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Urbanization is an outcome of both population growth and rural-urban migration. As urbanization increases, more and more people are becoming city dwellers. Bangladesh is not any exception to that picture. In Bangladesh the problem of urbanization is further aggravated by limited supply in urban areas, lower utilization and lack of proper planning and land use policy. As globalization increases, the process of urbanization increases. It has momentum urbanization both in developed and developing countries. The ever-increasing urban population is creating an increasing demand for shelter. The right of shelter is a fundamental right, which is ensured by both UN declaration and constitution of Bangladesh. But being a government of a poor developing country, it is almost impossible on the part of the government to ensure housing for all. As public sector failed to ensure their right, people have taken their own initiative to ensure their fundamental need of shelter. Private sector and real estate companies both are working together hand in hand to quench the ever-increasing thirst of people for shelter. Dhaka, the capital of Bangladesh, is facing more acute housing problem than any other cities of the country. This paper is an attempt to observe how private developer and real estate companies are contributing to dislodge the housing problem in the urban areas of Bangladesh with special reference to Dhaka and to provide some guideline for sustainable development of this sector.
Real estate is a large and important sector in Bangladesh. It is therefore necessary to analyze the overall situation of the business with a view to maximize the benefit therefore. This study helps to portray the situation to some extent.
Financing is a great concern for real estate business. The major sources of financing are BHBFC & Commercial banks etc. The demand for BHBFC loans, increases in demand for BHBFC loans, housing units constructed by BHBFC loans, commercial banks housing loans etc. The report on “The problems and prospects of real estate industry in Dhaka as a capital city” helped to categorize the projects according to their nature, zone, price, size, units, key feature & forecasting the growth of real estate development etc. Government, private sectors & NGOs play a pivotal role in rural and urban housing. Among the considerable factors, space housing loan terms, sanitation, water supply and sewerage facilities are the key factors. 1. Introduction 1.1. Statement of the research problem
Overall The objective of this report is to learn about the problem & prospects of the real estate industry in Bangladesh perspective. 1.1. 1. Specific a) To identify the necessity of housing.3.3.1. f) To identify the problems faced by the real estate companies. g) To find out the problem of this sector. d) To have an understanding of the activities of the company.3. Those data and information is collected from various sources. Objective of the study 1. price. Research Design and Methods 1. Secondary sources a) Relevant books. promotion. primary sources and secondary sources: 1. such as.2.1.3. Primary sources a) Personal observation b) Based on sample survey through questionnaire 126.96.36.199. place.2.2. e) To understanding the marketing objectives: product. c) To evaluate the overall situation of real estate business.1. b) Annual report of REHAB c) Internet d) Newspaper . This report allowed us to combine our bookish knowledge with real life practice among the construction companies in Bangladesh. Data source Different data and information are required to meet the goal of the report. journals. booklets from REHAB etc. development and others.2. b) To find out the government role for planned urbanization.
summary and activity chart: (i) Activity chart: Activity Major Activities Duration (Days) 1 Preparatory Planning 5 2 Literature Survey 7 . c) Builtech Megamart Ltd. and ongoing projects and so on.1.2. Both descriptive and inferential statistics will be used in the analysis. which will be useful for the policymakers to make decision for investment.3. Sample selection The sample (top 5 real estate companies) has selected from its 200 companies (Approximately). 2008 (11) Work plan.5) Data analysis: After data collection. A segmentation of the respondents will also be made based on the company activities. such as: service provided to the customer. (10)Duration of the project: • Proposed date of the commencement: October 11.2. Incomplete and biased data will be sorted out and deleted from the data (real estate) company. financial condition. d) Design Den Ltd. b) Shahid Engineering Co. a comprehensive conduction procedure will be followed. 2008 • Proposed date of completion: December. 1. Ltd. improve the service quality in this sector. service provided to its subscriber and so on.3.1.3. e) Pacific International. The names of the companies are: a) Emerging Power Ltd. 9) Expected outputs/benefits: Identification of the factors prospectus. Questionnaire design and data collection (8. Sample design 1.2.2.
