Over the last 15 years the Real Estate development sector has made significant contribution to many sectors of our economy.
- 1200 families homes has created since 1985 in Metropolitan City
- 1000 acres land development for housing (For lower middle and middle income families)
- Construction materials purchased Tk. 1000 crore
- 1200 construction worker employed by RE and pay Tk. 45 crore annually
- Professional development and pay Tk. 2 crore annually (Architect, Engineers & Others)
- 5000 management staffs (Accountants, Supervisors) and pay Tk. 25 crore
- VAT pay approximately Tk. 150 crore from 1993
- Cement manufacturing industry get impetus by RED
- 2500 diploma engineer are engaged in the sector
Lack of Government policy or cooperation as for example:
- In 1989 the ministry of industries declared construction of residential complexes on commercial basis as an industry. However, today this notification from the ministry of industries is not recognized by the National Board of Revenue. Therefore this sector is not entitled to any benefit of industry.
- Transfer fees of stump duty, highest in the world. In Metropolitan City 22% of total value paid by the purchaser as fees.
- Housing is one of the basic needs and in almost all development countries 90% of the value of the property can be borrowed from the government financing institutions.
- Only for middle and higher income groups
- Destroys the harmony in sky line
- Increase pressure on limited services
- Traffic and public problems
- Creation of air and light circulation
- Lack of community space
- Socio-psychological problems
- Located/Clustered in and around CBD of Dhaka city
Some current problems on Real Estate Development
- Different embargoes on high rise construction
- In appropriate rules of housing development
- Harassment of environmental directorate for environmental clearance
- Lack of coordination between utility and agencies
- Procedural delay in plan approval
- Procedural delay in registration and transfer
Summary recommendations to boost Real Estate sector:
- Coordination among all the concerned agencies including utility agencies must be ensured
- For RAJUK approval of drawings, one window service need to be established
- Government land can be allotted to the developers at government land price
- Registration fee and procedures for the government and non-government land should be similar
- There should be a law which ensures the implementation of DMDP Master Plan and Bangladesh National Building Code (BNBC) in 1993
- Law and order situation should be drastically improved, so that terrorist activities do not occur in the site Building construction rules 1995 of RAJUK and other Metropolitan City needs to be totally reviewed
- Institutional credit facility must be increased at a lower rate for low income households to promote housing for fixed income families
- Representation of REHAB in decision making in RAJUK, WASA, DESA, TITAS and other concerned agencies.
Problems & prospects of Real Estate business in Bangladesh
- Background information:
- Dhaka heritage 400 years old
- Last four decades recorded tremendous growth in population and area
- 3.5 million in 1981, 5.7 million people in 1991 within 171 sq. miles
- Population will be 10 million by 2001
- Housing problem acute; continuous deterioration of service facilities
- Huge housing backlog; according to World Bank in 1981, 1.9 million housing units for 11.8 million urban population
- Pressure on build able residential land is very high
- High land price, 60%-90% consumer price index during 1974-1987
- Housing in Dhaka City: Public and Private performance
Public sector housing (Performance):
- Little success, supply less than effective demand
- Large investment goes to benefits of the upper and middle class of people
- Public Works Department (PWD), Housing & Settlement Directorate (HSD) are construction agencies for government accommodation
- According to World Bank in 1981, only 7% of total housing stock was built by public sector and rest by the private sector
- Housing development in the form of apartment development
- Individual or company construct one or more buildings
- Increase in real estate companies
- 20 years before buyers reluctance to purchase apartment
- Increase in cost of land and construction
- Wage income earners in middle east & other countries
- Because of return influence, many apartment builders have come up in the market
- In 1988, 20 developers engaged in
- 20 companies developed about 5000 new building units in 1990.
- Considerable contribution for increasing the housing stock in
- Prospects:
- Delivered housing facilities to the urbanities
- Utilization of minimum land
- Planned residential development
- Better environment
- Employment opportunities
- Tax return higher
- Positive effects on city
- Form and design of city
- Problems of Real Estate Business:
- Only for middle and higher income groups
- Destroys the harmony in sky line
- Increase pressure on limited services & lack of community space
- Traffic and public problems
- Creation of air and light circulation
- Socio-psychological problems
- Located/Clustered in and around CBD of Dhaka city (Why?)
- Easy access
- Proximity of supporting facilities of office
- Higher rate of return on investment
- Recommendations for Real Estate business:
- No magical solution to solve the housing problems
- High rate of population growth as well as high land value, apartment development should be encouraged in the future development
- Walk up (5-6) storied apartment should be encouraged
- Co-operation among the service delivering agencies
- A private housing bank should be established
- Proper rules and regulations for high rise construction
- Zoning law for
- Lift, park, community, fire-fighting etc. should be provided
- Loan, short and long term credit for housing construction
Is the situation you described positive to the reduction of poverty or favorablle for the demand of low income housing?
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