BANGLADESH DHAKA

URBAN RESEARCH SERIES REPORT

CHAPTER OF REAL ESTATE

2017
CONTENT

FORWARD REGION SURVEY CURRENT SITUATION OF CONSUMER

REAL ESTATE MARKET QUESTIONNAIRE

06 Conversion Table and Editorial Committee 12 Macro Economy of Bangladesh 26 General Introduction of the Real Estate Market in Dhaka 48 Getting to Know the Consumers

08 Research Institute 16 Development Plan of Bangladesh 28 The Real Estate Market in Dhaka: Land 50 House Purchasing Pattern

18 Tourism of Bangladesh 34 The Real Estate Market in Dhaka: Product 52 Preferences and Demand

20 City Development of Dhaka 36 The Real Estate Market in Dhaka: Exploitation 54 Household Income and Loan

40 The Real Estate Market in Dhaka: Developer

42 The Real Estate Market in Dhaka: Real Estate Association

44 The Real Estate Market in Dhaka : Finance

01 02
 Part 1
PREFACE
 ABOUT
THE REPORT

Purpose of the Report

The report mainly introduces the general condition of the Peoples Republic
of Bangladesh, especially the real estate market in its capital Dhaka. The
report also covers general conditions of the different parts of the real estate
market in Dhaka and their development trends in recent years.

With nearly two governments of Bangladesh advocating the implementation

of the market economy, privatization policy, improving the investment
environment, vigorously attracting the foreign investment, actively creating
export manufacturing district, a good political environment has been
provided for foreign enterprise investing in Bangladesh market. UBI also
helps expand the oversea market for local enterprise in Bangladesh.

Therefore, the report is jointly complied by UBI-Urban Bangladesh

Institute and HDD. By comprehensive elaboration and analysis, the report
is to provide professional research support for enterprise and personal
investment on the city development of Bangladesh.

UNIT CONVERSION TABLE

CURRENCY CONVERSION TABLE

100 BDT = 1.275 USD
1 BDT = 0.0865 CNY
1 USD= 6.7965 CNY
1 Lac= 100,000 USD
AREA CONVERSION TABLE
1 Katha = 66.89 m
1 Acer = 4046.86 m
05 06
RESEARCH
INSTITUTE

UBI- Urban Bangladesh Institute Committee Member

UBI is a think tank institute founed by governmental and non-
governmental organizations in Bangladesh. It is a non-profit [Director]
and cross-industries organization with services that covers the Gerhy Tsui
entire nation. UBI aims to unite professionals and scholars
in architecture, real estate and urban studies, and apply their [Consulting Team]
expertise and knowledeg into pratice. By integrating academic Muhammad Hussain Bhuyan Hugo Day Sophia Yang
research and economic development, UBI ser ves as an Wilda Xie
advisor and think tank that will facilitate urban and economic Qixiang Zhu Chen Chen Qingqing Sui
development of Bangladesh, and boost its urbanization
progress. [Supporting Institutes]
Urban China Research Centre (UCRC)
Huadu Architecture and Planning Design Ltd. of Bangladesh

07 08
 2
Part

07
REGIONAL 08

SURVEY
REGIONAL SURVEY:
MACRO-ECONOMY

General Information of the People's

Republic of Bangladesh
Location: South Asia, the total land area of Bangladesh is
147.57 thousand square kilometers, the coastline is 550
kilometers;

Population: By 2013, the total population was more than

0.15805 billion; the population density was more than 1100
people per square kilometers; Bangladesh's population
density is the highest among countries with its large
population (with a population over 50 million)

Economic development level: according to the 2014

statistics of World Bank, the GDP of Bangladesh was 173.8
billion dollars; per capita GDP was 1096 USD; The GDP is

As one of the most densified

equivalent to that of China in 1986.

Growth Prediction
Bangladesh grows at a rate of 5-6 in city development; so
countries,Bangladesh has a large
far, there are 28% of population living in cities, and the
population will reach 34% in 2025; labor market.
Preliminarily estimated, there are 5 million sets of housing
shortage in Bangladesh; in cities the housing sets increases
by 500 thousand per year, while in the rural areas the
housing sets increases by 3.5 million per year. (World Bank
Document, 2010);

Therefore, in the next 20 years, Bangladesh needs

about 4 million sets of housing to fulfil the housing
demand every year.

11 12
REGIONAL SURVEY:
MACRO-ECONOMY

The Overall Economy of Bangladesh Demonstrates a Growing But Unstable Trend

In the recent decade, the overall economic development of Bangladesh has seen relatively higher speed, but greater
volatility, due to the domestic turbulent situation.
In the recent two years, the economy has stayed at a development level of more than 10%, which indicafes the potential for
future city development is growing.
In the recent decade, per capita GDP of Bangladesh grows rapidly with a trend almost equivalent to its national economy. Its
overall economic level amounts to Chinas in 1994-2004.
2000 Figure 1 The national economic statistics of Bangladesh in the recent decade 1738 20.0%

1500
1334 15.9%
15.1% 1286
1153
102511.9% 12.5% 12.4%
10.9% 916 11.5%
1000 796 10.0%
651 694 718
6.6%

3.4% 3.7%

0 0.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GDPUnit100million dollars Growing Rate

(Source: World Bank)

Figure 2 Per capita GDP of Bangladesh in the recent decade

2000.0 20.0%
13.9% 957.8 1096.6
14.5%
862.0
1000.0 543.69.6% 619.3 685.510.7% 762.811.3% 841.510.3% 11.1% 10.0%
461.0 485.2 495.8

0.0
2004 2005
5.2%
2.2%

2006 2007 2008 2009 2010 2011

2.4%

2012 2013 2014

0.0% The whole economic level of
Per capita GDPUnitdollar Growing Rate Bangladesh equals that of China
at the beginning of 21st century;
(Source: World Bank)

Fugure 3Per capita GDP of China in earlier decade

2000

821 865 949 1042 1135 1274

1490
1732
Bangladesh gets more stable and
rapid development in recent two years.
604 703
1000 469

0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Per capita GDPUnit: dollar

(Source: World Bank)

