Real Estate Sector of Bangladesh

Topics: Real estate, Apartment, Public housing Pages: 11 (3374 words) Published: July 19, 2012
History of Real Estate in Bangladesh
The urbanization of Bangladesh is quite similar to that in Latin America; formerly called “over-urbanization” in 1950s, this is a situation where a rapid rate of urbanization does not lead to corresponding growth in industry and economy but results in a shift of people from low-productivity rural agricultural employment to low-productivity urban employment or underemployment. The major cities of Bangladesh exhibits the clearest symptoms of over-urbanization, where an imbalance between rapid population growth and insufficient employment opportunities led to an increase in poverty and the mushrooming of slum and squatter settlements (Valladares, 2002).

In Bangladesh, the problem of urbanization is further aggravated by limited land supply in urban areas, lower land utilization and the lack of proper planning and land use policy. The ever-increasing urban population is creating an increasing demand for shelter. Bangladesh has one of the lowest land-person ratios in the world. The situation is further worsened every year through an irrevocable reduction of per capita share of land for housing, as a result of continuing population growth. Acknowledging the importance of housing, which is one of the five basis needs incorporated in the constitution of Bangladesh, the government is compelled constitutionally to play a vital role in securing housing rights.

Industry Profile
Dhaka City, born during the Mughal Empire and grown with the British rule, is expanding rapidly. From the beginning of the 20th Century, its growth and latter development is marked with sheer lack of proper and far-reaching planning. The impact is now being felt at the end of the century. Dhaka City is undergoing terrific growth phase throughout the last two decades. While there are so many real estate developers in the market, there are also very few of them who have maintained the quality, safety and customer preference. It is customary in the country that the first day quality and impression is lost after a while when people start getting a bit of familiarity. This happens mainly due to lack of professionalism. Sometimes the consumers here are in a fix to choose a particular brand out of many.

A good number of real estate companies are working under one umbrella association named 'Real Estate and Housing Association of Bangladesh' (REHAB). Almost 361 Companies are at present affiliated with this association, while more than 400 companies are working independently. Building Technology & Ideas Limited (BTI) took a leading role in the formation of the industry association and is one of the founder members of the REHAB.

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Growth of Real Estate Sector in Bangladesh
The economic performance of Bangladesh has provided strong impetus to the real estate sector, which has been witnessing heightened activity in the recent years. Substantial end-user and investor interest, large scale investment in infrastructure and rapid urbanization have contributed to the growth trajectory of real estate In Bangladesh. The real estate growth story is clearly visible in urban areas. High growth in services as well as manufacturing sector has resulted in high demand for commercial and industrial real estate. The following table shows the important factors which are forcing the real estate sector in Bangladesh.

Demand Pull Factors  Robust and sustained macro economic growth Resultant Impact  Increasing resident base Supply Push Factors  Policy & Regulatory are going to be reformed such as flexibility of foreign direct investment  Positive outlook of global investors Resultant Impact  Easy access to mean of project financing

 Upsurge in Industrial & Business activities, esp. new economic sectors

 Significant rise in demand for office/industrial space

 Entry of number of domestic & foreign players increasing competition & consumer affordability  Increases developers risk...
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