- Some 22 lakh families in Dhaka before Covid
- Around 2 lakh left after pandemic
- House rent ads up by 50%
- Many flats yet to get tenants
- Renters shifting to small flats
- Rent reduction not successful
- Landlords in difficulties about repaying bank loans
As with other sectors hard hit by the raging pandemic, landlords who consider their real estate a passive industry are not any less exposed to the crisis. They are facing rent shortfalls and renegotiation as well, but are often unsuccessful in peopling their vacant flats with tenants.
Since the pandemic hit the country early this year, the economy has plunged, resulting in job cuts that left thousands unemployed. The situation forced many to migrate to their ancestral homes, especially in the rural regions.
"Now we are offering a 1,200 square-feet flat for Tk21,000 which was Tk25,000 before Covid-19, but still no one is showing interest in the rental price," said Md Delwar Hossain, manager of Nilufar House, a six-storey building in the capital's Shantinagar.
A joint study by the Power and Participation Centre (PPRC) and Brac reveals that the demand for residential homes has plummeted as a large number of people have left Dhaka for good.
According to the study, made public in August, 15.64% of Dhaka residents returned to their village homes when the shutdown was virtually lifted.
It appears that there is no easy pathway for the house owners and renters to get relief fairly soon.
PPRC and Brac are conducting another study on the present state of house rents, which is supposed to be published in December.
Brac Senior Director KAM Morshed said: "A number of people have started returning to Dhaka, leaving their families behind in the village."
However, he said the demand for rented house is not worth mentionable since most of the city dwellers left the capital during the pandemic.
According to the stakeholders, all those who left Dhaka are yet to return, especially students, since educational institutions remain shut.
Besides, the income loss followed by the pandemic has forced people to shy away from hiring apartments, they said, adding that most tenants opt for small flats.
While taking to various property management companies, The Business Standard came to know that the ratio of house rent ads has increased on their sites compared to what it was before the corona effect.
Mohammad Eusuf, manager (Marketing and Sales) of Bdhousing.com, a property management site, told The Business Standard, "Property rental advertisements shot up by around 65%on our site between February and June this year. Although the trend has been decreasing since July, still it is more than that before the corona."
"The number of advertisements in February was 465, in March 581, in April 863, in May 1478, in June 1,335, in July 1149, in August 721, in September 642 and in October 597," he added.
The Bharatia Parishad, a platform of tenants, claims that around 2 lakh families left Dhaka against the background of Covid-19 till August this year.
"The lower middle class left the city. After they left, the rate of ads for houses rent went up," said Baharane Sultan, president of the organisation.
"Many are yet to get back to the capital, but at present, the number of house rent ads is at a decreasing level," he added.
As renters lose jobs and their economic conditions remain dormant, landlords face tough choices, and so they are in a waiting game.
In Shantinagar residential area on Tuesday, rental advertisements were found on the walls of at least 40 houses.
Three flats are now empty in a residential building called Sufia View of Bhasani Lane in the area, while two other flats in a housing complex have remained vacant for the last two months.
Focusing on Bashundhara residential area, Sadman Sakib, senior consultant of BD Property, a management company, said: "There is a huge number of house rent ads in the posh residential area. The landlords have reduced rent by around Tk6000 to Tk8000 per month, but to no avail."
"We observed that the landlords reduced their house rent by Tk2,000," said Meghla, a customer care executive of Bproperty.com. Similarly, many tenants are now opting to rent small houses, she added.
Urban respondents suffered an income drop by 75% during the shutdown, according to another joint research by PPRC and Brac in April this year.
In the residential buildings, renters are shifting to two-room flats to come to terms with their present state of economy.
Minara Parvin, who moved into a small flat after leaving a big one, said: "My husband works fora private organisation and his salary was slashed by 20%. It is hard for us to bear the rent of a big flat."
Besides, expenditures in Dhaka are on the rise day by day, she added.
According to the Citizen Information Management System of Police, there were around 22 lakh families in Dhaka before Covid. Of them, 2,41,507 were landlords while 18,20,094 were tenants.
While visiting different residential areas in the capital in the last month, The Business Standard found that a lot of notices for dwelling rents were slapped on the walls of the buildings.
In most cases, the landlords fail to get renters even after decreasing the rent.
However, stakeholders opine that the situation is slowly getting better.
Subashis Biswash, president of Tolarbag Apartments and
Flat Owners' Association, said: "There are 672 flats in our areas. The newly built flats struggle to get tenants."
"I am the headmaster of a high school in Mirpur area. I have found that many guardians have left Dhaka with their children."
The landlords who constructed their buildings by taking out bank loans are mostly affected since they hardly get renters in current circumstances.
A residential building owner in Uttara, Wahiduzzaman Pavel, said: "I earned Tk1,30,000 per month before the pandemic. From this, I used to pay Tk66,000 as installment for my bank loan."
"But from March, 50% of the tenants could not pay rent. So, I have failed to meet my loan installment for the past two months. Later I had to borrow money to meet my family expenditure."