13 14
DEVELOPMENT PLAN OF THE SEVENTH 5-YEAR
BANGLADESH PLAN OF BANGLADESH

Bangladesh Vision 2021 Key Development Targets Income and Poverty 2,300MW by 2020;
E
 nsure energy mix for energy security
Making Bangladesh a middle-income and a high HDI I ncreasing and sustaining annual GDP growth rate to 8% Attaining
 average real GDP growth rate of 7.4% per year E
 lectricity coverage to be increased to 96 percent with
country by 2021, the Golden Jubilee Year of national by and 10% by 2017 and raising per capita income to US$ over the Plan period; uninterrupted supply to industries;
independence 2000; Re
 du c ti o n in th e h ea d - co unt p ove r t y r ati o by 6. 2 R educe system loss from 13% to 9%, improve energy
Graduating Bangladesh to a resilient democratic nation R educing the poverty headcount ratio to 15% by 2021; percentage points; efficiency & conservation;
Democratic culture A  chieve self-sufficiency in food by 212; Reduction
 in extreme poverty by about 4.0 percentage points; C onstruction of 6.15 km. long Padma Multipurpose Bridge
Right to information and free media T ransforming the sectoral composition of GDP with the Creating
 good jobs for the large pool of under-employed at Mawa-Janjira;
Independence of judiciary share of agriculture, industry and services standing at 15%, and new labour force entrants by increasing the share of C onstruction of about 26 km. long Dhaka Elevated
Gender balanced society 40% and 45% respectively by 2021; employment in the manufacturing sector from 15% to 20%; Expressway;
Food and energy secured country R eduction of unemployment rate 15%; C
 onstruction of Dhaka- Chittagong expressway and
Knowledge based society T ransforming the employment shares of agriculture,
Sector Development upgradation of Dhaka-Chittagong highway to 4-6 lane.
gender balanced society industry, and services to 30%, 25% and 45% respectively I mprove the multimo da l tr a nsp or t net work w ith a
Strengthening ICT towards digital Bangladesh by 2021; S
 ignificant growth in agriculture, industry and service significant increase in the share of rail and waterway traffic;
Protecting environment and meeting climate change E nsuring 100% net enrolment at primary school as soon as sectors; R educe urban traffic congestion with focus on Dhaka and
challenges possible after 2010; I ncrease the contribution of the manufacturing sector to Chittagong cities;
P roviding free tuition up to degree level as soon as possible 21% of GDP by FY20 R educe the incidence of road accidents
after 2013; S
 ubstantial improvement of exports to US$ 54.1 billion by FY20; C ompletion of the following highway Priority Mega
A ttaining full literacy as soon as possible after 2014; A
 chieving a Trade-GDP ratio of 50% by FY20. Projects: Padma Bridge, Deep Sea Port Project, MRT-
E nsure living accommodation for the entire population as 6 project; LNG terminal program, Payra Port Project;
soon as possible after 2015; Urban Development Rooppur Nuclear Power Plant Project; Rampal Coal Power
Supply of pure drinking water for the entire population as Project, Matarbari Coal Power Project;
soon as possible after 2011; I nfrastructural investment and civic facilities in peri-urban
Bring each house under hygienic sanitation by 2013; growth centres especially around Special Economic Zones; Environmental Sustainability
Eliminate all contagious diseases; I nclusive housing and other civic ser vices for urban
Increase life expectancy to 70 years by 2021; inhabitants including for people living in informal I ncrease productive forest coverage to 20 percent;
Reduce maternal mortality to 1.5%; settlements and slums; I mprove air quality in Dhaka and other large cities through
Raise the use of birth control methods to80%; I nclusive urban planning based on sustainable land use enacting Clean Air Act;
R educing infant mortality to 15 per thousand live births by planning and zoning; P
 romote Zero discharge of industrial effluents;
2021; I ncreased productivity, access to finance, and policy U
 rban wetland are restored and protected in line with
G enerating 11,500 MW by 2015 and 20,000 MW by 2021 support for urban micro-small and medium enterprises; Wetland Conservation Act;
and ensuring per capita energy consumption up to 600 A
 t least 15% of the wetland in peak dry season is protected
Kwh. Water and Hygiene as aquatic sanctuary;
5
 00 meters wide permanent green belt established and
Safe
 drinking water for all; protected along the coast;
Proportion
 of urban population with access to sanitary L
 and zoning for sustainable land/water use completed;
latrines to be increased to 100 percent; E
 nv ironmenta l , Climate Cha n g e a nd dis a ster, risk
Proportion
 of rural population with access to sanitary reduction considerations are integrated into project design,
latrines to be raised to 90 percent; budgerary allocations and implementation process;
C
 anals and natural water flows of Dhaka and other major

Energy and Infrastructures cities restored;

(Source: Perspective Plan of Bangladesh 2010-2021andVision 2021) I nstall Generation Capacity of electricity to be increased to (Source: Perspective Plan of Bangladesh 2010-2021andVision 2021)

15 16
TOURISM Tourism in Bangladesh is not
developed yet, relying on nature
resources and traditional buildings,
with rare foreign visitors.

Tourism in Bangladesh is not developed yet. Only 100 The government put emphasis on tourism development with
thousand foreigners visit the country (over 3 million foreign measures to push it.
visitors entered Hangzhou, China in 2014). In the next 10 years, tourism and investment will have higher
According to W T TCs statistics on 184 countries, total growth rate than the world average level. It is estimated that
contribution of travel and tourism in Bangladesh in 2014 is tourism of Bangladesh will grow 6.5% per year, higher than
$7.85billion, absolute size ranking 68th, relative size ranking 3.8%, the world average growth rate, ranking 12th.
168th, contributing 4.1% to total GDP of the country.

WORLD RANKING (OUT OF 184 COUNTRIES)

Relative importance of Travel & Tourisms total contribution to GDP

68
ABSOLUTE
168
RELATIVE SIZE
23GROWTH
12
LONG-TERM GROWTH
Size in 2014 Contribution to GDP in 2014 2015 Forecast 2015-2025 Forecast

FIGURE 4. TOTAL CONTRIBUTION OF FIGURE 5. BREAKDOWN OF TRAVEL &

TRAVEL & TOURISM TO GDP TOURISMS TOTAL CONTRIBUTION TO
GDP AND EMPLOYMENT 2014
2014 BDTbn GDP (2014 BDTbn)

1400

1200 132

1000 199
800

600 297
Employment
400
904
Direct
603
200
478
Indirect
0
05

06

07

08

09

10

11

12

13

14

15

25
20

20

20

20

20

20

20

20

20

20

20

20

Induced

Direct Indirect Induced = Total contribution of travel&Tourism

17 18
DEVELOPMENT OF The environment in Dhaka city need
DHAKA to be noticed when the city develop
rapidly.

Basic Information
D
 haka is the capital and biggest city of the Bangladesh.
It is also the capital of Dhaka administrative area, the
political, economical, cultural center of the whole nation.
A
 creage: 360 square kilometers. From 1951 to 2009,
the city acreage of Dhaka increased by 17.88 times, the
population increased by 25.09 times;
P
 opulation: over 15 million. The population density is 8111
people per square kilometers, which means 1% the land
acreage includes 8.3% the whole population nationwide.
A
 lso known as: city of Mosques, the capital of tricycle

Development Trend
S
 o far Dhaka is developing at an unprecedented speed,
accommodating more than 600000 every year, which
means it will provide housing for 120000 people (the
average number of households in Bangladesh is 4.8
person). But so far the city's housing supply is only 25000
sets per year.
6
 0% of urban housing in Dhaka is provided by private
developers.

