REHAB Fair: Challenge of wining buyers' confidence
Wednesday, 21 November 2007
Munima Sultana
The REHAB fair 2007, the annual event of real estate developers, began in the city on Tuesday with a high hope to overcome the sector's frustration over declining sales of apartments and plots.
The sector observers say that sales of both apartments and lands dropped around 50 percent since the present government's anti-corruption drive and policy to check entry of black money into the sector than began after 1/11.
This sector has also experienced dull business because of rise in apartment prices during the last several months.
In a move to face the challenge, the leaders of REHAB, Real Estate and Housing Association of Bangladesh, expressed hope that this fair would work to regain the market and help brighten image of the sector to the customers.
"No unapproved plots or flats will be sold in the housing fair," reassured Tanveerul Haque Probal, general secretary of REHAB, during a meeting with the editors of newspapers last week and a press conference this week.
He said that REHAB has already directed its members to display government's approval of their projects to the customers visiting their stalls so that their confidence in the participating developers might increase.
The REHAB sources said around 130 developers out of 336 REHAB members are taking part in the five-day annual exposition. Besides, some financial organisations are also there to familarise their products to the visitors. REHAB organises the fair aiming at building link among member developers, financial institutions and building material providers to foster the growth of real estate sector.
While talking to one of the participants of the fair, Sadat Selim, managing director of Rupayan Housing Ltd, told FE that they expect this year's REHAB fair would work as a bridge between the developers and buyers.
When asked how they would earn the customers' confidence when the government is yet to relax its policy to inject black money into the sector, Selim said this is the matter REHAB is working with the government. " But what we can do in the fair is try our best for whatever facility we could provide to our customers," he added.
The growth of real estate in the country has been significant during the last one decade. It is said the sector contributes 7 percent to the national economy and has created employment opportunities for near about two million people. Its contribution to the gross domestic products is 12-14 per cent. The growth of the sector was 25 per cent in 2005, a 10 per cent rise over the previous years.
The market observers said the prospect of the sector is still high as Dhaka, being one of the most densely populated cities of the world, faces a heavy pressure from migrated population. As there is increasing demand for apartments and lands, the price of land, houses and apartments always show an upward trend. But it remains beyond the reach of the majority city dwellers.
Although many commercial banks and non-banking financial institutions (NBFIs) offer loan facilities for buyers, the high interest rates of these institutions, however, work as obstacles to the growth of the sector. The bank interest rate which is 16 per cent at its highest is considered a major obstacle to materialise such dream of the people, said the REHAB leaders.
However this year's fair is being held under a changed scenario. The Bangladesh Bank has recently introduced a refinancing scheme of Tk 3.00 billion for the real estate sector to facilitate the middle class people's dream of having a house in the city. Under this scheme, some commercial banks and non-banking financial institutions are providing loan with only 10 per cent interest.
The Rupayan MD said this scheme is a good initiative but the total fund is needed to increase manifold to help more middle class customers fulfill their dream.
But the critics said the size the BB scheme is too small to help the middle class buyers purchase any flat price of which is skyrocketing. "When the price of apartments in the capital Dhaka have already gone up by 20 to 40 percent, how can we having monthly income of Tk 15,000-Tk 30,000 think of buying an apartment.
The rate of (per-square-foot) apartment has increased Tk 500 for both six-storey and high-rise buildings. The REHAB leaders attributed the rise of prices to construction materials.
The latest REHAB study shows that flat prices went up by 40 percent in posh areas such as Dhanmondi, Gulshan and Banani and 20 per cent in other areas. It says that the present market prices of MS rod have marked a rise by 19percent, cement 32percent, bricks 62percent and sand 72percent compared to the prices in 2005. The prices of electric wire also increased by 100percent, aluminum and paint 32percent, labour and materials 28percent.
To get rid of the situation, the REHAB leaders suggested to increase the BB fund to Tk 30.00 billion and lower the interest rate to 6 per cent.
The fair organisers say that in all situation, the buyers have to bear the aftereffects. So this fair will be a platform to bring consensus between buyers and sellers.
