bottleneck.
“The sector appears to be recovering on account of fall in home loan interest rate and current political stability. Rising queries for buying apartments are giving the realtors a positive signal,” Alamgir Shamsul Alamin, President of Real Estate and Housing Association of
Bangladesh (REHAB) told The New Nation on Sunday.
He said, “We expect the rate will remain unchanged leading to gradual pick-up in flat sales. Lower interest rates have raised hope among real estate companies that the slowdown in their sales may end sooner than anticipated”.
“The current stability in the country’ political arena is also expected to leave a positive impact on the real estate business,” said Alamgir Shamsul Alamin.
The country’s real estate sector had experienced a boom period in between 2005 and 2012 when Bangladeshi expatriates and upper middle class people thronged for buying flats boosting business of the real estate companies.
Since 2012, the sector has been passing a difficult time leading to deep slump in flat sale. The slump has also affected the backward linkage industries such as cement and steel manufacturing.
“It later entered into a difficult phase as a result of falling income by Bangladeshi expatriates, political uncertainty, a squeeze on bank loans, high interest rate, a bearish stock market, lack of gas connections to new buildings and harassment by government agencies with regard to sources of income of flat and plot buyers,” said Alamgir Shamsul Alamin.
He stated all these factors have hurt the real-estate business leading to a significant drop in flat and property sales.
“The situation seems to be started reversing taking advantage of a congenial business and investment climate coupled with drop in bank interest rate,” said the REHAB President.
When asked, he said, “The government agencies have let off the questioning about the source of income of home buyers following REHAB’s fruitful discussion with the government high-ups. This has created interest among home buyers again”.
The REHAB leader contradicted with the media reports on 8000 unsold flats saying that these numbers are fabricated and far above the ground.
“As my knowledge, no flat or apartment of reputed home builders remained unsold. Flats of little known or non-REHAB member companies might have remained unsold,” he claimed.
He added, “It is hard to ascertain the actual number and it may not be above 3000”.
Alamgir Shamsul Alamin said, “A rebound in the housing sector is visible now and it can boost further if the government extends policy supports”.
The policy supports including formation of a Tk 20,000 fund so that low and middle income people can access loans at a single digit interest rate, cuts in registration fees and income tax.
According to a conservative estimate, the total investment in the real estate sector stands at Tk 80,000 crore.
The sector contributed 15 per cent to Bangladesh’s gross domestic product (GDP) and created 35 lakh jobs.