19 20
DEVELOPMENT OF
DHAKA

Price Characteristics in Different A

 mong the 4 selected fringe areas, the
Areas highest price is only 0.006 Million Taka/Sq.
Meters ($76/m2), the lowest is below 0.015
M
 otiiheel locates in the city CBD, including million Tk./Sq. meters ($191/m2);
Wards 31-36 and several other plates. The L
 and price of fringe areas is less than of
land price is high because of its important low-price urban areas.
commercial value.
A
 lthough land transaction volume
in the old town is ver y low, and there
exists developmental problems such as
environmental quality, the price of the old
town is relatively high. In the old town, The
land value of Wards 62,63,64,66,68,69,70,
which are close to CBD and with strong
commercial characteristics itself, is high.
So far the main problem existing in the old
town is deficiency of effective planning, TABLE 1. LAND PRICE & PERCENTAGE
municipal ser vices and life suppor ting
Land Price ($/Sq.meters) Number of Wards Percentage(%)
facilities.
T
 he high land price areas mostly locate in High (>$380/m2) 22 24
downtown area. Meanwhile, the existing
residential and commercial planned regions Medium ($190-380/m2) 33 37
are of high land price, such as Dhanmondi,
Low (<$190/m2) 35 39
Gulshan Baridhara, Karwan Bazar(Ward
18,19,39) (many lands in the Bangladesh are Total 90 100
so short of plan that the land value cannot
(Source: Field Survey, 2004-2005)
be fulfilled).
T
 he southern part of the old town close to
the city fringe is of medium price. TABLE 2. LAND PRICE OF FRINGE AREA
T
 he fringe of the Dhaka city, especially the
west-north and east-south have lower price. Name of the Fringe Area Land Price (Million Taka/Sq. Meters)
The land price are escalating to meet the
Ashulia 0.006
needs of city external expansion.
Savar 0.0037-0.0045

Kamrangir Char 0.0045-0.0075

Keranignj 0.0022-0.0045

(Source: Field Survey, 2004-2005)

21 22
CURRENT
3
Part

SITUATION
OF REAL
ESTATE
MARKET
GENERAL INFORMATION
OF DHAKA REAL ESTATE
MARKET

Rapid urban population growth in Bangladesh, 3.7% per year in estimation, leads Dhaka real estate market well developing.

TABLE 3. URBANIZATION RATE IN BANGLADESH

1970 1980 1990 2000 2010 2020
Urban Population (thousand) 5,059 12,713 21,750 34,354 52,223 74,432
Urbanization Rate (%) 7.6 14.9 19.8 25.0 31.1 37.7
Dhaka 1,474 3,257 6,621 12,519 19,393 N/A

Urban Population Distribution Chittagong 693 1,332 2,265 3,651 5,389 N/A
(thousand) Khulna 325 632 973 1,442 2,081 N/A
Rajshahi 108 238 517 1,035 1,676 N/A

(Source: Rural and Urban Development Case Study-Bangladesh, Oxford Policy Management, Jun 2004)

FIGURE 6. HOUSING RENT RATE CHANGING IN BANGLADESH

Housing rent increasing rate is descending as in Bangladesh people intend to purchase house.
Though housing rent increasing rate is descending, the total amount of housing rent is still growing. Two primary property rights: private
RATE OF
permanent property rights and 99-
year of land use right.
INCREASE
30%

25%
The original owners of the land include: landowners, government or developers (landowners
20% deliver the land to the developers; after the construction of the buildings, the developers and
landowners will share the house).
15%
By purchasing land from the landowners for commercial house-building development, the
10%
developers get the right to use the land for 99 years. With the sale of the house, ownership
of the house and the right to use the land will be transferred to the new house buyer; after 99
5% years, the original landowner can retrieve the ownership of the land for free.

0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
YEAR

(Source: CAB, 2005) (Source: Housing Real Estate Sector in Bangladesh Present Status and
Policies Implications)

25 26
THE REAL ESTATE MARKET:
LAND PRICE

The Urban Land Price in Dhaka Dramatically only 2.5 to 3.5 times, while the land price raised by 6 to 8 Critical Factors of Urban Land Price in Dhaka D
 uration of water logging (Wd)

Increased From 1970s to 1980s, Resulting times. (Source: Seraj and Alam, 1989) D
 epth of water during flood (Dw)

in High Housing Price M

 otijheel region (the citys CBD) was the only sharply T
 ype of the neighborhood (planned/unplanned) D
 istance of the nearest market place (Dmp)
grow in g a rea b efore the countr y s indep endence, W
 idth of the main toad (Wm) D
 istance of the nearest health facility (Dh)
I n the 1970s, Dhaka City experienced an unprecedented indicating that CBD had been relatively prosperous before W
 idth of the access road (Wa) D
 istance of the nearest school (Ds)
increase in land price due to Bangladeshs independence, the independence. S
 urface quality of the main road; Distance of the main road D
 istance to the CBD (dCBD)
following rapid development of politics and economy. T
 he increasing land price is the most critical factor from the area (Dm)
From 1969 to 1979, the cost of living in Dhaka increased by resulting in the growth of urban housing price.

FIGURE 7. GROWTH RATE OF LAND PRICE IN DIFFERENT DISTRICTS OF DHAKA TABLE 4. CORRELATION MATRIX OF INFLUENCING FACTORS
FROM 1947 TO 1966, 1966 TO 1983 AND 1983 TO 2005
Land Price Wm Dh Wa Dmp Dm Ds dCBD Dw
Wm 0.736
PERCENTAGE (%)
Dh -0.379 -0.3597
13000
12000
Wa 0.679 0.6121 -0.29571

11000 Dmp -0.439 -0.2682 0.266713 -0.22896

10000 Dm -0.573 -0.3799 0.15229 -0.10272 0.4986

9000 Ds -0.335 -0.0687 0.274791 -0.21552 0.4669 0.246
8000 dCBD 0.04 0.3396 -0.0635 0.478922 -0.048 0.264 0.14
7000 Dw -0.188 0.0478 0.175102 0.004555 0.5312 0.28 0.358 0.252
6000 Wd -0.554 -0.3266 0.443437 -0.20965 0.554 0.49 0.356 0.197 0.728
5000 Note: important factors figured out here with red rectangles of which
4000 considered to be the most key factors on land price.
(Source: Field Survey,2004-2005)
3000
2000 TABLE 5. CHARACTERISTICS OF CRITICAL FACTORS AMONG THREE INTERVAL PRICE
1000
Features Low Priced Land Medium Priced Land High Priced Land
0
Average land price (million Tk. / sq. meter) 0.009 0.02 0.04
Az

Ba

Ch

Dh

Es

Ca

Is

Ka

La

Pu

Ra

Sa

Se

Su

Average width of the main road (meter) 16 23 31

ar

aw
ag

ot
la
ka

lb

da
im

gu

tr
nd

m
aw
ng

ra
rw
an

ijh

in
h

ap
ab
ag

na
na
to

rg

n
pu

ar
ab

an
k

pu

da

Average width of the access road (meter) 2 3 5

Ba

ee

Ba

ur
pu
n

h
on

ha
Ba

ia
an
r

Pa
r

Ba

za

gi
di

t
za
dh

Average distance to the community facilities (meter) 500 260 200

lt a
r
za

ch
r
u

n
r

a
Av

Average distance to the CBD (km) 2.5 2.6 2.6

enu

Average distance to the main road from the locality (meter) 500 400 260
e

%Increase (1947-1966) %Increase (1966-1983) %Increase (1983-2005) Average duration of water logging (hr) 17 6 3
(Source: Land Price in Dhaka City: Distribution, Characteristics and Trend of Changes) (Source: Field Survey,2004-2005)

27 28
THE REAL ESTATE MARKET:
LAND PRICE

Land Transaction E
 ach land transaction should submit around 12% of the
land price as the government land transaction registration
 Land transaction in Bangladesh is accomplished by the tax.
Sub Registry Office, and each Sub Registry office retains A
 ccording to the following datasets of the actual land price,
the transaction records. But the price on these records has the transaction tax should triple at least.
lagged far behind the actual market price.

