Housing sector needs policy support, more investment to meet growing demand

Speakers at a seminar stressed the need for further investment in the housing sector as the developers could meet only half the demand in the urban areas.

They also said the sector needs a realistic policy support to help grow it smoothly and ensure housing for middle- and lower middle-income groups at an affordable cost.

Terming the sector secured, the realtors and experts urged both the banks and financial institutions to provide loans for enabling customers to buy houses and the realtors to construct those.

"Investment in our sector is highly secured as the loans are backed by tangible assets," Shafiq Rahman, chairman of a standing committee of Real Estate and Housing Association of Bangladesh (REHAB), said in a keynote presentation.

He spoke at a seminar on "Secure and Prospective Investment: Real Estate Industry of Bangladesh", organised by REHAB at Ruposhi Bangla Hotel in the city on Sunday last.

Prime Minister's Economic Affairs Adviser Dr Mashiur Rahman spoke at the seminar as the chief guest while Bangladesh Bank Deputy Governor Dr SK Sur Chowdhury and Sonali Bank Chairman Prof AHM Habibur Rahman as special guests.

Executive Director of Policy Research Institute (PRI) Dr Ahsan H Mansur, REHAB General Secretary M Wahiduzzaman and REHAB Vice President Maj Gen M Abdur Rashid also spoke on the occasion while Chairman, Seminar Standing Committee of the REHAB Shafiq Rahman presented the keynote paper at the seminar held with REHAB acting President Mukarram Hussain Khan in the chair.

Speaking as the chief guest, Mashiur Rahman said attention needs to be given to vertical expansion with sound structural design to meet the growing demand for housing.

"The country has land scarcity…land is on the declining trend. So, we need to ensure optimum utilisation of the same," he said.

The Adviser also emphasized on decentralisation of housing projects to cut pressure on Dhaka through building efficient institutions in other parts of Dhaka.

Bangladesh Bank Deputy Governor Sur Chowdhury said banks' all-out support to the real estate sector will remain unchanged.

He hoped that prospective borrowers and buyers will continue to get loan facilities from the commercial banks.

Dr Ahsan H Mansur said the country's real estate sector would have to be made stronger because the economic vibrancy largely depends on a smooth functioning of the real estate sector.

He criticised Rajuk for its failure to deliver due role saying "Rajuk is good for nothing".

He said RAJUK should do business with land or plots/flats and it should regulate and monitor the sector.

He observed that the prices of flats have highly been overvalued which have gone even beyond the purchasing capacity of higher middle-class.

The economist said banks cannot be the key sources of financing for the real estate sector and suggested introduction of bond to address the financing problem.

The speakers further said private real estate developers are contributing around 12 per cent to the country's total GDP. Proper policy and financial support from the government could help the real estate developers to double their contribution to GDP.

There are more than 200 backward linkage industries related to the real estate sector are in the country and almost 70 per cent of their products are being consumed by real estate developers.

The speakers said the economy will remain vibrant if the sector remains vibrant as there are so many sectors which are directly or indirectly involved with the real state sector, they said laying emphasis on optimum utilisation of land.

They said private real estate developers are contributing about 12.12 per cent of the country's total GDP (gross domestic product) and a proper policy and financial support from the government can help them a lot.

The REHAB leaders said it is the time for investing in the sector and observed that there is a huge scope of business in the sector as the demand for urban housing is rising fast.

They referred to the US and Dubai real estate market and said that those markets boomed again after the economic recession that hit globally and termed the real estate business the safest mode of investment as the investment offers physical position of the assets.

At present, the annual demand for housing in urban areas is around 30,000 units and within the next five years it is expected to cross 60,000 units.

The private real estate developers are currently building barley 17,000-18,000 units annually. So, currently the realtors can provide maximum 50 per cent of the total demand.

The demand will remain some 25 per cent in constant as different statistics show that some 4 million houses needed to be built to meet the housing demand over the next 20 years.