The country's real estate sector is still bearing the brunt of sluggish sales despite an improvement in the political situation for the past few months, industry insiders said.
The continued downtrend in sales has severely affected both the realtors as well as the employees. Many developers are leaving the business, while many are not being able to pay salary or cutting down the number of staffs.
The sluggishness in the real estate sector is apparently creating multiple impacts on the overall economy. Various professional firms, labourers and suppliers connected with the sector are facing serious problems with their livelihood. Besides, the government is also deprived of revenue from registration fee, they added.
Unemployment has become high in the sector. According to unofficial estimates, about 0.25 million skilled and semi-skilled part-time labourers and a number of unskilled labourers have lost their jobs, as the housing companies have either stopped construction of their projects or slowed the pace of construction. Many realtors cannot pay their suppliers, while many consulting or construction firms are financially in a difficult situation.
The industry leaders have sought immediate intervention of the government to save the sector from further disaster. They suggested offering bank loans to the middle-income group of people at single-digit interest rate and longer repayment schedule so that people feel encouraged to buy new apartments.
They said the government must take pragmatic steps to save the real estate sector including declaration of the sector as an industry, rescheduling of the developers' loan, granting it the tax holiday.
"We are missing both revenue and unit sales target for the last three months. Besides, cancellation rate of previously-booked apartments is now the highest in recent times," Toufiq M Seraj, managing director of one of the country's leading realtor -- Sheltech Pvt Ltd, told the FE recently.
Mostly the business people are cancelling booking, as their business is not running well enough to pay apartment instalments.
Mr Seraj also said their annual sale has dropped by 50 per cent. His company is using half of its capacity, as it is not taking up any new project. Besides, the builder has stopped hiring fresh executives and is now employing half of the labourers for projects.
The realtors are offering the lowest-ever prices to clear their backlog and roll their investment, but there is no positive response from the buyers.
The buyers are still uncertain about the country's overall economy or afraid of harassments by the National Board of Revenue (NBR) or are expecting that flat prices will come down further.
Echoing Mr Seraj, Real Estate and Housing Association of Bangladesh (REHAB) president Mukarram Hussain said national economy slowed down since mid-2013, and real estate sector is not out of that trend.
"We have around 12,000 semi-finished units unsold across the country."
Regarding REHAB's claim of the number of unsold unit as more than 22,000, he said it includes a number of projects which have just started or whose plans have been approved but construction work is yet to be started.
The Capita Group chairman also said the major portion of apartment buyers are job holders and business people, having a monthly income of Tk 50,000 to Tk 0.1 million. The realtors mainly target this group by constructing 1,000-1,200 sqft apartments.
"This group is not interested to buy apartments right now, as they are afraid of investing their money. Getting bank loan has also become difficult, home loan interest rates are high, and the ratio of loan has been changed to 30:70 from the previous 70:30," he added.
Team leader of marketing and sales of Amin Mohammad Foundation Mohammad Rabiul Islam said the overall economy has not yet recovered from the recent slowdown.
Besides, the real estate sector has been in a critical condition during the last 4/5 years, since the government stopped giving new gas connections to apartment projects.
"We have lost a significant investment from share market investors and non-resident Bangladeshis (NRBs), as the NRBs are uncertain to invest here now," he concluded.
