It seems that the bad days for realtors is over. After the slump in 2013, apartment sales went up last year and is still going strong at over 16%.
Apart from the construction of many new and modern apartments and commercial buildings in Dhaka, there are also numerous housing developments on Dhaka's outskirts. And new designs and ideas are adding to the appeal of those well-planned housing projects.
Businesses in the housing sector said a new window of opportunity has opened up riding on a rise in middle-class people, a reduction in land registration fees, bank loans on easy terms, home loans for government employees and allowing investment of undisclosed money.
The sale of flats has increased by 20 percent in the current year, they added.
"After 2013, the price of flats did not rise much. From 2013 to 2017, the sale of flats saw a drastic fall. As a result, a large number of ready flats remained unsold. But for the last two years, things have been changing gradually," said Alamgir Shamsul Alamin, president of the Real Estate and Housing Association of Bangladesh (Rehab).
"Rehab members are struggling to even sell 20-25 thousand flats, but in the capital alone there is a demand for 120,000 apartments at present," he said, adding that this sector will develop even further if the flat registration fee and stamp duty are decreased, and the bank loan system is eased.
This year, Innstar Ltd, a builder of modern and luxury apartments, has sold more apartments than in the last five years. It has sold-out all its apartments that are still under construction, and is taking orders for new projects. The company registered 20 percent growth in sales this year.
"Over the last two years, Innstar's products have become more desirable because of their unique, smart and green designs, and good locations. This year, the demand for our flats has gone up all the more," Arman Haque, chairman of Innstar Ltd, told The Business Standard.
Another real-estate developer, Concord, was established in 1973. Its luxury, medium-sizes apartments are also very popular. It is also known for having taken on numerous big projects, but even this company faced a tough time from 2013 to 2017.
But since 2018 the company has been turning around and it has taken up new projects.
A senior official of Concord, Tarequl Alam, said, "Our business grew by around 16 percent in 2018. At the end of this year, it will see more growth because people can now invest undisclosed money in this sector."
There has also been significant growth in the business of Navana Real Estate, a big name in the real estate sector. Its sales in the Aftabnagar, Rampura and Baridhara regions rose by more than 20 percent.
The deputy manager of Navana Real Estate, Hasibur Rahman, said, "The demand for flats worth around Tk1 crore has gone up at the Aftabnagar, Rampura and Baridhara projects. Buyers are also going for new luxury flats. Many others are booking apartments in the upcoming projects in Gulshan and Banani."
Eastern Hosing, Dom-Inno, Rangs, Borak, Sheltech and other big names in the real estate sector also acknowledged business growth.
They said if the land registration fee is lowered further and the bank loan limit is increased, there will be a boom again in the housing sector.
Rehab says the real estate business started to expand in the country after the 1990s. Huge investments were made in this sector till 2010. The market size surpassed Tk50,000 crore that time. But the sector saw a fall because of overinvestment, share market crash and political instability till 2017.
Industry insiders say that business has been improving since 2017.
Areas where flats sell the most
The housing business is mainly centred in Dhaka, but is picking up in Chattogram, Sylhet, Rajshahi, Khulna, Cumilla, Mymensingh and Khulna. However, it is still poor in other towns.
According to Bikroy.com and Bproperty, two online markets for buying and selling flats, the maximum demand for flats is in the Bashundhara residential area. Around 26 percent of buyers look for flats in Bashundhara. The second highest, 18 percent buyers, are keen to buy flats in Mirpur.
Flats are also in demand in the Gulshan, Banani, Dhanmondi, Baridhara, Lalmatia, Mohammadpur, Uttara, Shiddeswari, Shantinagar, Aftabnagar, Kalabagan and Eskaton areas of the capital.
Why are investors in housing projects dreaming big?
The government is offering home loans to 21 lakh government employees at five percent interest. Some banks and financial institutions are giving home loans for less than 10 percent interest. The National Board of Revenue has also opened the opportunity to buy flats with undisclosed money.
Entrepreneurs in the sector attribute the present growth to those moves.
Kamal Mahmud, the vice-president of Rehab, thinks an increase in the number of middle-class families, coupled with the gradual rise in the population of towns, will play an important role in helping to boost the real estate sector.
"Every year around six lakh people move to Dhaka. If we compare the demand for apartments with the increasing urban population, Dhaka needs 1.20 lakh apartments each year," Kamal told The Business Standard.
The demand for flats in various towns outside the capital is also on the rise, he added.
Businesspeople want more opportunities
Businessmen say that they need to spend a lot of money for land registration and other purposes. They want the interest rates for bank loan to be lowered.
Liakat Hossain Bhuiyan, first vice-president of Rehab, said, "To bring back the good days in the housing sector, the land registration fee has to be lowered to 6-7 percent from the existing 16 percent. This will reduce the financial pressure on people of the middle class, and many will be able to buy flats."
"If they get home loans at 5-7 percent interest with a tenure of 20-25 years, they will be able to buy flats easily with the house rent they pay monthly. Such a facility is available in many countries."