Sales of ready flats decline by 50pc

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Refayet Ullah Mirdha
The once booming real estate sector of the country is facing a decline in its growth over the last one year, following erosion of confidence among buyers, price-hike of raw materials and escalation of land price.
Market operators said the growth performance of this sector declined to 5.0 per cent over the last one year against its previous level of above 10 per cent for several years.
Business insiders said the number of ready flats on sale has increased, but the sales volume of such flats and apartments slumped 50 per cent in the past year.
"Normally we (the developers) combinedly used to construct 5000-6000 flats in a year. But during the last year it declined by 50 per cent," said general secretary of the Real Estate and Housing Association of Bangladesh (REHAB) Tanveerul Haque Probal Tuesday.
He said it is a matter of hope that confidence was being gradually restored among the businessmen and buyers after the shockwave experienced last year.
He said the prices of ready flats and apartments have increased more than 70 per cent in the last year and in some posh areas like Gulshan and Dhanmondi the prices have increased by over 100 per cent.
Talking to the FE, Probal said, the number of local customers have recently declined significantly due to domestic political development.
"Most of the developers are now dependent on non-resident Bangladeshis (NRBs) clients due to decline in number of local customers," Probal said.
He said 48 local developing companies under the REHAB umbrella have participated in New York fair held between October 19 and 21 where they received a substantial number of orders.
He said the week-long REHAB Fair 2007 is scheduled to commence November 20 to exhibit different products at the city's Sheraton Hotel.
He urged the government to take time-befitting plans for building construction in district towns as there is a chance of unplanned urbanisation in those areas.
Recently, people are choosing their home district towns to build their abode instead of the metropolitan cities, Probal said adding that a lot of modern structures have already been developed in Faridpur, Jessore, Comilla, Sylhet and Rajshahi districts by the developers.
"The overall sales growth in the real estate sector declined in the last year. As a result, Sheltech also was not different. But, the number of those customers who buy houses with loans from non-banking financial institutions (NBFIs) has been increasing," said senior manager of marketing division Mushfiqur Rahman Khan of the Sheltech, country's one of the leading developers.
On the other hand, sources in the NBFIs like DBH, National Housing and House Building Finance Corporation (HBFC) said the amount of loan disbursement for housing maintained a steady growth over the past year.
When asked, a REHAB official said over the last one year, new investment in this sector had slowed down as buyers have become cautious following the government's anti-corruption drive.
He said currently, the total amount of investment in the country's real estate sector is around Tk 60.00 billion having 322 members as of June 2007.
He said the REHAB members contribute Tk 1.0 billion to the public exchequer as revenue in a year. He said the contribution to GDP by the REHAB members ranges between 14 per cent and 15 per cent, he added.