TABLE 6. COMPARISON OF ACTUAL LAND

"The official land price in PRICE AND OFFICIAL LAND PRICE
Dhaka has far lagged behind
the actual land price, affecting OFFICIAL LAND ACTUAL LAND
RATIO OF ACTUAL
LAND PRICE TO
PRICE (MILLION PRICE (MILLION
government revenue." TAKA/ SQ. METER) TAKA/ SQ. METER)
OFFICIAL LAND
PRICE

54 0.007 0.034 4.5

53 0.007 0.026 3.5

FIGURE 8. COMPARISON OF ACTUAL 56 0.01 0.034 3.2

LAND PRICE AND OFFICIAL LAND PRICE
35 0.008 0.025 3
23 0.008 0.019 2
Land price pushed up the citys
LAND PRICE
(MILLION TAKA/ SQ METER)
0.06 62 0.008 0.032 4

0.05 66
81
0.018
0.003
0.041
0.01
2
3.7
real estate price, but the Dhaka
0.04

0.03
86 0.009 0.009 3 governments tax revenue did not
0.02
71
69
0.007
0.009
0.037
0.034
4
4.5
receive great benefits.
0.01 49 0.009 0.056 6.25
36 0.01 0.034 3
0
54 53 56 35 23 62 66 81 86 71 69 49 56 59
39 0.007 0.03 4
WARD NO

official land price (Million Taka/ Sq. Meter)

(Source: Official land price was collected from the office of the concerned Sub
Actual land price (Million Taka/ Sq. Meter) Registrar and the actual price was collected from field survey. )

29 30
THE REAL ESTATE MARKET: Key Factors Influence the Apartments Price
The key factors influencing the price of apartments: land price
FIGURE 11. GROWTH RATE OF AVERAGE
LAND PRICE IN DHAKA, 1990-2010

LAND PRICE
PERCENTAGE CHANGE
and construction cost 700%
Land price
625.1%
The land price had a drastic growth from 2000 to 2010;
compared to the year before 2000, the price has doubled, 600%
or even increased by 3 to 10 times in some areas.
The lack of effective government control over land price
500%
in Dhaka had led to skyrocketing price.
C onsequently, 63.9% respondents considered the
high land price ultimately had a direct impact on the 400%
affordability of apartments.
Construction cost
Construction cost had also increased. 300%
Average Land Price

TABLE 7. AVERAGE PRICE OF Study on Apartment Price in Dhaka 219.8%

200%
APARTMENTS IN DIFFERENT AREAS OF
DHAKA FROM 1990 TO 2010  Two key factors influence the apartment price: land price
and construction cost.
Average Price of Apartments (Taka/ % Increase in price over 100%
 The average price of apartments increased sharply from
Sq. feet) the past two decades
year 2000 to 2010 specifically in the areas of Baridhara, TABLE 8. PRICE OF LAND (TAKA PER
0.0% YEAR
Area
Year Between
1990-2000
Between
2000-2010
Dhanmondi, Gulshan, Banani, and Shamoli. KATHA) IN DIFFERENT AREAS OF DHAKA 0%
1990 1995 2000 2005 2010
Dhanmondi 2150 2200 2400 3300 14000 12% 483% In 2005, the growth of price had a drastic growth. FROM 1975 TO 2010 1990 2000 2010
Gulshan 2115 2080 2450 4500 14000 16% 471%
(Source: statistical yearbook, Bangladesh bureau of statistics)
Banani 1750 1950 2200 3100 12500 26% 468%
Baridhara 1850 1950 2150 4000 20000 16% 830% % Increase in price
Lalmatia 1800 1950 2400 3400 8500 33% 254% Price of Land (Taka/ Katha) over the past two
decades
Mirpur 1250 1300 1500 2500 5500 20% 267%
Uttara 1650 1750 2000 2700 5300 21% 165%
Shantinagar 1850 1900 2200 2700 5000 19% 127%
Year Between Between
Siddeswari 1450 1800 2250 2750 5500 55% 144%
Area 1990- 2000-
Malibag 1600 1850 2250 2500 7000 41% 211% 1975 1990 2000 2010 2000 2010
Mohammadpur 1450 1600 1800 3500 4500 24% 150%
Shamoli 1350 1500 1600 2100 7000 19% 338% Baridhara 25,000 600,000 5,000,000 40,000,000 733% 700%
Kolabagan 1800 2000 2250 2100 5500 25% 144%
Gulshan 25,000 600,000 2,200,000 25,000,000 267% 1036% FIGURE 12. GROWTH RATE OF
Monipuripara
Green Road
1850
1600
2000
1700
2250
2000
3300
2500
5500
5500
22%
25%
144%
175% Banani 25,000 600,000 2,000,000 15,000,000 233% 650%
CONSTRUCTION MATERIALS COST IN
Elephant Road 1600 1800 2200 2500 5500 38% 150% FIGURE 10. GROWTH RATE OF AVERAGE DHAKA, 1990-2010
Mahakhali 25,000 600,000 1,800,000 12,000,000 200% 567%
Segun Bagicha 1450 1550 1900 2500 6000 31% 216%
APARTMENT PRICE IN DHAKA Dhanmondi 25,000 600,000 2,200,000 20,000,000 267% 809%
GROWTH
2000%
FIGURE 9. YEARLY GROWTH OF AVERAGE PERCENTAGE CHANGE
Lalmatia 20,000 600,000 1,800,000 15,000,000 200% 733%
APARTMENT PRICE IN DHAKA (USD PER 200%
Azimpur 175,000 600,000 1,600,000 5,500,000 167% 244%
1800% 1833.61%

SQUARE METER) 180% Mohammadpur 25,000 500,000 1,200,000 7,000,000 140% 483% 1600%
2500
Shantinagar 20,000 500,000 1,500,000 10,000,000 200% 567%
160% 1400%
Shamoli 17,500 300,000 1,000,000 4,500,000 233% 350%
140% 1200%
2000 Uttara 20,000 300,000 1,000,000 7,500,000 233% 650%

120% Cantonment 20,000 400,000 1,000,000 7,500,000 150% 650% 1000%

Komlapur 17,500 400,000 800,000 4,000,000 100% 400%

1500 100% 800%
Gendaria 10,000 400,000 700,000 3,500,000 75% 400%
Average Price of Apartment 661.28%
80% Basabo 2,000 300,000 800,000 3,500,000 167% 338% 600%

