The real estate sector is currently facing stagnation, with significant declines in flat and plot sales, as well as a drop in new investments. In this interview, Liaquat Ali Bhuiyan, Senior Vice-President of the Real Estate & Housing Association of Bangladesh (REHAB) and Chairman of Brick Works Ltd, discusses the state of the housing sector with Sajib Ahmed.
Q: How is the real estate sector coping amid the ongoing economic stagnation?
Liaquat Ali: The real estate sector has been in crisis since the political shift in the country. One of the biggest challenges we are currently facing is the Detailed Area Plan (DAP) introduced by RAJUK. For the past six months, we've been working to resolve the issues surrounding it. Due to DAP, many developers are not proceeding with plan approvals, which is causing harm to the sector.
At the same time, the prices of key construction materials—rod and cement—have risen significantly, increasing overall construction costs. However, this year’s budget brings some relief as registration fees for flats and land have been slightly reduced. I would like to thank the interim government for this move.
Q: What is the condition of the allied industries connected to the housing sector?
A: These industries survive because of the real estate sector. When real estate slows down, so do they. Real estate plays a vital role in the national economy—not just in Bangladesh, but in every country. It contributes significantly to GDP.
Q: What will be the impact if new investments do not come into the housing sector?
A: Currently, around 3.5 to 4 million workers are employed in this sector. Without new investments, many of them will face unemployment. The real estate sector is one of the few where there is no labour unrest, because developers do not treat workers in ways that cause dissatisfaction. The sector also plays a major role in addressing the country’s unemployment challenges.
Q: By how much have flat and plot sales, and new construction, declined?
A: Compared to normal times, flat and plot sales have dropped by up to 40%. This has created additional pressure on developers, leading to financial losses. Nevertheless, real estate entrepreneurs are continuing to repay their bank loans on time. Developers in this sector are not known for defaulting on loans. But if the downturn continues, unemployment will inevitably rise, as no one will be willing to invest in new projects.
Q: What role can the government play to help the sector recover?
A: The DAP issue must be resolved swiftly. If the government reduces import duties on the raw materials for rod and cement, prices will come down. At the same time, I urge the government to keep bank loan interest rates in the single digits to help developers stay afloat.
Q: Are developers considering new plans under the current circumstances?
A: Until the DAP is revised, developers are not interested in moving forward with new plans. As a result, new investment is not coming into the sector—and there’s no telling when that might change.
Source: Kaler Kantho
Bd-pratidin English/Lutful Hoque
