Post: Bangladesh’s Real Estate Sector: Current Crisis, Potential, and a Roadmap for a Sustainable Future

M. K. Anawar Hassan CEO, JAMS Construction Ltd. The housing or real estate sector is one of the key drivers of Bangladesh’s economy. Alongside its direct contribution to the Gross Domestic Product (GDP), this sector maintains vast employment opportunities and economic momentum through linkage industries such as cement, rod, brick, tiles, and various other fittings. However, due to recent global economic recessions, inflation, policy changes, and political instability, the real estate sector stands at a complex crossroads of crisis and potential. Current Market Situation and Key Challenges The country’s real estate market is currently experiencing a slowdown. Following the Russia-Ukraine war and subsequent global crisis, prices for construction materials—including rod, cement, and brick—have skyrocketed. Added to this is high inflation, which has severely reduced the purchasing power of the middle and upper-middle classes. With rising bank loan interest rates, both buyers and developers face tough challenges. Working capital costs for developers have escalated, and buyers are finding it increasingly difficult to meet home loan installment payments. Furthermore, complexities surrounding the Detailed Area Plan (DAP), new building codes, and red tape have caused longer delays than expected in obtaining approvals for new projects. Coupled with sluggish sales, delivering projects on schedule while maintaining flat quality has become a major test. Potential Investment Zones and Market Transformation Due to severe land scarcity and soaring prices in Dhaka, the housing sector is shifting toward decentralization. Areas adjacent to the Kuril-Purbachal Expressway, expanded parts of the Bashundhara Residential Area, Jolsiri, Uttara Phase 3, and Mirpur and Uttara regions connected by the Metro Rail currently hold the highest potential. Thanks to the convenience of the Metro Rail, buyers now feel comfortable purchasing apartments slightly outside the main city center, provided those locations offer good connectivity. Simultaneously, outside Dhaka, demand for commercial and residential properties is rapidly rising in divisionally and economically important cities such as Chattogram, Mymensingh, Sylhet, Cox’s Bazar, and Rajshahi. In the tourism hub of Cox’s Bazar, service apartments and resort properties have already opened a new horizon for investment. The Role of PropTech and Technology In the modern real estate sector, ‘PropTech’ (Property Technology), Artificial Intelligence (AI), and digital marketing are revolutionizing traditional systems. Buyers can now inspect properties through virtual tours from the comfort of their homes. Using AI-based data analytics makes it easier to accurately calculate future market value, investment advantages, and Return on Investment (ROI) for any given area. Increased transparency through digital platforms has reduced fake advertisements and misleading information, helping build trust between buyers and developers. Secondary Properties and Buyer Caution Alongside the primary market (new apartments), the secondary or resale property market in Bangladesh is growing stronger by the day. Due to the availability of ready-to-move apartments at affordable prices, many buyers are turning to secondary properties, which plays a crucial role in maintaining capital flow in the market. However, buyers should exercise maximum caution when purchasing land, apartments, or commercial properties. Prior to purchase, three main areas must be verified: Legal Documentation: Check whether CS, SA, RS, and BS Khatian, mutation, DCR, and land tax receipts are up to date. Approvals: Inspect RAJUK or local authority-approved plans, alongside overall structural and piling layout designs. Developer Reputation: Verify REHAB certification and review the developer’s past track record. Balanced Projects and the Need for Government Support The key to a successful and profitable housing project lies in striking the right balance among affordability, quality, and environmental sustainability. By adopting Green Housing practices, solar power usage, proper waste management, and maximizing natural light and ventilation, projects can increase their longevity while reducing long-term operational costs. To ensure the sustainable development of this sector, isolated actions are not enough; active government policy support is essential: Home Loans and Interest Rates: Establish long-term housing loans with single-digit or low interest rates, offering special incentives particularly for first-time home buyers. Reduction of Registration Fees: The current property registration and tax structure is extremely complex and expensive. Lowering these to a reasonable level will reduce the use of undisclosed money and increase total revenue collection. Single-Window Clearance: Arrange for a single-window system to issue clearances from all utility service agencies (including RAJUK, DESCO, WASA, and Titas) under one roof. This topic has been widely discussed in the sector for a long time, yet no government has taken effective measures to implement it—even though it was never an impossible feat.