Realtors rue their woes stemming from rising pressure on the property business of late for a combination of policy shifts and regulatory uncertainties. One major blow came in 2022 when the previous government reduced the Floor Area Ratio (FAR) in the Detailed Area Plan (DAP), compounding difficult for developers in undertaking new projects.
In addition, government agencies such as the National Board of Revenue (NBR) and the Anti-Corruption Commission (ACC) have intensified their investigations into flat owners. According to industry insiders, these investigations gained momentum following the formation of the current government.
In response to these concerns, the current interim administration has proposed revising the DAP to help restore investor confidence and make Dhaka more livable. The government advisory council is scheduled to hold another meeting on October 12, according to industry sources. Developer officials believe that resolving the DAP issue could unlock more rapid expansion in Dhaka.
After three years of steep increases in raw-material costs, input prices have stabilized over the past year. However, this has come too late for many companies that have already suspended operations due to significant sales drop. According to industry-insiders, flat sales have dropped by nearly 35 per cent over the last year, in a stark reversal of fortune as the sector had previously enjoyed annual growth rates of 20 to 25 percent. Demand for high-end property has declined even more sharply-by about 45 per cent.
Estimates from within the sector suggest that the annual market size of Dhaka's real-estate industry stands at approximately Tk 150 billion, based on the sale of roughly 10,000 flats per year. The average price of a flat is about Tk 15 million. The price per square foot varies widely depending on the location and the reputation of the developer, ranging from Tk 9,500 to Tk 35,000, with penthouses priced as high as Tk 40,000 per square foot.
Currently, there are 893 companies registered with the Real Estate and Housing Association of Bangladesh (REHAB), though only around 30 of them conduct regular business. Among the major players in the sector are Shanta Holdings Limited, Rancon Holdings Limited, Concord Real Estate Ltd, Building Technology & Ideas Ltd., Sheltech (Pvt.) Ltd, ABC Real Estate Ltd, Urban Design & Development Ltd, The Structural Engineers Ltd, Assurance Developments Ltd, and Asset Development & Holdings Ltd.
Liaquat Ali Bhuiyan, Senior Vice President of REHAB, says the current DAP regulations have become a major obstacle for real estate, with companies struggling to take on new projects. He explains: "Companies which previously launched ten projects a year are now barely managing two, just to stay in business." He also mentions that increased scrutiny from government enforcement agencies on flat owners may erode consumer confidence. He emphasizes that such investigations should be conducted based on specific cases, rather than randomly, to avoid discouraging potential buyers.
A senior official from a leading real-estate company, speaking on condition of anonymity, said that the sector has historically attracted a portion of investment from undisclosed income. The interim government's decision to deny such investment scope for the current fiscal year has also impacted the flow of funds into the sector. The same official points out that high taxes on land and flat registration push many buyers and sellers to understate the value of their property, which leads to underreporting of income and limits transparency on the market.
Due to recent policy changes and rising inflation, many potential buyers are now choosing to rent instead of purchasing new flats. Developers are attempting to reduce prices in line with stable raw-material costs, but industry leaders say this is not enough to stimulate demand.
While raw-material prices have stabilized in the last 18 months, industry-insiders note that this has not translated into benefits due to weak sales. Steel prices, for example, have remained between Tk 8,400 and Tk 8,700 per tonne since 2024. In comparison, prices surged to Tk 100,000 per tonne during the COVID-19 pandemic, when demand spiked due to major government infrastructure projects nearing completion, including the Padma Bridge, metro rail, Rooppur Nuclear Power Plant, and Payra Power Plant. The COVID pandemic and the war in Ukraine also disrupted global supply chains, further driving up prices.
Some sector leaders allege that there may have been deliberate manipulation of raw-material prices to inflate the cost of government projects. Cement prices, which had risen to Tk 500-570 per bag during the peak of the crisis, now declined to Tk 490-530, with corporate clients paying around Tk 480. Limestone prices have risen nearly 60 per cent in the last five years, largely due to import dependency, while the Indian government's recent export restrictions have pushed costs even higher. Similarly, local sand prices per cubic foot have increased by nearly 80 per cent-from Tk 20-25 to Tk 35-40-on the back of rising transportation costs, flooding, and seasonal supply disruptions.
REHAB and individual companies are making efforts to revive the market by offering discounts. The annual REHAB Winter Fair, typically held in December, is expected to feature significant promotions, with companies offering Tk 2.0 to 2.5 million in discounts on both new and unsold inventory.
Speaking to The Financial Express, Mohammad Shahjahan, Chief Operating Officer of Sheltech (Pvt.) Ltd, said, "We are maintaining our commitment to customers with the assurance of full compliance and product quality. This has enabled us to navigate challenging times, even when the sector's overall business is slow. It remains our key strength and has supported our sustained growth over the past 38 years."
He mentions that Sheltech had traditionally targeted the upper-middle-class segment but has now moved into the premium market with its Sapphire Series.
The limitations imposed under the DAP, however, appears as a blessing in disguise for some. Jolshiri Abashon has emerged as a new investment destination for real-estate developers. As it operates under military authority and is not subject to DAP taboos, many developers are turning to this area. According to Jolshiri project officials, over 100 real-estate projects are currently underway in the area. Fortis Real Estate and Basic Builders have each taken on 35 projects, while Sheltech (Pvt.) Ltd is developing around 20.
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