Prospects of the real estate sector
Thursday, 13 November 2008
The Real Estate and Housing Association of Bangladesh (REHAB) has launched its five-day long annual fair at a city auditorium from Saturday. It is being participated by 187 members of REHAB along with five financial organizations associated with its activities. The annual exposition is a reflection of this sector today which grew from a fledgling state to its present formidable position remarkably in a little over a decade's time.
Real estate sector developers have played an appreciable role in adding to the home ownership of a large number of people in the city. From building comfortable multi-storied building with modern amenities within a reasonable time period and then handing them over to customers by the stipulated date, they have contributed significantly to housing needs of the upper and middle classes in Dhaka city as well as other cities of the country. Besides, the multi-storied buildings with many flats have led to most economical use of land in this country while also satisfying the urge for decent housing. This is not to say that all real estate developers or their clients enjoyed unfailingly a harmonious relationship. There had been many accounts of some developers failing to meet commitments and harassing their clients. But that is another story. The important thing to note is that this sector, on the whole, has delivered and delivered well to its clients.
What is more significant is that in the process the real estate sector has emerged as an exceptionally promising sector for the total economy. Its present contribution to the gross domestic product (GDP) is about 16 per cent. Given proper supports, this contribution can increase substantially in the near future. As it is, the sector's real contribution to the GDP is already greater if the turnover of the linkage industries of the sector such as rods, cement, tiles, electrical goods and equipment and other construction materials are counted as well. Nearly three million skilled and unskilled workers earn a livelihood from this sector and the further employment creating potentials of it are considered as particularly high. Thus, this sector would certainly be deserving all round supports from the government.
For example, the registration fee for real estate is already considered as very high. The inability to pay such high fees frustrates many otherwise intending buyers from buying real estate. REHAB and its customers say that it should be maximum 5.0 per cent to really create a big enough stimulus among the prospective buyers to press ahead with their buying plans. REHAB leaders are of the view that unless a section of the income tax rules, which in the past provided for not questioning the source of wealth in relation to buying of houses, is not reintroduced, then potential clients will continue to shy away from buying flats or houses. In the case of cement the import of which is subjected to restrictions, REHAB has asked for a withdrawl of such restrictions along with lower duties on the imported cement so that the housing and construction sector can benefit from adequate availability and reasonable price of this basic building material.
Government provides cash incentives for some export products to encourage exporters to export more and earn more foreign currency . REHAB leaders are for similar giving of cash incentives to them as they make sales of real property to Bangladeshis living abroad. The cash incentives will give a spur in selling real estate among overseas buyers leading to growth in the industry. The sales, on the other hand, will also add to the country's foreign currency reserve. REHAB has also demanded that government should explore the ways and means of extending long term housing loans at nominal interests to encourage greater housing and construction activities.
Real estate sector developers have played an appreciable role in adding to the home ownership of a large number of people in the city. From building comfortable multi-storied building with modern amenities within a reasonable time period and then handing them over to customers by the stipulated date, they have contributed significantly to housing needs of the upper and middle classes in Dhaka city as well as other cities of the country. Besides, the multi-storied buildings with many flats have led to most economical use of land in this country while also satisfying the urge for decent housing. This is not to say that all real estate developers or their clients enjoyed unfailingly a harmonious relationship. There had been many accounts of some developers failing to meet commitments and harassing their clients. But that is another story. The important thing to note is that this sector, on the whole, has delivered and delivered well to its clients.
What is more significant is that in the process the real estate sector has emerged as an exceptionally promising sector for the total economy. Its present contribution to the gross domestic product (GDP) is about 16 per cent. Given proper supports, this contribution can increase substantially in the near future. As it is, the sector's real contribution to the GDP is already greater if the turnover of the linkage industries of the sector such as rods, cement, tiles, electrical goods and equipment and other construction materials are counted as well. Nearly three million skilled and unskilled workers earn a livelihood from this sector and the further employment creating potentials of it are considered as particularly high. Thus, this sector would certainly be deserving all round supports from the government.
For example, the registration fee for real estate is already considered as very high. The inability to pay such high fees frustrates many otherwise intending buyers from buying real estate. REHAB and its customers say that it should be maximum 5.0 per cent to really create a big enough stimulus among the prospective buyers to press ahead with their buying plans. REHAB leaders are of the view that unless a section of the income tax rules, which in the past provided for not questioning the source of wealth in relation to buying of houses, is not reintroduced, then potential clients will continue to shy away from buying flats or houses. In the case of cement the import of which is subjected to restrictions, REHAB has asked for a withdrawl of such restrictions along with lower duties on the imported cement so that the housing and construction sector can benefit from adequate availability and reasonable price of this basic building material.
Government provides cash incentives for some export products to encourage exporters to export more and earn more foreign currency . REHAB leaders are for similar giving of cash incentives to them as they make sales of real property to Bangladeshis living abroad. The cash incentives will give a spur in selling real estate among overseas buyers leading to growth in the industry. The sales, on the other hand, will also add to the country's foreign currency reserve. REHAB has also demanded that government should explore the ways and means of extending long term housing loans at nominal interests to encourage greater housing and construction activities.