Property sector becoming more optimistic of a rebound

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Bangladesh's real estate 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 federal government has allowed the utilization of untaxed income to get land or apartments as the reduction in registration costs makes this the perfect time to invest in property at reasonable costs.

However, the country's realtors also said that apartment prices could eventually increase as a result of rising cost of raw materials and delays in project implementation.

"We had feared that we would face difficulty in surviving the pandemic following a drop popular for housing amid the unprecedented economical uncertainty due to the Covid-19 fallout," said Alamgir Shamsul Alamin, president of the Real Estate and Housing Association of Bangladesh (REHAB).

However the situation is bettering alongside the increase of monetary activities, he added.

Soon 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 in line with health and safety guidelines to prevent further outbreaks.

As such, developers have already been forced to recruit a smaller number of personnel to maintain sufficient social distancing at projects which, in turn, is triggering delays in the handover process.

Not merely is this a hassle for the client, but it addittionally inflates the production charges for the developer, Alamin said.

Certain realtors may not even have the ability to reach a breakeven point on the investments, according to the REHAB president.

Meanwhile, a lot of the country's burgeoning middle-class, an integral demographic for the true estate industry, cannot afford housing at current rates.

"Therefore, the federal government should undertake topical policy measures that would 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 belonging to 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 want to tackle the crisis," Alamin said.

The sector got a go in the arm in July this past 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 rather than make money, 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 rules on investing untaxed income in property slightly benefitted the sector in the last two months as the reduced registration service fees are helping sales to recuperate 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 can be enjoying some relief because of a rise in instalment collection as the other economical activities are gathering momentum aswell.

"This can be the right time for those who dream of becoming householders in Dhaka to buy an apartment as realtors need liquidity to recuperate from the pandemic," said Md Sirajus Saleken, head of mortgaging at IPDC Finance, a major 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 will also come forward with their own offers.

The non-bank lender funds around a dozen well-reputed realtors for mortgage loan borrowers.

Houses in the Uttara, Bashundhara and Mohammadpur areas have the best demand, said Mark Nosworthy, chief executive officer of bproperty, the largest online real estate broker in Bangladesh.

These areas constitute about 35 % of the full total demand for 2020.

If the sector recovers, its allied industries, which there are 230, may also benefit, according to industry insiders.
Source: https://www.thedailystar.net

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