Housing sector crisis and prospects

FE Team | Published: Wednesday, 29 April 2026

The housing sector is one of the fundamental pillars of Bangladesh's economy-this point is clearly emphasized by real estate entrepreneur Dr. Md. Shadi-Uz-Zaman, while talking to The Financial Express (FE).
According to him, any crisis in this sector does not only affect real estate but poses a significant risk to the overall economy, as more than 400 ancillary industries are directly and indirectly linked to it.
He notes that the recent surge in construction material prices has dealt a major blow to the housing sector. The prices of rod and cement have increased by nearly 25 percent, raising overall construction costs by around 30 percent. As a result, apartment prices have naturally increased, reducing the purchasing power of buyers. This situation has been further exacerbated by the limitations of the previous Detailed Area Plan (DAP), where restrictions on Floor Area Ratio (FAR) often reduced building capacity from 8-9 floors to 5-6 floors. Consequently, landowners have become less interested in joint ventures with developers, and many projects have become less financially viable. As a result, numerous companies have scaled back investments, laid off employees, and adopted cost-cutting measures to survive.
However, Dr. Shadi-Uz-Zaman believes that the revised DAP (2022-2035) and the new Building Construction Rules introduced in 2025 have opened up new opportunities for the housing sector. With increased FAR under the new regulations, developers can construct more units on the same land. This creates greater financial incentives for landowners, potentially increasing their interest in joint ventures. At the same time, it presents a major opportunity for developers, as higher FAR means more saleable units and improved project profitability. Areas such as Old Dhaka, Mirpur, Dakshinkhan, Savar, and Keraniganj are particularly likely to benefit from increased investment due to these changes.
He further adds that an increase in housing supply under the new policies will intensify market competition, which may help stabilize prices and benefit middle-income buyers. However, he cautions that increasing FAR alone cannot ensure sustainable urbanization. It must be accompanied by coordinated development of infrastructure such as roads, water supply, gas, electricity, and drainage systems; otherwise, excessive population density will put additional pressure on the city.
On the policy front, he emphasizes the need for coordinated efforts between the government and private sector to revitalize the housing industry. He proposes the establishment of a "one-stop" housing project approval center, where all necessary approvals can be processed efficiently in one place. He also suggests introducing a grading system (A, B, C) for housing and land development projects to ensure greater transparency for buyers.
Regarding the discontinuation of the opportunity to legalize undisclosed (black) money, he observes that while it may reduce domestic investment, it could also increase the risk of capital flight. However, if such funds can be redirected into domestic investments, it would contribute to employment generation, economic growth, and increased government revenue.
He also highlights that the housing sector contributed 8.48 percent to the country's GDP in the 2023-24 fiscal year, underscoring its importance. Therefore, he urges the government to prioritize the sector in the upcoming budget by ensuring faster approval of fully compliant housing projects. He also stresses the need for corporate financing facilities, policy simplification, and decentralization.
In conclusion, Dr. Md. Shadi-Uz-Zaman expresses optimism that through proper planning, effective implementation, and strong public-private collaboration, the current challenges can be overcome. With the right policy decisions in the upcoming 2026-2027 budget, the housing sector can once again emerge as a powerful driving force of Bangladesh's economy.