The Real Estate and Housing Association of Bangladesh (REHAB) on Wednesday submitted a two-point proposal to the government, including a stimulus package announcement, to revive the country’s struggling real estate and housing sector.
A delegation of REHAB, led by its president Nasrul Hamid, MP submitted the proposals before the Finance Minister at his secretariat office.
The proposals comprise formation of a Tk 3,000 crore fund for lending long-term credit to the low- and mid-income buyers at a single digit interest rate on an urgent basis as the real estate sector has plunged into a deep crisis due to the current volatile political situation.
The developers also sought rescheduling of their existing bank loans having a one-year grace period without down payments.
REHAB in its proposal cited that now the sale of flats and plots has declined by 60 percent while undertaking of new projects by the developers declined by 75 percent.
After putting forward their proposals, REHAB president Nasrul Hamid said that following a Bangladesh Bank circular identifying the real estate and housing sector as a non-productive sector rather an industrial one, the banks and other financial institutions are not financing the countrywide some 1,200 developers over the last one and a half year.
He said the low and mid-income buyers are now being discouraged to buy flats due to the high cost of financing.
In this connection, Muhith said there is a need to sit with the country’s economists and planners to term whether the real estate sector is productive or non-productive. “The matter demands consideration and I’ll have to sit not only with the Bangladesh Bank, but also with the economists and planners and I’ll do it shortly.”
He, however, turned down the REHAB proposal to form a Tk 3,000 crore fund for lending credits to the low- and mid-income buyers. “Fund with single digit interest would never happen and don’t expect it as our people have been get used to with the high interest rates,” Muhith added.
The Finance Minister said the immediate necessity is now the rescheduling of the existing loans of the realtors.
He observed that had there been no setback in this sector, the housing and real estate sector could have emerged as an important sector in the next two years like any other developed countries in the world even like India.
According to data provided by REHAB, the number of unsold flats is currently about 22,572 with an approximate value of Tk 21,506.36 crore. The number of flats the handover of which remained pending is 7,014 worth Tk 773.28 crore.
According to a survey carried on unsold 332 apartments, the REHAB president said, the unpaid loans by the realtors now stood at over Tk 4,181.48 crore while the amount would cross Tk 8,000 crore if the entire sector is taken into account.
REHAB submits 2-pt proposal to govt