The growth rate of the real estate sector of Bangladesh turned out to be much lower when calculated against a more recent base year.
The double-digit growth rate experienced by the sector, over a decade, almost been halved after the base year for calculating GDP was updated from 2005-06 fiscal to the 2015-16 fiscal.
According to updated data by the Bangladesh Bureau of Statistics (BBS), the sector had achieved the highest growth rate of 16.81 percent during the 2016-17 fiscal. However, revising the number has dropped it to just 9.49 percent
The growth rate had been recorded at 10.08 percent a decade ago.
BBS revealed the data on Monday while publishing a report titled "Survey on Occupied Residential Houses and Real Estate Services," at the Parisankhyan Bhaban, Dhaka.
The report said that total value addition in the real estate sector of Bangladesh, including residential and non-residential household services, reached Tk14,15,77 crore in the 2016-17 fiscal, up from Tk12,93,11 crore during the previous fiscal year.
Contribution of the sector to the national GDP (gross domestic product) reached 7.75 percent.
Prior to updating the base year, BBS data found value addition of the real estate sector in 2016-17 fiscal at Tk14,45,39 crore.
BBS Director Zia Uddin said the growth rate had drastically dropped as some subsectors with comparatively higher growth had previously been included in the real estate sector while calculating GDP.
While updating the base year to 2015-16 fiscal, BBS excluded some components that contributed to the growth rate, such as renting of transport equipment, machinery, hardware and software consultancy, and research and development, from the real estate sector.
Real estate businessmen and experts only partially agreed with the new data.
Engineer Anisuzzaman Bhuyan Rana, former secretary general of Real Estate and Housing Association of Bangladesh (REHAB), said business in the housing sector has been going through a downturn for past 10 years.
"Power shortage, hesitation regarding connectivity of natural gas, high interest rates while borrowing from banks, and high property registration cost held the industry back," he said, arguing that immediate measures by the government to reduce interest rates, value added tax, and property registration cost is necessary to ensure housing facility for people of all income levels.
Speaking at the event, Saurendra Nath Chakrabhartty, secretary of Statistics and informatics Division (SID) said BBS is a major partner of the government in terms of development. "The report will be used to formulate and implement policy for the real estate sector," he added.
Quoting the report, Bikash Kishore Das, additional secretary of SID, said rent per square feet of dwelling houses is comparatively lower in larger residences, while rent in smaller houses is higher per square feet, and that in slum areas is even higher – considering the absence of additional facilities.
According to the report, average usable area of dwelling households are 425 square feet, while rent per square feet is comparatively higher than that of in a larger size of flat.
Moreover, annual rent of dwelling houses below 300 square feet stands at about Tk96.1 per square feet, which is Tk50.5 in residences of 300-650 square feet.
About 4.62 million families in Bangladesh – 12.21 percent of total families – are now living in rented houses.
The report also found the real estate sector employs total 1,651,980 people – 539,415 in residential housing, 940,173 non-residential housing, and 172,392 in real estate construction subsectors.
Annual revenue of the entire sector stood at Tk16,25,08 crore, with Tk8,93,74 crore coming from residential housing, Tk5,43,78 crore from non-residential housing, and Tk1,87,56 crore from real estate construction.
Subtracting the cost of repair, wage of labour, intermediate consumption and other costs, total value addition to the sector reaches to Tk12,93,11 crore in 2016-17 fiscal.
Of them, residential housing added value worth Tk7,02,08 crore, non-residential housing added Tk4,49,48 crore, while real estate construction added value worth Tk1,41,55 crore, according to the report.