1000 Kollanpur 17,500 300,000 800,000 3,200,000 167% 300%

60% 400% 378.99%
0.02 Mirpur 10,000 200,000 700,000 4,000,000 250% 471%
200%
199.72%
40%
500 Badda 4,000 200,000 600,000 3,000,000 200% 400% 73.12%
0.00% 74.88% YEAR
0% 8.15% 25.36%
20% Goran 4,000 200,000 600,000 2,600,000 200% 333%
90 95 00 05 10
YEAR Demra 4,000 200,000 600,000 18,000,000 200% 2900%
0 0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Motijheel 50,000 1,200,000 3,500,000 20,000,000 192% 471% Brick Fine Sand Granular Sand Cement
1990 1995 2000 2005 2010
Kawran Bazar 41,500 1,000,000 2,500,000 15,000,000 150% 500% Rod 60 Grade Flat per Sq Ft Land
(Source: Sheltech Survey) (Source: statistical yearbook, Bangladesh bureau of statistics)

31 32
THE REAL ESTATE MARKET:
REAL ESTATE PRODUCT

Types of Real Estate Products

In recent years, real estate developers began to offer more
C
 ommercial Building: shopping mall, shopping street and diverse products. The town model, a kind of Infrastructure
office tower could complex satisfies all needs of people including office
Residential Building: flat and apartment buildings, shopping centers, housing, schools, swimming
Mixed-use Building: mainly for residential and commercial use pools, stadiums, banks and power plants. At the same time,
many of Bangladesh's real estate agencies intend to divide TABLE 9. THE PRICE OF FLAT IN DIFFERENT AREAS OF DHAKA, IN THE
Trend of Product Types: Complex Town with one single building into multiple building as products. YEAR 1970, 1990, 2010 (THOUSANDS BDT PER KATHA)
Multiple Uses and Functions Area 1970 1990 2010
Baridhara 25 600 8000
Gulshan 25 600 6000
Banani 25 600 5000
Mohakhali 25 600 5000
Dhanmondi 25 600 5500
Azimpur 17 600 3000
Mohammadpur 25 600 4000
Shantinagar 20 600 4000
DOHS 20 500 5500
Shyamoli 17.75 500 5500
Uttara 20 300 2500
Cantonment 20 300 2500
Kamalpur 17.75 400 4500
Sayedabad 17.75 400 3000
Gendaria 10 400 5000
Bahsabo 2 300 1500
Kalyanpur 17.5 300 1500
(Source: T. M Housing problems and Apartment Development in Dhaka city)

33 34
THE REAL ESTATE MARKET:
REAL ESTATE PRODUCT

TABLE 10. REAL ESTATE TRANSACTIONS The Role of Construction and Real Estate
ACCOUNTED FOR THE PROPORTION OF Industry
TOTAL GDP
T
 he construction and real estate industry is the third pillar
Real Estate, renting and business services
Year of Bangladesh following agriculture and manufacturing,
(% of GDP)
2001-02 8.63 accounting for more than 7% of GDP.
2002-03 8.48 T
 he construction and real estate industry keeps growing;
2003-04 8.30 however, comparing to growth rate of GDP, its growing rate
2004-05 8.12 is relatively slow, resulting in the declining trend of real
2005-06 7.87
estate transactions in the proportion of GDP. The Development of Construction and Real increased, the construction industr y in Bangladesh
2006-07 7.64
A
 ccording to the Labor and Social Labor Survey, in 2002,
2007-08 7.49

Estate Industry in Bangladesh boosted in 2003 with the number of 250 companies.
the construction and real estate industry recruited 4% of C
 urrently, Bangladesh has more than 1,500 real estate
2008-09 7.34
the total labor force in the country, around 1.73 million. In B
 angladesh real estate industry has been developing since companies, of which 1081 companies have registered in the
2009-10 7.20
2005, the number reached to 1.76 million accounting for 1970, with only five real estate developers in the beginning. Bangladesh Real Estate Association (REHAB);
3.7% of the total labor force. F
 rom the 1980s, Dhaka's real estate industry stepped into A
 partment is an important product of the real estate
T
 he developing construction industry accelerates the a period of rapid development; there were 42 real estate industry in Bangladesh from the late 1970s. It reflects the
FIGURE 13. COMPARISON OF THE
relevant building materials industry and also the price of developers till year 1988. extent of real estate development in Bangladesh.
GROWTH OF OVERALL GDP AND REAL
brick, sand, cement and other related materials. S
 ince 1990, the demands of industrial buildings, office
ESTATE TRANSACTION
buildings, residential housing, roads and other facilities

FIGURE 14. CHANGES IN THE NUMBER OF FIGURE 15: CHANGES IN THE NUMBER OF
DEVELOPERS IN DIFFERENT TIME APARTMENT PRODUCTS IN DIFFERENT
TIME PERIODS
1600 1500

1400
1200
1000
800
600
400 250
200 42
5
0
1970 1980 2003 2015

35 36
THE REAL ESTATE MARKET:
INVENTORY

Real Estate Product Sale

T
 he legally registered real estate companies get the permission
of relevant housing construction, then the products can be sold in
the market.
D
 uring or after product construction, the product could be sold
with relatively small sales resistance and high price; Sales of
products in planning phase face large sales resistance with lower
price.
H
 ouse buyers should pay 20%-30% of the house price as deposit
before buying the commercial housing.
G
 enerally, sales events are organized by the marketing teams of
developers, as real estate intermediary agencies can only sell a
small amount of products.

The Inventory of Apartment Product

T
 he inventory of apartment product in Dhaka is relatively high.
 According to the data, real estate industry of Dhaka and other While new types of residential
products continue to emerge, the
cities is still at a low point.
M
 ore than 8,000 apartments of developers in the association
are waiting to be sold. In addition, there are more than 1,000

developers who did not join the association are facing the same
problem.
B
 angladesh real estate industry stepped into the recession
inventory of apartments has received
period in 2010 that 3018 sets apartments were unsold, estimating
an investment of 16.24 billion Taka. In 2014, this number reached great attention.
to 12,185 , an investment of 88.11 billion Taka. At the same time,
the number of property transaction decreased from 2,492 sets in
2010 to 1,749 in 2014.
T
 he real estate downturn affected the upstream and downstream
industries. The annual growth rate of demand for cement
from the expected 15% decreased to 8%. Annual sales of steel
decreased from 700 million tons to 400 million tons, and the
increasingly serious unsafe working situation also make the
industry worse
37 38
THE REAL ESTATE MARKET: TABLE 11. THE INFLUENCE OF DIFFERENT
FACTORS ON INSTALLMENT AND FULL
PAYMENT
House Payment
According to the price list of real estate companies, two kinds

