The demand for aesthetic flats at mid-range prices is witnessing significant growth across several cities in the country, especially the capital. Developers specialising in such apartments have noted that this surge in demand can be attributed to the growing preference of sophisticated buyers who are now opting for apartments that align with contemporary aesthetics.
Buyers emphasise that by slightly increasing their investment compared to an ordinary apartment, they can acquire a residence that is more beautiful.
According to buyers, acquiring an ordinary flat in the capital now requires an investment ranging from Tk50 lakh to Tk1 crore. However, by making a slightly higher investment, one can purchase a flat that comes with modern amenities and features.
Surging demand for mid-range flats
A recent report published by Bproperty, an online marketplace facilitating property transactions and rentals, indicates an unprecedented surge in the demand for mid-range flats. These flats typically command market prices ranging from Tk80 lakh to Tk1.5 crore.
The demand for mid-range flats is underscored by Bproperty's data, which reveals that a substantial proportion of new flat sales recorded on its platform last year were mid-range flats.
According to the data, 79% out of 199 flats in the capital's Bashundhara R/A, 57% out of 457 in Uttara, 18% out of 345 in Mirpur, 53% out of 411 in Dhanmondi, 29% out of 291 in Mohammadpur, 47% out of 48 in Banasree, 67% out of 48 in Aftab Nagar, and 59% out of 95 in Gulshan-Banani were mid-range flats.
What to expect in mid-range flats
Bproperty's survey data highlights that mid-range flats typically span between 1,200 to 1,500 square feet and are generally designed with three bedrooms, two or three bathrooms, and two balconies.
These flats are optimally suited to comfortably accommodate families of five or six individuals. Furthermore, mid-range flat buildings are equipped with elevator facilities for added convenience. Notably, contemporary interior design has emerged as a prevalent theme within these flats, enhancing their appeal.
Why are people buying these flats?
Real Estate and Housing Association of Bangladesh (REHAB) Director Naimul Hassan told The Business Standard that not all classes of people have the ability to buy flats. The majority of those who buy flats in the capital or any other city belong to the middle and upper classes. Even among the middle class, those who are fairly affluent are buying these mid-range flats.
He said in terms of demand, the mid-range housing market trend in 2022 is similar to last year. Although people tended to buy houses in more affordable areas of Dhaka (like Mirpur, Aftabnagar, Mohammadpur, etc.), three-bedroom apartments were in high demand for most people.
Improved affordability has been a major factor behind buying mid-range flats. Whereas the average square feet price of an ordinary flat is Tk5,000 to Tk7,000, which is similar to an apartment cost in affordable areas like Mirpur, Aftabnagar and Mohammadpur, in prime areas like Banani, Dhanmondi, Bashundhara R/A and Uttara, the average square feet price of these mid-range flats fall in the range of Tk8,000 to Tk13,000, which is much higher than the affordable areas.
Medical equipment businessman Shah Jamal Jony bought a 1,420 square feet flat in Jhilik Housing's Rupshi-1 project in West Badda area, east of Gulshan-1, early last year.
He told TBS that this flat was purchased for Tk1.2 crore. According to him, the environment of this area is quite calm. The developer has designed a good quality interior in the three-bedroom flat.
"My plan was to buy a flat between Tk60 to Tk80 lakh. But because there are more family members, I bought this flat for Tk1.2 crore," he said.
Financing still a challenge
Although many customers are interested in buying mid-range flats, difficult loan conditions from banks and financial institutions are a hindrance, say housing experts.
Real Estate and Housing Association of Bangladesh (REHAB) President Alamgir Shamsul Alamin (Kajal) told TBS that the demand to buy mid-range aesthetic flats in our country will increase if bank loan conditions are eased.
Stakeholders said the government should introduce a more rational home loan system following the pattern of India and other developed countries. At present, Bangladesh House Building Finance Corporation is the only government institution that provides home loans in the country. The institution charges an interest rate of 8-9%, with a maximum loan amount of Tk2 crore with a repayment period of 5-25 years.
Private banks and non-bank financial institutions offer home loans at 8.99-15% and 8-8.5% interest, respectively. Comparatively, home loans in India are more affordable, with interest rates ranging from 6-8% for government-affiliated institutions and 6.7-8.05% for private banks and non-bank financial institutions.