Predicaments aplenty in construction industry
Sunday, 27 July 2008
Who does not know that the country's housing sector has been going through a difficult time for quite sometime? It is nothing unusual for a sector to go through a tough patch at some point of time. But the problem in case of the housing sector is that the situation is getting worse and unusually prolonged, hurting all the stakeholders in the sector, including home builders, buyers and hundreds of thousands construction workers. The construction sector suffered the first jolt about three years back when the prices of mild steel (MS) rod recorded a sudden and big jump. Belying expectations of many, the prices of steel products are still rising, shattering the dream of thousands to own a home of their own and giving rise to all sorts of problems in the sector that plays an important role in the economy, particularly in terms of its labour absorption capacity.
Allegation about the delay in handing over flats or apartments to their clients by the home-builders is nothing new. But the rate of such allegation, according to a report published in this daily last Saturday, has risen abnormally in recent days. The report claimed that nearly 50 per cent of the buyers were not getting delivery of their flats/ apartments in time, leading to sufferings for them. The association of the realtors, the Real Estate and Housing Association of Bangladesh-REHAB-has also admitted the fact that the number of complaints against its members has more than tripled in recent days for their failure to handover flats/ apartments in time. But the association has blamed the abnormal hike in the prices of construction materials, mainly MS rod, for the delay. The reason cited by the REHAB is very much logical. But the fact remains that the realtors have no other option but to hand over flats/ apartments within the deadlines mentioned in the contracts signed with their clients. Yet one cannot just overlook the predicaments of the home builders. In some cases, the clients and the realtors concerned reach at an amicable settlement when the former agree to compensate for the losses of the latter, at least, to some extent. However, such a solution is not liked by most clients.
The prices of flats/ apartments have tripled in Dhaka city over the last couple of years, notwithstanding the fact that demand for the same has been on the wane, largely due to the anti-graft drive by the incumbent caretaker administration. The middle class families already hit hard by spiraling prices of daily necessities have stopped dreaming about owning homes at such prices. The main buyers of homes these days are affluent sections of the society and the non-resident Bangladeshis. The country's central bank has recently made available Tk. 3.0 billion as housing refinancing facility to banks with a view to helping the middle and lower middle class people to take housing loans at an affordable interest rate of 9.0 per cent. But this apparent generous scheme, has arrived late. For even the maximum loan amount available under it is far too short to meet the price of a small flat in Dhaka city. The government, reportedly, is readying an appropriate law to facilitate proper growth of the housing sector of the country. But, more than anything else, what the sector needs right at the moment is the rationalization of the prices of construction materials, particularly MS rod. A decline in the prices of steel products might be very much round the corner with the economies of China and India entering a cooling phase. Yet the government does need to do whatever it can to help bring down prices of construction materials and give the much-needed boost to the housing sector.
Allegation about the delay in handing over flats or apartments to their clients by the home-builders is nothing new. But the rate of such allegation, according to a report published in this daily last Saturday, has risen abnormally in recent days. The report claimed that nearly 50 per cent of the buyers were not getting delivery of their flats/ apartments in time, leading to sufferings for them. The association of the realtors, the Real Estate and Housing Association of Bangladesh-REHAB-has also admitted the fact that the number of complaints against its members has more than tripled in recent days for their failure to handover flats/ apartments in time. But the association has blamed the abnormal hike in the prices of construction materials, mainly MS rod, for the delay. The reason cited by the REHAB is very much logical. But the fact remains that the realtors have no other option but to hand over flats/ apartments within the deadlines mentioned in the contracts signed with their clients. Yet one cannot just overlook the predicaments of the home builders. In some cases, the clients and the realtors concerned reach at an amicable settlement when the former agree to compensate for the losses of the latter, at least, to some extent. However, such a solution is not liked by most clients.
The prices of flats/ apartments have tripled in Dhaka city over the last couple of years, notwithstanding the fact that demand for the same has been on the wane, largely due to the anti-graft drive by the incumbent caretaker administration. The middle class families already hit hard by spiraling prices of daily necessities have stopped dreaming about owning homes at such prices. The main buyers of homes these days are affluent sections of the society and the non-resident Bangladeshis. The country's central bank has recently made available Tk. 3.0 billion as housing refinancing facility to banks with a view to helping the middle and lower middle class people to take housing loans at an affordable interest rate of 9.0 per cent. But this apparent generous scheme, has arrived late. For even the maximum loan amount available under it is far too short to meet the price of a small flat in Dhaka city. The government, reportedly, is readying an appropriate law to facilitate proper growth of the housing sector of the country. But, more than anything else, what the sector needs right at the moment is the rationalization of the prices of construction materials, particularly MS rod. A decline in the prices of steel products might be very much round the corner with the economies of China and India entering a cooling phase. Yet the government does need to do whatever it can to help bring down prices of construction materials and give the much-needed boost to the housing sector.