based on an annual survey conducted by Sheltech. especially in Dhaka. are some of the more prominent causes. indicates a disturbing slump in the number of apartments sold in Dhaka last year. Literature review The real estate sector is often used as an indicator to measure a nation's economic growth.6.4. One of the main reasons behind this drop. According to Toufiq M Seraj. many predicted the housing industry to be the next golden sector of the country. the sale of apartments dropped by almost forty percent last year. an assessment of the sector. is the fast. Scenario regarding the main topic of the report in Bangladesh . The housing industry in Bangladesh.3 Training of the Interviewers 3 4 Field survey 20 5 Data entry and analysis 8 6 Draft report 5 7 Final report 7 (ii) Activity chart: Activity No. However. With apartment-sale charts consistently displaying positive curves. Activity Chart(Daily) 1234 1-15 Research design 16-35 Field survey 36-47 Analysis of data 47-55 Final report (12) Budget backup: 1.5. the high influx of developing firms and the increasing rates of construction materials. in the last five years. Flourishing economies in China and Dubai for instance. Limitations of the study 2. one of the leading Real-Estate firms of the country. “The cost of flats in Bangladesh is now one of the highest in the world and is completely disproportionate to the country's falling economy. 1. Definitions of terms used in the study 1. has made remarkable progress in the last ten years. MD of Sheltech. are represented by booming real-estate markets. he claims.” While there are several reasons behind the mounting price-rates of the flats.increasing price rate of the apartments.
” he says.” he exclaims. A similar fate awaited Dr Mamun. Their approvals are impossible to get unless you bribe them. says that although RAJUK plans a 'one-sit agreement' where all the approvals could be agreed upon in a meeting with the respective heads of the departments. He adds that taking a bank loan was not an option due to the high interest rates. rods etc. electricity etc. This eventually led to an increase in prices of raw materials like cement. Apart from covering costs incurred due to economic reasons. 2. After which they meet the developers separately and come to an agreement. according to Farhad-uz-Zamman. Unlike Robin and Mamun. Bulding Technology and Ideas Ltd. “Four years ago.” explains Seraj. had booked his flat in 2005 and considers himself extremely lucky to have bought an apartment at the right time. environment. For 34-year-old Robin Akhtar. “Honestly speaking the current scenario in the real estate sector is not too good. A former official of Rajdhani Unnayan Katripakkha (RAJUK). The prices of flats here are almost similar to the apartments in Canada.” said an official of a real estate firm who preferred to remain anonymous. Officials of real estate firms claim that developing companies are forced to bribe government officials in order to get their approval. “Every department raises objections during the meeting. the economy was in a very bad state. the sector also witnessed the entry of several developing firms guilty of accepting housing projects at high prices and eventually contributing to the increasing cost of the apartments. Loan requests from developers and firms are being rejected every other day. Booming Prices “After 2007. MD. Eastern Housing. “Today there are more than a 1000 developing firms in the city.2. firms also reserve a portion of their budget in order to adhere to governmental legislations. when asked about these occurrences. another reason behind the galloping price rates in the city. The over-dependence on the Real Estate sector.1. According to Mustafa K Mujeri. “It's difficult to afford an appropriate apartment in a good area with my budget. a banker from Dhanmondi. Apart from increasing costs of construction materials.” he says. an employee at a telecom company. Dissatisfied Customers While a combination of the above mentioned reasons continue to increase the prices of apartments. as he arrived in Dhaka with an aim to buy a suitable apartment for his family. it never works. the cost of the very same apartment is more than Tk 1 crore! That's just ridiculous. I planned to buy an apartment for around Tk 25 lakhs. Today. Shihab-ud-din. Marketing Manager. a non-resident Bangladeshi from Canada. “The rules laid down by RAJUK states that we need to get approvals from several departments: traffic.” he says. but I didn't have the necessary funding. the vicious increase in the prices of flats has made it almost impossible for him to buy an apartment of his choice. the increased levels of uncertainty .” explains F R Khan.” he explains. former Chief Economist of the Bangladesh Bank. “Just like the other metro-cities in the world. the government should take some steps to decentralise Dhaka. has increased the demand for flats. but only 20 of them can be considered professional.2. a large section of dwellers remain dissatisfied. without which they cannot continue their projects. He further said that the costs incurred due to the above mentioned approvals also contribute to the prices of the apartments.
