When the private sector had been struggling due to fall in investment amid high inflation rate thanks to enhanced policy rate aimed at tightening money supply, it forced banks to raise interests leading to credit crunch. So, it is not surprising that the fallout from the overall crisis in the financial sector did also spread to the housing sector of the economy. Notably, according to reports, during the previous financial year (2023-24), the number of fresh applications on building plans seeking approval from the Rajdhani Unnayan Kartripakkha or Rajuk (a statutory government body responsible for initiating and implementing Dhaka metropolitan area's development plans) dropped by 50 per cent. The impact of last year's political changeover on the economy contributed further to reduce investors' confidence in the already stressed housing market. The apex body of the housing sector, the Real Estate and Housing Association of Bangladesh (REHAB) is learnt to have claimed that the crisis has led to a fall in the sale of flats by 50 per cent. The situation in many cases is forcing them to sell flats at prices that are 50 to 60 per cent lower than before.
The real estate operators, too, were not forthcoming with as many building plans for approval from the Rajuk as they would before. Evidently, with the housing sector in the doldrums, it has a ripple effect on some 250 to 300 linkage industries and related businesses which employ thousands of people. The trade in construction materials is equally affected by the downturn in the housing market. In consequence, many of those affected by the crisis in the housing sector, especially developers, are pointing an accusing finger at the Detailed Area Plan (DAP) 2022-2035, which came into effect in August 2022.
As such, all affected parties are demanding the DAP's amendment, some even asking for outright cancellation of the DAP 2022-35. They complain that the builders in most areas of the capital city would be left with drastically reduced (by about 60 per cent) building space to work on. Owners of plots in many areas of the city, on the other hand, have also lost interest in building residential quarters as the height of the buildings has been limited to only four or five storeys, whereas previously they could build as high as eight-storey buildings.
So, they argue, if DAP is amended or cancelled, Rajuk's building plan approval process would be speeded up. At the same time, they also demanded that the authorities concerned should, instead, stick to the Dhaka Metropolitan Building Construction Act 2008 and for approval of the building designs, the masterplan DAP 2010. However, some other stakeholders of the housing sector are against any change in the DAP, let alone its cancellation. They contend that the main part of the city has already become a concrete jungle rendering it practically unliveable. Some urban planners are of the view that the sluggishness in the housing sector should not be entirely blamed on the new DAP. On the contrary, the prevailing political and economic uncertainties have a role to play in this regard. To reduce pressure on the main part of the city, they are in favour of prioritising new housing projects, for instance, Purbachal, Jhilmil, Uttara third phase, etc., and increasing facilities there to encourage construction activities.
A vital sector of the economy, housing provides living quarters for an ever-rising number of citizens and needs government protection for its survival and further growth. Also, the registration fees for purchasing a flat should be rationalised so that people of limited income might be able to own a flat with their life savings.
