Kazi Zahidul Hasan :
Real estate companies are passing a hard time as sales of flats and apartments continue to decline for the last couple of years taking a heat of unfavorable business climate in the country, insiders said.
They said a downtrend in real estate and housing business started by the end of 2009 with effects of stock market crash, non-availability of utility connections and bank’s apathy in investing housing projects. Afterward, investment inflow into real estate sector dropped significantly plunging the promising sector into deep trouble.
“The economy lost its momentum following various internal and external factors leading to a gloomy business situation. It also weakened the buyers’ interest resulting drop in their sales,” Mahmudul Hasan, former Secretary General of Real Estate and Housing Association of Bangladesh (REHAB) told The New Nation on Wednesday.
He said most of the housing companies are facing cash crunch due to poor sales turnover forcing them to abandon new projects. “Many of the reputed housing companies are offering price cut (10 to 15 per cent) to attract the buyers. As far as I know, this is yet to yield any positive impact on their sales,” he added. “Home prices are likely to drop further in coming months as developers need to offer deeper price cuts to attract buyers to release their inventory,” he added.
Flat sales by the companies dropped 21 per cent this year over that of the previous year, creating cash crunch to them. The total number of flats sold by the companies reached 1477 this year while it was 1893 last year, according to a report of REHAB.
It said there are about 10,600 ready flats remained unsold while the number was 4,224 last year, showing a year-on-year rise of 250 per cent. In 2012, a total of 3,584 flats remained unsold. REHAB prepared the report assessing the overall business activities of its 187 members.
These 187 companies have altogether handed over a total of 6,037 flats in the last three years.
This year, they handed over 1,717 flats until October this year. Besides, the companies handed over 2,253 and 2,067 flats in 2013.
Mahmudul Hasan, also the Managing Director of Hasan and Associates Ltd (HAL), said the number of unsold flats is rising significantly every year deepening the crisis further for the sector. If such a situation prevails for a long time, it will leave a disastrous impact on the national economy because the sector is contributing about 12-15 per cent to the gross domestic product (GDP), he said.
It generates 2.5 million employments directly and indirectly. The sector also stimulates demand for over 250 ancilliary industries, including steel, cement, tiles and sanitary ware, cable and electric ware, paint, glass and aluminum, brick and building materials.
He, however, urged the authorities of the banks to come forward by extending lending facilities to the realtors and home buyers to improve their business as well as save the sector from disaster.
