A pragmatic strategy needs to be worked out urgently to help grow the country’s real estate sector smoothly and ensure housing for middle- and lower middle-income groups at an affordable cost, speakers told a seminar here on Sunday night.
Terming the sector the engine of growth, they 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, and laid emphasis on optimum utilisation of land.They said private real estate developers are contributing about 12.12 percent of the country’s total GDP (gross domestic product) and proper policy and financing support from the government can help the real estate developers to contribute double, some 25 percent of the national GDP.
Real Estate and Housing Association of Bangladesh (REHAB) arranged the seminar, titled ‘Secure and Prospective Investment: Real Estate Industry of Bangladesh’ at Ruposhi Bangla Hotel in the city.
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. “We’ve land scarcity…land is on the declining trend. So, we need to ensure optimum utilization of land,” he said.
The Adviser also laid emphasis on decentralisation of housing projects to cut pressure on Dhaka through building efficient institutions in other parts of Dhaka.
Dr Ahsan 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 sharply criticised Rajuk for its failure to deliver its due role saying “Rajuk is good for nothing”.
“It should not be Rajuk’s job to do land business,” Dr Ahsan said adding that Purbachal plots (allocated) remained unutilisd as there had been no construction yet.
He observed that the prices of flats have highly been overvalued which have gone even beyond the purchasing capacity of higher middle-class group let alone the lower middle-income group people. “It needs to be controlled.”
The economist said banks cannot be the key sources of financing for the real estate sector and suggested introducing bond to address the financing matter.
BB Deputy Governor Sur Chowdhury said banks’ all-out support for the real estate sector will remain unchanged.
He hoped that prospective borrowers and buyers will continue to get loan facilities from the commercial bank.
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 following the economic recession that hit globally and termed the real estate business as 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 percent of the total.
The demand will remain some 25 percent in constant as different statistics show that some 4 million houses needed to be built to meet the housing demands over the next 20 years.
More than 200 backward-linkage industries related to the real estate sector are surviving as almost 70 percent of their products are being consumed by real estate developers.
Commercial banks’ total investment accounts for some Tk50 thousand crore in real estate relevant industries like steel mills, cement, sanitary, tiles and so on. – UNB