DEVELOPER
Rate Per Katha
of payment are offered: full payment and installment.
Full Payment
Plot Type Installment
6 Years 3 Years 1 Years Influencing Factors on House Price
General North Facing 4.25Lac 2.50Lac 3.50Lac 4.50Lac
General South Facing 4.75Lac 2.75Lac 3.75Lac 4.75Lac Direction to north or south, landscape, at the corner or not,
Garden/ Park View 5.25Lac 3.00Lac 4.00Lac 5.00Lac distance to the main roads and commercial centers are main
North Corner 5.75Lac 3.25Lac 4.25Lac 5.25Lac factors affecting the price.
South Corner 6.25Lac 3.50Lac 4.50Lac 5.50Lac
Avenue Side 6.75Lac 3.70Lac 4.70Lac 5.70Lac Take the highest price (18.25Lac per Katha) as an example
Avenue Corner 7.25Lac 4.00Lac 5.00Lac 6.00Lac
1 8 . 25L a c= US$ 1 , 825 ,0 0 0, th e p r i ce of h o u s e un it i s
Commercial 7.55Lac 5.00Lac 6.00Lac 7.00Lac
US$27,650/Sq metre
A Project of Purbachai Probashi Palli Ltd. Start From: 16.01.2016

Take the lowest price (2.5 Lac per Katha) as an example

2.5Lac=US$250,000, the price of house unit is US$3,790/Sq
metre

Probashi Palli Group The Price Offered by Probashi Palli Group is

Relatively Low Compared to Other Property
A
 bout the company: Itprimarilyspecializesinthereales
Developers
tatesector for the working class and provides residential
products. In addition, the company covers business in Each real estate company has its own price system.
Press, apartment management and electronic industries. I t is correlated to the companys target customer base,
Established in: 2007 project location and other factors.
First project: Probashi Palli Abashon Prokalpo in 2008
Project List: TABLE 12. THE INFLUENCE OF DIFFERENT
Probashi Palli Abashon Prokalpo FACTORS ON HOUSE PRICE
Probashi Palli River View Prokalpo
Probashi Palli Satellite Town Plot General North General South Garden/ Park
North Corner South Corner Avenue Side Avenue Corner Commercial
Type Facing Facing View
Purbachal Probashi Palli Ltd.
Probashi Palli Abason Block Installment At a time Installment At a time Installment At a time Installment At a time Installment At a time Installment At a time Installment At a time Installment At a time

A 16.25Lac 12.25Lac 16.75Lac 12.50Lac 17.00Lac 12.75Lac 17.25Lac 13.00Lac 17.45Lac 13.05Lac 17.75Lac 13.15Lac 18.25Lac 13.40Lac 20.25Lac 14.25Lac
Shah Amanot City Ltd.
B 14.25Lac 10.79Lac 14.75Lac 11.25Lac 15.00Lac 11.50Lac 15.25Lac 11.75Lac 15.45Lac 11.85Lac 15.75Lac 13.05Lac 16.25Lac 13.40Lac 18.25Lac 14.00Lac
Probashi Palli Holdings Ltd.
Case: Purbachal Probashi Palli C 14.25Lac 10.75Lac 14.75Lac 11.25Lac 15.00Lac 11.50Lac 15.25Lac 11.75Lac 15.45Lac 11.85Lac 15.75Lac 13.05Lac 16.25Lac 13.40Lac 18.25Lac 14.00Lac
Purbachal Shahparan City Ltd.
D 12.25Lac 10.25Lac 12.75Lac 10.50Lac 13.00Lac 10.75Lac 13.25Lac 11.00Lac 13.45Lac 11.15Lac 13.75Lac 11.35Lac 14.25Lac 11.75Lac 16.25Lac 12.25Lac
Next Builders Ltd. T
 arget customers: the middle class and elites, i.e., police,
E 12.25Lac 10.25Lac 12.75Lac 10.50Lac 13.00Lac 10.75Lac 13.25Lac 11.00Lac 13.45Lac 11.15Lac 13.75Lac 11.35Lac 14.25Lac 11.75Lac 16.25Lac 12.25Lac
Shahjalal City Gazipur Ltd. lawyers, media, civic, public and private sector employees.
Faiza Securities Ltd. F 7.25Lac 5.25Lac 7.75Lac 5.50Lac 8.00Lac 5.75Lac 8.25Lac 6.00Lac 8.45Lac 6.15Lac 8.75Lac 6.40Lac 9.25Lac 6.75Lac 11.25Lac 7.25Lac
Location:
Purbachal Adnan City G 7.25Lac 5.25Lac 7.75Lac 5.50Lac 8.00Lac 5.75Lac 8.25Lac 6.00Lac 8.45Lac 6.15Lac 8.75Lac 6.40Lac 9.25Lac 6.75Lac 11.25Lac 7.25Lac
P urbachal New Town is jointly developed by RAJUK
Hotel Black Rose H 5.75Lac 3.75Lac 6.25Lac 4.00Lac 6.75Lac 4.25Lac 7.25Lac 4.55Lac 7.50Lac 5.70Lac 7.85Lac 5.00Lac 8.25Lac 5.25Lac 9.25Lac 6.25Lac
and Probashi Palli Group together. It is visualized to be
Hotel Fahim International I 4.25Lac 2.50Lac 4.75Lac 2.75Lac 5.25Lac 3.00Lac 5.75Lac 3.25Lac 6.25Lac 3.50Lac 6.75Lac 3.70Lac 7.25Lac 4.00Lac 7.55Lac 5.00Lac
a wonderful new town and potentially the largest city in
Probashi Palli Agro based Industry South-east of Asia.
South Surma Developement Ltd. T he Prime Minister's Secretariat, the Rajuk Office and TABLE 13. PRODUCT PRICE OF DIFFERENT
Probashi Palli Education & Developemt Ltd. other important government agencies, as well as foreign REAL ESTATE DEVELOPERS
embassies, banks and international office buildings will
Company Name Nature/Ft. 3Katha 5Katha 10Katha 20Katha
be transferred to the region.
D haka University and Oriental Oxford University will 2-16 2.5-16.5 5-16.5 5-20
Probashi Palli Group South/North/Corner etc.
move to this area. Lac Per Katha Lac Per Katha Lac Per Katha Lac Per Katha
Project Benefit
The city's important roads, high-speed road entrance; East West Property Development 15-22 18-25 30-32 35-37
North. East. South. Lake View etc.
Pvt Ltd Lac Per Katha Lac Per Katha Lac Per Katha Lac Per Katha
First-class hospital;
B anks, insurance companies, post offices, community 17.84 14-23 17-28 31-34
Prubachal Bestway city Based on 30-100 ft
Lac Per Katha Lac Per Katha Lac Per Katha Lac Per Katha
centers;
Advanced shopping centers; 11-18 11-18.30 11-17.35 10.10-17.20
US-Bangla Assets Ltd North. East. South. Lake View
Per Katha Per Katha Per Katha Per Katha
Bus starting station;
close to the vegetables, fresh food production; 1.8-2.65 2.35-3.7 2.8-4.35 5.45-7.15
Euro Bangla Abashon Ltd 30,40,50,60,120
Playgrounds, parks, conference centers and leisure lakes. Per Katha Per Katha Per Katha Per Katha

39 40
THE REAL ESTATE MARKET: RAJUK (Rajdhani Unnayan Kartripakkha) the working class.
M
 ost of the house buyers are political and social elites
A
 n important government agency for urban planning (such as businessmen, government officials and congress

REAL ESTATE
and development control of Dhaka city, integrating member s) and other groups who have high social
with planning, regulatory and real estate development status (such as foreign immigrants, lawyers, writers and
company. journalists).

