Despite having a favourable environment, the country's construction industry could not make a turnaround to its previous state even in a year and is still struggling.
Prices of all construction materials remained within people's purchasing capacity for a long period and low-cost financing was also available but their sales are continuing to see a bearish trend.
However, Real Estate and Housing Association of Bangladesh (REHAB) vice president Liakat Ali Bhuiyan said sales of flats and plots are increasing slightly.
Some businessmen have blamed siphoning off of a significant amount of money from Bangladesh for low investment in construction and real estate sector.
According to the central bank data, presently the average rate of interest of bank loans for housing sector hovers between 9.0 per cent and 16 per cent. The weighted average rate of interest for loans for apartment purchase is 9.93 per cent. Besides, good borrowers are given 10 per cent rebate on interest rate of loans.
According to officials, the government late last year introduced housing loans for non-resident Bangladeshis and migrant workers on 50-50 ratio to inject fund flow into the sector. Besides, the banks are allowed to provide as high as Tk 1.20 billion as loans for housing under consumer financing schemes.
However, despite favourable measures, sales of plots and apartments are yet to see any mentionable growth.
Talking to manufacturers and sellers of construction materials, it was found that presently only contractors of government-funded development projects are their main customers. Besides, a small portion of the items also goes to rural areas where individuals construct their own homes.
While visiting the city's Mirpur, Uttara, Gulshan, Badda, Rampura, and Malibagh areas, it was found that very few buildings are under construction and there is hardly any plot with new signboards announcing construction of flats.
Rafiq Mahmud, owner of Rafiq Traders in the city's Badda area, who mainly sells cement, told the FE that prices of different brands of the item went down by Tk 40 per bag in last six months. Per bag of cement of different brands is now selling between Tk 410 and Tk 460 which were nearly Tk 500 months back.
Asked about the reason behind the price cut, he said the sale of cement declined significantly as the construction of apartment buildings by individuals and real estate companies is now at low ebb.
"I don't know the exact reasons behind it, but it seems that people have no money in hand. Some real estate companies in my areas have stopped construction of buildings failing to get customers," he said.
Rasel Mia, manager of Anower Enterprise in the city's Gabtoli area, told the FE that both price and sale of bricks have remained unchanged this year as it was in the past.
He said demand for construction item from the private sector has decreased but the same has gone up from the public sector development projects, meeting the gap.
According to him, brick prices remained steady in last one year and each 1,000 pieces of grade-1 brick now costs between Tk 7,500 and Tk 8,000.
On the other hand, a truck of sand, according to Masum Mia, manager of 'Ma Enterprise' at Gabtali area, is being sold at prices ranging between Tk 1200 and Tk 1500. He said sand prices remained stable during the last two years.
Meanwhile, prices of iron rod remained static during the last two years when per tonne of 60- grade iron rod was selling at Tk 45,000.
Two weeks back, the rod manufacturers have raised the price by Tk 7,000 and now per tonne of the item is being sold at Tk 52,000.
However, according to Al Amin, a manager of Janani Traders in the city's North Badda area, sales of iron rod did not see any change despite the price hike.   Â
President of the Bangladesh Auto Re-Rolling & Steel Mills Association Masudul Alam Masud told the FE that global price of raw materials has increased by 30 per cent which has forced them to raise iron rod price.
He said MS (mild steel) rod saw price fell during the last two years and the millers have incurred sizable losses during the period.When asked about the reasons behind construction sector's failure to gain buoyancy, Mr Masud said in the past individuals have been buying flats and plots but now they are siphoning off money abroad for their safety.
He said during 2007-08 emergency period, many people who owned flats and apartments had lost their ownership. "So, the rich people now buy apartments in Dubai, Singapore, Malaysia and many other cities instead of buying locally. As a result, the housing sector remained at static position for long."
REHAB vice president Mr Bhuiyan said sales of flats and apartments have, however, slightly increased in the recent past.
Replying to a query he said during the last couple of years, many unscrupulous businessmen had invested in this sector leading to a boom. "But many of them have left the sector after wasting their capital failing to make good business or cheating the customers."
He was hopeful that the apartment business would regain its position again in the near future.
syful-islam@outlook.com
srabonty.shokal@gamil.com