They said the REHAB fair would try to solve all the problems that the government and buyers are blaming the sectors for.
The REHAB fair 2007, the annual event of real estate developers, began in the city on Tuesday with a high hope to overcome the sector's frustration over declining sales of apartments and plots.
The sector observers say that sales of both apartments and lands dropped around 50 percent since the present government's anti-corruption drive and policy to check entry of black money into the sector than began after 1/11.
This sector has also experienced dull business because of rise in apartment prices during the last several months.
In a move to face the challenge, the leaders of REHAB, Real Estate and Housing Association of Bangladesh, expressed hope that this fair would work to regain the market and help brighten image of the sector to the customers.
"No unapproved plots or flats will be sold in the housing fair," reassured Tanveerul Haque Probal, general secretary of REHAB, during a meeting with the editors of newspapers last week and a press conference this week.
He said that REHAB has already directed its members to display government's approval of their projects to the customers visiting their stalls so that their confidence in the participating developers might increase.
The REHAB sources said around 130 developers out of 336 REHAB members are taking part in the five-day annual exposition. Besides, some financial organisations are also there to familarise their products to the visitors. REHAB organises the fair aiming at building link among member developers, financial institutions and building material providers to foster the growth of real estate sector.
While talking to one of the participants of the fair, Sadat Selim, managing director of Rupayan Housing Ltd, told FE that they expect this year's REHAB fair would work as a bridge between the developers and buyers.
When asked how they would earn the customers' confidence when the government is yet to relax its policy to inject black money into the sector, Selim said this is the matter REHAB is working with the government. " But what we can do in the fair is try our best for whatever facility we could provide to our customers," he added.
The growth of real estate in the country has been significant during the last one decade. It is said the sector contributes 7 percent to the national economy and has created employment opportunities for near about two million people. Its contribution to the gross domestic products is 12-14 per cent. The growth of the sector was 25 per cent in 2005, a 10 per cent rise over the previous years.
The market observers said the prospect of the sector is still high as Dhaka, being one of the most densely populated cities of the world, faces a heavy pressure from migrated population. As there is increasing demand for apartments and lands, the price of land, houses and apartments always show an upward trend. But it remains beyond the reach of the majority city dwellers.
Although many commercial banks and non-banking financial institutions (NBFIs) offer loan facilities for buyers, the high interest rates of these institutions, however, work as obstacles to the growth of the sector. The bank interest rate which is 16 per cent at its highest is considered a major obstacle to materialise such dream of the people, said the REHAB leaders.
However this year's fair is being held under a changed scenario. The Bangladesh Bank has recently introduced a refinancing scheme of Tk 3.00 billion for the real estate sector to facilitate the middle class people's dream of having a house in the city. Under this scheme, some commercial banks and non-banking financial institutions are providing loan with only 10 per cent interest.
The Rupayan MD said this scheme is a good initiative but the total fund is needed to increase manifold to help more middle class customers fulfill their dream.
But the critics said the size the BB scheme is too small to help the middle class buyers purchase any flat price of which is skyrocketing. "When the price of apartments in the capital Dhaka have already gone up by 20 to 40 percent, how can we having monthly income of Tk 15,000-Tk 30,000 think of buying an apartment.
The rate of (per-square-foot) apartment has increased Tk 500 for both six-storey and high-rise buildings. The REHAB leaders attributed the rise of prices to construction materials.
The latest REHAB study shows that flat prices went up by 40 percent in posh areas such as Dhanmondi, Gulshan and Banani and 20 per cent in other areas. It says that the present market prices of MS rod have marked a rise by 19percent, cement 32percent, bricks 62percent and sand 72percent compared to the prices in 2005. The prices of electric wire also increased by 100percent, aluminum and paint 32percent, labour and materials 28percent.
To get rid of the situation, the REHAB leaders suggested to increase the BB fund to Tk 30.00 billion and lower the interest rate to 6 per cent.
The fair organisers say that in all situation, the buyers have to bear the aftereffects. So this fair will be a platform to bring consensus between buyers and sellers.
They said the REHAB fair would try to solve all the problems that the government and buyers are blaming the sectors for.