ASSOCIATION

E
 stablished in 1987.
T
 ake the Purbachal and Uttara (3rd phase) projects
developed by RAJUK as an example, according to the
floor design and quantity proportion of houses, there is no
I n the Purbachal project, 24% work for the government, of
which the floor area of 733 sets is 5 Katha and that of 89
sets is 10 Katha. 15% work for low-income local residents
with floor area of 3 Katha.
priority to solve housing problems for the middle class and

TABLE 14. DEVELOPMENT AND SALE OF

PURBACHAL AND UTTARA NEW TOWN
Purbachal New Town Uttara Residential Area (3rd Phase)
Total nos. of allotment Category (and plot Total nos. of allotment
SI. No. Category (and plot sizes)
(and as per plot size) sizes) (and as per plot size)
1 Adibashi (3 Katha) 1034 -- --
2 Affected (unknown) 700 -- --
REHAB (Real Estate and Housing Armed Forces (3, 5, 7.5 and Armed Forces (3 and
Association of Bangladesh) 3 114 (44, 50, 14 and 6) (8 and 4)
10 Katha) 5 Katha)
T
 he only accredited non-governmental organization joint Artist2 (3, 5, 7.5 and 10 Artist2 (3 and 5
4 151 (41, 80, 21 and 9) 16 (11 and 5)
by social-enterprise developers to standardize real estate Katha) Katha)
development and ensure developers' interests in real Autonomous (3, 5 and 7.5 Autonomous (3 and
estate industry. 5 654 (261, 308 and 85) 69 (47 and 22)
Katha) 5 Katha)
R EHAB was established in 12th December 1991 with 11
Businessman &
members; at the end of 2002, the association has 89 Businessman & Industrialist
6 472 (176, 213, 57 and 26) Industrialist (3 and 5 45 (31 and 14)
members. In 2008, it covered 320 members; in the past (3, 5 and 7.5 Katha)
two years, the member of this association has reached
Katha)
about 1130. Expatriate (3, 5, 7.5 and 10 Expatriate (3 and 5
7 591 (220, 267, 72 and 32) 57 (39 and 18)
R ole of REHAB: Katha) Katha)
O rganize REHAB Housing Fair annual meeting for Freedom Fighter (3, 5, 7.5 Freedom Fighter (3
association members and institutions, especially for 8 296 (110, 134, 36 and 16) 28 (19 and 9)
and 10 Katha) and 5 Katha)
important clients from abroad;
Government (3, 5, 7.5 and 10 1632 (610, 733, 200 and Government (3 and 5
E stablish reliabilit y by offering Customer Ser vice 9 162 (111 and 51)
Standing Committee for arbitration services;
Katha) 89) Katha)
Support the government, such as formulating real estate Journalist (3, 5, 7.5 and 10 Journalist (3 and 5
10 55 (20, 25, 7 and 3) 5 (3 and 2)
industry policy, laws, rules and regulations; Katha) Katha)
Hold various seminars, conferences for organizations and 11 Justice (7.5 and 10 Katha) 14 (13 and 1) Justice (5 Katha) 10
other professional groups;
Lawyer (3, 5, 7.5 and 10 Lawyer (3 and 5
O rganize REHAB Week for young students for speech 12 110 (40, 50, 14 and 6) 10 (7 and 3)
Katha) Katha)
and art competitions.
I mportance of REHAB: 13 MP4 (5, 7.5 and 10 Katha) 57 (1, 2 and 54) MP5 (5 Katha) 83
T he Bangladesh government has issued a notice that Others (3, 5, 7.5 and 10
14 181 (92, 64, 17 and 8)
if developers engage in residential, apartment and Katha)
commercial industry, association membership must be
Private Service (3, 5, 7.5 and Private Service (3
required to ensure the quality of development; 15 591 (220, 267, 72 and 32) 57 (39 and 18)
10 Katha) and 5 Katha)
The establishment of Executive Committee: setting out
regulations for clients, landowners, peers, the public Remaining (3, 5, 7.5 and 10 Remaining (3 and 5
16 207 (85, 85, 25 and 12) 26 (17 and 9)
and the states business action, in case of violation of the Katha) Katha)
ordinance, it can be expelled from the association. Retired (3, 5, 7.5 and 10 Retired (3 and 5
17 57 (21, 26, 7 and 3) 4 (3 and 1)
Katha) Katha)
Note: Adibashi (original inhabitants), as the original local residents or who affected by land
expropriation, on behalf of vulnerable groups
(Source: Own accounting from Plot Allotment Results 2009 available at RAJUK website)

41 42
THE REAL ESTATE MARKET:
REAL ESTATE FINANCE

Financial Institutions in Real Estate Industry in Bangladesh

1
BHBFC(Bangladesh House Building Finance Corporation)
A state-owned company that provids loans to Bangladesh housing and construction.
I n Bangladesh, loans are originated from: 1. BHBFC 2. commercial banks 3. employee loans 4.
social insurance.
I n general, priority is given to civil servants. Meanwhile, individuals, family and enterprise can
receive loans in purchasing or building houses.
B HBFC offers 1520 year mortgages at commercial interest rates.
T he loans are mainly concentrated in Dhaka and Chittagong Metropolitan areas.

2
DBH(Delta-BRAC Housing Finance Corporation Ltd. )
A
 pioneer of private financial institutions, also the largest private housing financial institution
in Bangladesh.
D
 BH has provided housing loan services for 7,500 families in Dhaka and other large cities in
Bangladesh.
Currently, Bangladesh has 23 private
M
 ortgage duration: 15 years of mortgage at the most
L
 oan interest rate: the current interest rate is 16.5% financial enterprises to provide
housing loans.

3
NHFIL(National Housing Finance and Investment Ltd.)
A
 private housing financial institution, offers financial loans for housing construction,
purchasing, repairing housing and purchasing house foundation.

43 44
 4
Part

CONSUMER
QUESTION-
NAIRE
GETTING TO KNOW THE
Respondents Prefering Self-Building Respondents Prefering Purchasing A Flat
2
 86 of the respondents intend to build a home in 3
 85 of the respondents intend to purchase a flat in the

CONSUMERS
upcoming 10 years, accounting for 43%. upcoming 10 years, accounting for about 57%.
A
 verage monthly family income is BDT95,411.18. A
 verage monthly family income: BDT97,300.
O
 n average, respondents plan to build their houses on 4.6 O
 n average, respondents intend to purchase a 1,786 square
Kathas of land. feet flat.

