Housing sector needs investment, policy support: experts

Despite huge potential, the housing sector is not growing, lacking proper funding and timely government policies, experts have observed.

The government should prioritise this sector and make housing affordable for middle and low income groups through policy development and adequate funding, they said during a virtual roundtable talk organised on Monday by the Policy Research Institute of Bangladesh (PRI).

Developing the sector will in turn contribute to the country's GDP, industry leaders said at the event,  "Affordable Housing Finance- Part 1" - IFC's Housing Roundtable Series: Rebuilding the Economy post-COVID through Housing Finance and Construction."

Thierno Habib Hann, Global Housing Finance and Capital Markets- Asia Pacific Lead of the International Finance Corporation, presented the event's keynote speech, where Ahmed Jamal, deputy governor of Bangladesh Bank was the chief guest.

PRI Executive Director Dr Ahsan H Mansur said, "Government's allocation and investment in this sector is very little. Most countries, including neighbouring India, consider Housing as the 3rd sector, which is 14th in Bangladesh."

He also said, "Some 30% of the total population lives in urban areas. But, housing for not even 50% of these people has been ensured. The pay policy of the government in this regard is very poor and banks do not provide enough loans for this sector."

The government, in particular the Bangladesh Bank, should decide on increasing investment in this sector.

Nasimul Baten, CEO Delta BRAC Housing Finance Corporation Ltd, said, "Land price in Bangladesh is way too high. Although banks and non-banking financial institutions provide loans in this sector, it is very difficult to recover these loans. The fee for land and flat registration is set too high and therefore, the housing sector is a challenging one."

Syed Javed Noor, DMD IDLC Finance Ltd, said, "Investment of financial institutions in this sector is gradually increasing. With some initiatives from the government, it will be possible to take this sector forward."

Asif Iqbal, CEO Building Technology & Ideas Ltd, said, "After agriculture and the ready-made garments sector, the housing sector is considered as one of the leading sectors that creates employment. This sector's contribution to the GDP is 12-15%."

According to a Bangladesh Bank projection, the demand for financing in the housing sector in  fiscal year 2019-20 was one and a half lakh crore. In fiscal 2020-21, this demand has increased another Tk5,000 crores.

This sector can be further developed if the government is considerate of real estate businessmen.

The keynote address said the 11 goals set out in the UN Sustainable Development Goals include providing adequate, safe, and affordable housing for all by 2030, emphasising the development of basic management and the improvement of slums. The goals also call for inclusive, safe, liveable, and sustainable production infrastructure.

The provision of quality housing for all citizens is one of the constitutional responsibilities of the state for the purpose of material development and cultural growth of the masses through planned economic development, it added.

Dr Ahsan H Mansur moderated the event attended by Mohammad Rezaul Karim, executive director, Securities and Exchange Commission; Mofiz Uddin Ahmed, additional secretary, Financial Institutions Division, Ministry of Finance; Selim RF Hussain, managing director & CEO BRAC Bank Limited; Ehsanul Azim, principal investment officer, Financial Institution Group, International Finance Corporation.