Flat sale drops by 30pc in last few months

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Jasim Uddin Haroon Sales of apartments have dropped by 30 per cent on an average during the last few months, as the purchasers are delaying or postponing their decision of buying a dream home, REHAB statistics said. The leading realtors, stunned by the fall in sales, said squeezing in bank financing and stock market debacle are the main reasons behind the present fall in sale of residential properties in the city. They also said clients, who earlier signed contracts to buy flats, are also making delays in paying installments, leading to a slump in the real estate sector. Declining trend in flat sale has also caused a waning trend in sale of building materials, like mild-steel rod, cement, and brick etc, manufacturers of these items said. Tanveerul Haque Probal, managing director of Building for Future, a leading developer, told the FE: "My sales have dropped by more than 30 per cent during the recent months, although this is the peak season for property sale." Mr Probal also said the would-be buyers lack solvency to buy new apartments in the city. Toufic M Seraj, managing director of Sheltech, one of the oldest real estate companies, said many potential expatriate buyers have postponed their decision to buy flats, following economic turmoil in the US and Europe. "Expatriates are an important buying group, but economic downturn in the developing world has been affecting our business," Mr Toufique told the FE. A K Chowdhury, managing director of Airbell, said: "Bank funding for purchasing flats has been squeezed in recent times, and that's the major reason behind the present situation." Mr Chowdhury said: "Earlier banks used to fund almost cent per cent of the total flat price. This facility is not available now, leading to a massive plunge in apartment sale." Flat sale in the country hit the rock bottom in 2007, when a nationwide crackdown on corruption saw sale of only about 3,000 flats, against the average sale of 7,000-8,000 flats during the previous few years. Meanwhile, market watchers said steep rise in flat prices is also hindering their sales. The average price of apartment in prime locations in the city is now over Tk 10,000 per square feet (sft). The prices of apartment in posh areas like Dhanmondi, Gulshan and Banani range between Tk 15,000 and Tk 16,000 per sft. Flat prices in Mirpur, Mohammadpur and Shamoli areas range from Tk 6,000 to Tk 8,000 per sft, whereas prices in Segunbaghicha and adjacent areas range between Tk 7,000 and Tk 8,000 per sft. REHAB (Real Estate and Housing Association of Bangladesh), the organisation of 1,000 developers, said a medium-sized company sells 12-14 flats per month on an average. REHAB sources said RAJUK is going to enforce height restriction in some areas like Dhanmondi, Gulshan, Banani and Baridhara etc, adding: "It is forcing us to increase apartment prices in the areas." Mr Toufique said this is totally contradictory with the Dhaka Metropolitan Building Construction Rules, 2008. Besides, local steel and cement manufacturers are also frustrated over the low demand for their produces. Aameir Alihussain, a director of BSRM Group, said: "Presently, our sale of rod is much below than the expectation." Mr Aameir said: "This is the peak time, but we don't get its reflection in our sales. Besides, construction in the public sector has also decreased." He, however, hinted that the market may rebound after the Eid-ul-Azha. Md Jahangir Alam, chairman of M I Cement, told the FE: "Demand for cement is also much lower than the expectation." The housing and its allied sectors are contributing around 10 per cent to the country's GDP (gross domestic product).