Real Estate in Bangladesh grows steadily due to various factors

Dhaka/Bangladesh – Real estate market experienced remarkable growth during the past two years due to the rapid development of the country.

Since the last increase in per-capita income and expanding middle-class, demands for housing raised, which eventually contributed to the overall real estate sector growth.

From only five registered Real Estate companies in 1970 to more than a thousand one is now active in the field, not counting a large number of unregistered businesses.

Out of which REHAB, Real Estate & Housing Association of Bangladesh, enlisted companies account for 879.

The market grew at an average annual rate of 10% over the 2019-2020 period making the total annual market revenues Tk58, 00 crores.

Now, the concept of real estate is not only limited to developing apartments but also model cities, shopping malls, and major infrastructure.

The housing sector’s contribution to GDP in Bangladesh is 7.96 percent, whereas linkage industries, such as MS bar, cement, brick, sand, ceramic tile, paint, and other fixtures and fittings, contribute about 12 percent.

Projection from the last population census says that the total housing demand was 0.8 million units in 2020 and will be 1.14 million units in 2030.

This sector directly adds to the government revenue (in the form of VAT, registration fee, utility fee, etc.) on an average of nearly BDT 5.0 billion.

Kamal Mahmud, vice president of REHEB, said the circular published at the beginning of the fiscal year, 2020-2021 by the Commerce Ministry on the investment of un-taxed money to real estate sector was the turning point of the sector.

It enabled them to sell a lot of ready flats, floors, and commercial spaces at that time.

“The government initiative to reduce home loan interests in single-digit was a stimulant initiative to boost up the sector. Moreover, reduction of the registration fees, land transfer tax, stamp duty, mutation costs, and digitization of land-related paperwork are other major reasons for the quick rebound of the housing sector,” he added.

According to the REHAB research, around Tk, 3,500 crores in untaxed income were invested in the sector over the last six months.

A continuous spike in prices of essential construction materials and supply shortage has dealt a big blow to the country’s real estate sector, industry insiders said, adding several projects – which resumed following the relaxation of Covid-19 restrictions – may come to a halt again owing to the fresh crisis, hindering the recovery efforts.