the unavailability of gas and electricity have surged the sales of ready-made apartments. various linkage industries have suffered dramatic declines in their sales over the last few years. contributed to the sudden 'jump' in the price.” says Bhuiyan. “ This business started in 2006. the number of firms in this business have increased.rate of apartments after 2008. Contrary to the situation of the various linkage industries.” claims F R Khan. Markets linked to the real-estate sector such as the tile shops have been affected by the lack of sales. who works for Flatbazar. Marketing Manager of Arman tiles. 2. there has been an increase in the number of firms dealing with such flats. According to reports. The Rise and fall of the linkage industries The recent developments in the housing sector have affected more than just the buyers. “It is impractical for the government to expect us to re-design our flats to suit the new rules that have been enacted. The forcible presence of solar materials in housing projects has caused various financial problems for developers. According to Fazlul Karim Bhuiyan. “A number of developers who have already ordered tiles from us can't afford to pay us since not many flats are being sold. now however.3. Making changes in flats that have already been built will cost extra money and our customers won't be willing to pay more than what they agreed to. “There are more than 20 lakh people working in this industry and the survival of their livelihood depends upon these apartments. the availability of gas and electricity have encouraged people to invest in such .” Apart from increasing prices.amongst investors during the caretaker government's reign. Thus investors tried to recuperate for the losses that took place during the emergency period. a firm specialising in the sale of used-apartments. the glass and furniture markets in Dhaka have taken a hammering due to the decline in sales. inconsistency in the provision of utilities like gas and electricity has also hampered the sale of apartments. They aren't even getting bank loans to continue their projects. low-emission and solar control glasses in order to increase their revenue.” explains Farhad-uz-zamman. “The yearlong intervention by the caretaker government discouraged business. the report states that several glass industries are now planning to produce 'tempered. sales have dropped by over 60 per cent in this year. Forced to adapt to the new situation. According to Mushfiqur Rehman. at that point of time there weren't many firms selling ready-made flats. mainly due to the unavailability of the necessary utilities. A new law requires the use of a certain percentage of solar energy in order to receive the electricity-approval for a housing project. 2011 states that the sales of glass manufacturers have been affected due to the new rules that have been enacted for the provision of electricity in the upcoming apartments. He further said that although there wasn't much of a difference in terms of the costs of these flats. A similar depression took place in the tiles industry as the demand for tiles decreased due to the slump in the sale of apartments. A recent report published in the Daily Star on December 11.” explains Rehman. The provision of gas lines have been stopped in many apartments with dwellers being compelled to depend on gas cylinders.
2. “It's a criminal offence and legalising it can further de-stabilise the economy. “The heavy losses incurred by potential buyers. several developers claim that if the undeclared wealth is not used in the real estate sector in Bangladesh. “The main areas in Dhaka are almost full. The re-enactment of section 19B of the finance act which legitimises undeclared wealth by investing in the purchase of apartments after having paid a certain amount of tax. “I don't think the law will benefit the economy since it doesn't provide a level-field for investors.apartments. “The usage of undeclared wealth will help the real estate sector by stimulating cashflow. discouraged people to invest in the real estate sector.” he says.” he explains.” explains Khan. KAM Harun. according to firms. so if someone wants to shift to a specific area.” explains Khan. . the provision to invest undeclared wealth in the sector was a necessity. The provision which was abolished after 1/11 has. has left very little money in the system. the money will go to real estate developers abroad. is one such law that developers in the city have been vouching for. he has to come to us. the ex-chairman of RAJUK.” says Mujeri. Supporting the enactment of the law. Responding to the claims of the finance act. He says that in order to maintain the flow of cash and support the twenty lakh people working in the Real Estate sector. Undeclared Wealth: To be used or not to be used? With the increased prices and the utility-inconsistencies creating a negative trend in the sales charts. developers have looked towards the government for legislations that would support the Real Estate sector. Officials against the clause argue that one of the main reasons behind the fast-increasing land price of Dhaka was the enactment of the very same clause which was legitimate from 1999 to 2007. states that the re-enactment of such a law would be un-democratic and would send a completely wrong message to the future investors of the country. in other sectors.4. and people who have money won't come forward since they have to declare their source of income.
several steps are being taken in order to maintain the market. . the real estate sector is in trouble. are indicators of the desperate measures taken by developing firms in order to survive in the market. developers hope that the government can strategize a 'bailout' plan in order to support the sector. be it through the falling linkage industries or through the distant dreams of the middle-class to be able to afford a decent home in their own backyard. the common man faces the music.5. The current scenario is simple.2. With the situation getting worse with time. Some of the suggestions provided by developers include the smooth working of the processes laid down by RAJUK. the one thing that overshadows all the above reasons is the fact that the housing industry in Bangladesh breeds corruption. The Future of Real Estate With firms in the real estate sector expecting difficult years ahead. As Haroon puts it.” The downfall of the real estate sector has taken place due to a combination of factors and it will take a while before the sector can re-group from such a setback. keeping aside the nitty-gritty economic details. “Real estate companies often don't adhere to the plan that they submit to RAJUK. However.” says Seraj. the suspension of 21 housing companies last month and the fact that RAJUK has rejected a number of plans with respect to plots located in outer Dhaka. selling of plots at cheaper rates and the provision of bank loans at cheap interest rates. Sometimes they don't keep the required open spaces. “We might have to compromise on luxurious flats in the future and build apartments that are more affordable to the buyers. or build buildings instead of mosques or other structures etc. And while the real estate sector and the government continue to play the blame-game.
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