The US-Bangla Assets recently began offering housing plots from a minimum of Tk25 lakh to a maximum of Tk52 lakh per katha in Purbachal, a new suburb 18 kilometres northeast of Dhaka city.
The size of each plot ranges from 3 katha to a highest of 1 bigha. The pricing strategy shows that their target is high-end customers.
The housing company developed the project with 20,000 plots, all targeting upper-class customers.
In the first four days of the five-day fair of the Real Estate and Housing Association of Bangladesh (REHAB), the US-Bangla Assets received good response from customers as they got 35 bookings already.
Talking to The Business Standard on the fair premises, MI Moeen, senior manager of US-Bangla Assets, said customer response shows that people have money in hand.
The minimum price of the plots was around Tk9 lakh in the pre-pandemic time and now it has increased almost three times, while sales have also increased, he said.
Even with increasing prices, the demand for luxurious housing plots and flats are rising. People are interested in investing in housing projects in the suburbs, due to those having all kinds of luxurious lifestyle facilities including greenery, lake views, parks, schools, colleges, hospitals and supermarkets, he said.
Most of the other real estate companies are also undertaking housing projects targeting rich clientele. The concepts for luxury housing are now penthouse, specially-designed apartments with expensive amenities and duplex flats. Newly-growing suburban towns in the outskirts of Dhaka, like Uttara and Purbachal, are main attractions for buyers of lavish houses.
Moreover, Gulshan, Banani, Baridhara and Dhanmondi remain top choices for the upper class.
At the REHAB fair, Rupayan, another real estate company, came up with apartments catering to those in the high-income bracket.
The size of the apartments in the project located in the Uttara is a minimum of 2,000 square feet to a maximum of 8,000 sq-ft, with price tags ranging from Tk11,800 to Tk17,000 per sq-ft.
Bayezid Hassan, assistant manager of Rupayan, said that the Uttara project was built on 144 bighas of land, with high-income groups in mind.
He added that although apartment prices increased by around Tk3,000 per sq-ft after the pandemic, demand was still high and customer response at the fair was quite good.
Navana Real Estate was also showcasing their new housing project in the Gulshan area at the fair. The apartments ranged between 4,000-5,000 sq-ft, with minimum sq-ft price set at Tk30,000.
Talking to TBS at the Navana stall at the fair, Rashidul Islam said the housing business was doing very well after the pandemic as people had amassed huge savings which they wanted to invest in assets.
Furthermore, the number of millionaires increased during the pandemic.
Some 13,881 people have entered the list of accounts having deposits of above Tk1 crore in Bangladesh in one year from June 2020 to June 2021 despite the pandemic, according to the Bangladesh Bank data.
After June last year, the number of bank accounts with deposits above Tk1 crore was 86,037, with the number rising to 99,918 in the current year.
How low cost financing fuelled housing prices
Rise of construction material was the major reason for the price hike of ready flats as developers had to adjust costs. On top of that, availability of money in customers' hands after the pandemic fueled housing prices, said industry insiders.
Lenders are also offering 7.5% house financing, the lowest in recent history, alluring customers to buy flats.
Mohammad Farhaduzzaman, general manager of Eastern Housing, said that investment opportunities had reduced due to the pandemic. Banks are offering low interest rates against deposits. Additionally, allowing black money to be invested in flats increased fund flow in the housing sector.
Though demand increased, supply was not quick to catch up as real estate companies were slow in taking on new projects during the pandemic. Housing companies had adopted a wait-and-see policy for the new DAP (Detailed Area Plan) as it will have much impact on the housing businesses.
Amid this high demand and low supply, flat prices have increased, he added.
Flat prices surged by at least Tk500 to Tk1,000 per square feet for small-sized apartments after the pandemic, said Md Shafiqur Rahman Sobuj, deputy manager of Cube holdings.
His company is offering apartments of 2,000 to 2,500 sq-ft in Bashundhara area at a minimum price of Tk 9,000 to a highest of Tk12,500 per sq-ft.