Housing sector crumbling mired in problems
The country's private housing sector is working as the development partner of the government for meeting the basic needs of the people, but it has been struggling for the last few years.
Experts say shelter is one of the basic needs of human beings and a constitutional right of a citizen. The right to live in own house or to have shelter is a fundamental right of the people and it is nationally and internationally recognized.
They said that the demand for housing facilities in urban areas in developing countries like Bangladesh is increasing due to population increase and its fast growth rate.
According to sources, the private real estate firms have taken initiatives to ensure optimum use of land in a planned way and provide housing facilities like houses, residential apartments and commercial flats in the last few years. They have been providing housing facilities to all sections of the people, the rich and the middle class at economic, competitive and affordable prices.
The sources say, the business of the private housing sector across the country has declined by 80 per cent while the rate of taking up new projects has fallen by 90 per cent. If this trend continues, the housing sector will face an extreme threat and some 35 lakh workers of 269 linkage industries of the sector will lose their jobs.
An amount of Tk 76,000 crore has been laundered abroad in 2013 as there is no scope to invest the undisclosed money in the country.
Besides, the sector's demand for a refinance loan fund of Tk 20,000 crore with a single digit interest rate has not being made available.
The businessmen said that although 'eight' problems of the housing sector have been identified, no solution of this could be found. The housing businessmen are demanding exemption of VAT and taxes of the developers at the source for five years, unconditional scope for investment of undisclosed income for 10 years, introduction of credit facilities to a single digit interest rate on installments over 32 to 35 years, raising of Tk 20,000 crore funds, reduction of registration cost and formulation of a realistic detailed area plan (DAP) in the coming budget.
Real Estate and Housing Association of Bangladesh (REHAB) president Shamsul Alamin told the Daily Observer, due to some problems in the housing sector policy real estate business is going through a crisis for a few years. The lack of long-term debt interest for large scale buyers, permission of gas-connection and easing solar power-related conditions are affecting the housing sector greatly, he added.
REHAB President said it is necessary to raise a Tk 20,000 crore credit fund for low income and middle class purchasers and reintroduce the refinancing of loan at a single digit interest.
Sources said foreign investors are facing numerous hurdles in investing money in the housing sector.
Though Bangladesh has exciting market for housing, the government is not allowing foreign loans in the real estate businesses, which forces the foreign investors to limit themselves to small investments.
Meanwhile, Iqbal Hossain Chowdhury, Chairman, Jams Group, said foreign investors are facing difficulties in investing money in the real estate sector in the country.
According to the sources, presently the demand for residential real estate unit is rapidly increasing in the country. The population in Dhaka is increasing very fast. This rapidly increasing people need more housing facilities. Increase in house rent implies that people would become less interested to stay in rented houses and would try or tend to buy homes.
In the first decade of 21st century, the price of per katha land increased unbelievably almost all over the capital city. Compared to the price increase of the earlier decade, the percentage increase in price almost doubled and in some areas it is more than three to ten times more than the earlier price.