Supply of new real estate in the capital city is expected to decrease in the coming days, as the number of applications for the approval of new buildings' plan from the RAJUK has been showing a declining trend in recent years.
The country's challenging economic situation, higher living costs, political uncertainty and impact of new Detailed Area Plan (DAP) 2022-2035 are responsible for this decline, stakeholders have said.
According to them, such a trend may result in limited supply of housing and commercial units in Dhaka causing higher rental costs as well as broader economic impacts on the linkage industry and home loan providers.
Entities involved in the construction of new buildings have to get the building plans approved by the Rajdhani Unnayan Kartripakkha (RAJUK), a public agency responsible for coordinating urban development in the capital city and neighbouring areas.
RAJUK'S jurisdiction-divided in eight zones-entails a huge area of 1,528 square kilometres in and around Dhaka including Savar, Uttara, Purbachal New Town, Aftab Nagar, Demra, Fotulla and Keraniganj.
According to data available with the RAJUK, the number of applications dropped by almost 50 per cent in the last fiscal year (FY) 2023-24 to only 4,695 which was 9,339 in the previous FY (2022-23). The number of applications was 10,812 in the FY 2020-2021 and 11,706 in the following fiscal year.
The declining trend for the last two years is mainly attributed to new DAP 2022-2035 which came into effect in August 2022. The latest DAP restricts the height of a new building based on several criteria including location of the plot and the width of a road next to it.
RAJUK officials have said many landowners are waiting for an amendment to the DAP which will allow more floor area ratio (FAR) for new buildings.
Different stakeholders, including Real Estate & Housing Association of Bangladesh (REHAB), platforms of landowners, planners and architects have taken contradictory stance favouring and opposing the DAP.
REHAB Senior Vice-President Liakat Ali Bhuiyan said: "The new DAP is solely responsible for the decline. Unless the DAP is amended, it will create a huge impact on housing supply in the capital city."
When contacted, REHAB Vice-President Abdul Latif said the impact of the lower trend will be visible in the coming years.
"Further analysis of data will reveal that only a handful of the applications for new buildings have been submitted for the main part of Dhaka," he said, adding that the distant regions are still unpopular as they lack all necessary facilities.
The sluggishness in the real estate sector will impact not only affordable housing but also the overall economy as a plethora of other sectors are linked to it, said Mr Latif, adding that an impact on the country's economy is already evident as linkage industries have slowed down.
A large volume of bank loans go to the housing sector that is also affected due to the limited supply of housing products, observed by the REHAB leader.
He underscored the need for enhancing facilities in areas like Purbachal and other new housing projects around the city. "But if it is done forcibly, it will create a negative impact," he said.
Urban planner Dr. Adil Mohammed Khan said the declining trend results not only from new DAP, but also from other factors, including the economic situations.
Underscoring the need for easing the pressure on the main part of Dhaka-already ranked as the least liveable city, he said it's high time they raised the question why Purbachal is not being prioritised for the construction of new buildings.
"We need to discuss why new buildings are not being erected in Purbachal, Jhilmil and Uttara third phase, as well as what needs to be done in this regard, " said Mr Khan, who is also the president of Bangladesh Institute of Planners (BIP).
"If you continue to build more structures in a city like Dhaka, its situation will be exacerbated," he said.
Responding to a query about the move to amend the DAP, Mr Khan said any intervention or influence from vested interests to change the planning is unexpected.
Now it has been imperative to follow proper urban planning to uphold the city's position considering the future of the city.
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