Property sector becoming more optimistic of a rebound
Bangladesh's property sector will hopefully be able to cope with the ongoing coronavirus pandemic as instalment collection on previous sales began to pick up following the economy reopened in June, according to various realtors and financiers.
Besides, the government has allowed the consumption of untaxed income to get land or apartments as the reduction in registration service fees makes this time for you to invest in property at reasonable costs.
However, the country's realtors also said that apartment prices could eventually increase due to the rising cost of recycleables and delays in project implementation.
"We had feared that people would face difficulty in surviving the pandemic carrying out a drop in demand for housing amid the unprecedented monetary uncertainty due to the Covid-19 fallout," said Alamgir Shamsul Alamin, president of the true Estate and Housing Association of Bangladesh (REHAB).
But the situation is increasing alongside the increase of monetary activities, he added.
Immediately after the nationwide 'general holiday' targeted at curbing the spread of coronavirus within Bangladesh found a finish on 30 May, realtors resumed construction on the projects consistent with health insurance and safety guidelines to avoid further outbreaks.
As such, developers have already been forced to recruit a smaller number of staff to maintain enough social distancing at projects which, in turn, is leading to delays in the handover process.
Not only is this an inconvenience for the client, but it addittionally inflates the production charges for the developer, Alamin said.
Certain realtors may not even be able to reach a breakeven point on their investments, based on the REHAB president.
Meanwhile, much of the country's burgeoning middle-class, an integral demographic for the real estate industry, cannot afford housing at current rates.
"Therefore, the federal government should undertake topical policy measures that could help provide reasonably-priced housing for middle-income people," Alamin said.
As a result of prolonged nationwide lockdown that started on 26 March, about 6,000 projects owned by various REHAB members were in circumstances of limbo as construction work was halted for approximately two-and-a-half months.
"We aren't thinking from a business standpoint right now. Instead, we are trying to tackle the crisis," Alamin said.
The sector got a shot in the arm in July last year, when the federal government moved to slash registration service fees and interest levels on loans.
Now though, realtors are simply trying to survive the pandemic instead of make a profit, he added.
Echoing the sentiment, Kamal Mahmud, vice-president of REHAB, said the industry has seen a ray of hope in its fight the coronavirus fallout following changes to certain state-policies.
The government's decision to relax the guidelines on investing untaxed income in property slightly benefitted the sector in the last two months as the reduced registration costs are helping sales to recover gradually.
"And even though the disruption in the supply chain for raw materials is an issue that persists, I am hopeful that the sector will go back to normalcy when the coronavirus crisis concludes," Mahmud added.
Subsequently, the country's banking sector is also enjoying some relief because of a rise in instalment collection while the other monetary activities are gathering momentum aswell.
"This can be a right time for many who dream of becoming property owners in Dhaka to acquire a flat as realtors need liquidity to recuperate from the pandemic," said Md Sirajus Saleken, head of mortgaging at IPDC Finance, a significant provider of mortgage loans in the country.
In this regard, IPDC Finance will introduce new financing products while keeping both realtors and clients in mind, Saleken said, adding that realtors may also come forward with their own offers.
The non-bank lender funds around twelve well-reputed realtors for mortgage loan borrowers.
Houses in the Uttara, Bashundhara and Mohammadpur areas have the best demand, said Mark Nosworthy, ceo of bproperty, the largest online property broker in Bangladesh.
These areas constitute about 35 per cent of the total demand for 2020.
If the sector recovers, its allied industries, which there are 230, will also benefit, according to industry insiders.
