Real estate sector bounces back
Things are finally looking up for realtors in 2020 after a bumpy last few years thanks to government support to public servants for housing loans and an increase in home loan ceiling by the central bank.
The sector saw at least 9 percent growth this year, according to Alamgir Shamsul Alamin, president of the Real Estate and Housing Association of Bangladesh (REHAB).
He went on to credit the government decision to extend low-cost home loans to public servants from fiscal 2018-19 for the pickup in flat sales.
Based on the location and grade of a government employee, he or she can now take loans starting from Tk 20 lakh to up to Tk 75 lakh at 10 percent interest from public banks like Sonali, Rupali and Agrani and the state-owned Bangladesh House Building Finance Corporation.
Of the 10 percent interest rate, the government will foot 5 percent and the employee will bear the rest.
Alamin, however, could not provide accurate flat sales figure for 2019 due to the absence of central data collection by the sector’s trade body.
“Sales were slightly better this year,” said Liakat Ali Bhuiyan, first vice-president of REHAB and chairman of Brick Works Development, a real estate company. Brick Works managed to sell all apartments in its three ongoing projects in 2019.
As of December 27, about 11,000 flats remain unsold, in contrast to 14,000 at the end of 2018, according to Bhuiyan.
The sector would gain momentum if the interest rate for home loans was brought down to single digits, he said.
At present, the interest rate on home loans ranges from 11 percent to 13 percent.
Bhuiyan went on to commend the slash in registration fee to 11 percent from 14-16 percent of a property’s price
In another positive move, the central bank last month raised the home loan ceiling to Tk 2 crore from Tk 1 crore and also allowed banks to provide loans up to 70 percent of the property price.
