Realtors cut prices as demand drops

Shah Alam Nur
Realtors have started cutting back on prices of apartments and plots in an attempt to lure back buyers as demand falls, industry people say.
They say that price reduction has become more pronounced in the last three years than in the past.
Industry people said apartment and land prices in Dhaka city have fallen by up to 30 per cent this year, compared with the previous three years.
The realtors are now selling per square foot (sft) of a flat on an average at Tk 9,090 in several areas in Dhaka city, which was Tk 10,182 in 2014, according to a recent study of Sheltech, a leading real estate company of the country.
The study said in 2012, each square foot of a flat in posh Gulshan area was sold at Tk 15,500 on an average, which came down to Tk 14,000 in 2013, Tk 13,000 in 2014 and now it is selling at Tk 11,000 in the same area.
The realtors are now selling each square foot of a flat at Tk 12,000 on an average in Dhanmondi area, down from Tk 14,000 in 2013 and Tk 13,000 in 2014.
In Mohammadpur area, each square foot of a flat is now selling at Tk 7,000, which was Tk 9,500 in 2013 and Tk 8,000 in 2014.
The study also showed land price in Dhaka fell on an average by a quarter in the last two years.
The land owners are now selling each katha of land in Baridhara at Tk 45 million (Tk 4.5crore) on average, down from Tk 60 million (Tk 6 crore) in 2013.
In Mirpur, each katha of land is now selling at Tk 5.0 million, which was Tk 6.0 million in 2014 and Tk 7.0 million in 2013.
Data from the Real Estate and Housing Association of Bangladesh (REHAB), the trade lobbyist, showed that more than 11,000 ready-for-sale apartments worth around Tk 110 billion have remained unsold.
In the last two years, plot and flat sales have dropped as expatriate Bangladeshis, international economic slowdown, former president of REHAB, Tanverul Haque Probal, told the FE.
He said a large number of ready flats are lying unsold as the sector players did not get buyers.
Mr Probal said the unsold flats have become a burden on companies, most of them have bank loan.
"It's true that many companies have been reducing price of their plots and flats to boost sales," he said.
Md. Wahiduzzaman, general secretary of REHAB, said that the sector players in the real estate industry have been passing "critical time" as their business has declined significantly.
REHAB said each year, its roughly 1,200 members of build 14,000-1,5000 units of apartments.
The association data also showed top 50 companies hold around three-quarters of the total market share.
The real estate sector is seen as a crucial sector of the economy that employs more than 3.6 million people.
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