FIGURE 21. EDUCATION LEVEL OF FIGURE 25. EDUCATION LEVEL OF RESPONDENTS

RESPONDENTS PREFERING SELF-BUILDING PREFERING PURCHASING A FLAT

Information of the Respondents

M
 ost respondents are working-class in the service sectors, M
 orethan 50% of the respondents come from Zone-2
business and banking sectors. (Adabor, Dhanmondi, Mohammadpur, New Market) and
M
 ore than 90% of the respondents are educated. Zone-4 (Khilgaon, Motijheel, Paltan, Ramna, Shahbagh,
6
 3% of the respondents are over the age of 40; 79% of Tejgaon )
them are male.
FIGURE 22. OCCUPATION VARIETY OF FIGURE 26. OCCUPATION VARIETY OF
RESPONDENTS PREFERING SELF-BUILDING RESPONDENTS PREFERING PURCHASING A FLAT
FIGURE 16. OCCUPATION VARIETY FIGURE 19. GENDER OF THE
RESPONDENTS

FIGURE 23. AREA ORIGINATION OF FIGURE 27. AREA ORIGINATION OF

RESPONDENTS PREFERING SELF-BUILDING RESPONDENTS PREFERING PURCHASING A FLAT
FIGURE 17. EDUCATION LEVEL FIGURE 20. AREA ORIGINATION

FIGURE 24. AGE DISTRIBUTION OF FIGURE 28. AGE DISTRIBUTION OF RESPONDENTS

RESPONDENTS PREFERING SELF-BUILDING PREFERING PURCHASING A FLAT
FIGURE 18. AGE DISTRIBUTION

(Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012)

47 48
HOUSE PURCHASING
PATTERN

Characteristics of Respondents Preferring Characteristics of Respondents Preferring

Self-Building Purchasing A Flat
C
 urrent residence: Zone-4 (Khilgaon, Motijheel, Paltan, R
 espondents who are currently residing at Zone-2, Zone-3
Ramna, Shahbagh, Tejgaon) and Zone-5 are more willing to purchase flats.
I ntend to build houses in the areas: Uttare, Mirpur, F
 or purchasing flats, respondents mostly prefer:
Purbachal, Bashundhara, Mohammadpur, Dhanmondi, D
 hanmondi, Uttara, Mirpur, Mohammadpur, Gulshan-
and Gulshan. Banani, Basundhara area, and Malibagh-Mogbazar area.
M ajor reasons for preferring a particular area M
 ajor reasons for preferring a particular area
Close to office, school, college, etc. Better planned area (Uttara, Bashundhara, Dhanmondi,
Less expensive (eg. Mirpur) Gulshan)
Calm, quiet and good environment Close to office, school, college etc
Better planned area (Bashundhara area, Purbachal area, Residing at that area for a long time and have relatives in
Dhanmondi, Gulshan) that area
Residing at that area for a long time and have relatives in Less expensive (Mirpur, Mohammadpur, Uttara)
that area. C
 haracteristics of the respondents
C haracteristics of the respondents Part of the low-income or middle income class with
Respondents from the middle income group, i.e. 30,000 monthly income below BDT30,000 or between 30,000-
to 45,000 and 45,000 to 60,000 are more interested to 45,000, who plan to purchase in 10 years.
build their own houses in the future. Part of the high-income class with monthly income of
A bout 84% from those two groups reside in rental BDT60,000-75,000 of above 75,000 plan to purchase in
houses. three to five years, most are bank workers who can receive
lower bank lending rate.

FIGURE 29. AREA PREFERENCE OF SELF- FIGURE 30. AREA PREFERENCE OF

BUILDING PURCHASING A FLAT

Legend
current residential area

construction area in the future

Data resource: A Comprehensive Study on the Real Estate Sector of Data resource: A Comprehensive Study on the Real Estate Sector of
Bangladesh, 2012 Bangladesh, 2012

49 50
PREFERENCES AND
DEMAND

Potential Buyers Are Considered to be the Conflicts Between the Real Living Needs Forecast of Dwelling Needs Changing in Life-Span
Middle-Income Class. and Market
In short-term (i.e. 3-5 years), respondents prefer purchasing a flat but in long-term (i.e. 10 years), self-building is more
FIGURE 31. DEMOGRAPHICS OF L
 arge Units are more popular due to the household welcomed.
POTENTIAL HOUSING PURCHASERS structure.
Households including parents plus one or two children
prefer apartments with two or three bedrooms.
Now, more than half of the apartments in the market are TABLE 15. ESTIMATED DEMAND FOR FLATS AND HOUSES IN DHAKA
between 1000 and 1600 square feet (92 to 148.6 square
low-income middle-income high-income meters), and only 2% of the apartments are less than 700
14,251,000 (CIA 10,298,888 (SBS, Dec 11,875,000
square feet (65 square metres), which also shows the Population of Dhaka
World Fact Book) 2011, BB) (Census 2011)
negative market acceptance of such small apartments.
T
 he Bangladesh rental market is booming all-time-tigh.
Avg. no. of member in a household 4.5 4.5 4.5
B angladesh has no active second-hand housing market
because of the high transaction tax and the continuous

50% 45% 5% rise in land prices;

According to the questionnaire survey, most people do
Total household in Dhaka 3,166,889 2,288,642 2,638,889

(Source: Housing Real Estate Sector in Bangladesh Present Status and not have the ability to purchase a house in a short term.
Policies Implications) Total household in Dhaka who have 30,000+
The rents in Dhaka rose by 250% from1990 to 2007. 410,112 296,379 341,736
income

FIGURE 32. FORECAST OF DWELLING

NEEDS CHANGING IN LIFE-SPAN Total 30,000+ income group people in Dhaka 635,674 459,388 529,691

Demand for houses

Total demand to build a home in 3 years 40,429 29,217 33,688

Total demand to build a home in 5 years 82,765 59,812 68,966

Total demand to build a home in 10 years 132,602 95,828 110,494

Demand for flats

Total demand to purchase a flat in 3 years 105,331 76,121 87,770

Total demand to purchase a flat in 5 years 126,944 91,740 105,779

Area Distribution of High-Income Group
Total demand to purchase a flat in 10 years 96,877 70,011 80,725

Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012 Note: according to the forecast requirement, monthly income of more than
2012 30000 Taka as potential consumer.

51 52
HOUSEHOLD INCOME
AND LOAN
Family Income and House-Purchasing More than 80% of the respondents declared bank loan as FIGURE 33. OVERALL GROWTH OF LOAN FIGURE 34. GROWTH OF LOAN ACCOUNT
Funding a major source of funding. ACCOUNT AND AMOUNT TO THE REAL AND AMOUNT TO THE REAL ESTATE
Most of the respondents affirmed that due to difficulties in ESTATE SECTOR, 2007-2011 DEVELOPERS, 2007-2011
Among the respondents around 50% (330 out of 676) has getting bank loan they were unable to fulfill their housing
an average family saving of around BDT 20,000. needs in the future.

TABLE 16. SAVINGS OF THE TABLE 17. SAVINGS OF THE RESPONDENTS

RESPONDENTS BASED ON MONTHLY BASED ON RESPONDENTS PROFESSION
FAMILY INCOME
Profession of the respondents Monthly average savings
Monthly family income Monthly average savings Doctor BDT 30,000
Below BDT 30,000 BDT 5,000 Engineer BDT 30,000
BDT 30,000 to 45,000 BDT 6,000 Banker BDT 20,000
BDT 45,001 to 60,000 BDT 10,000 Teacher BDT 8,500
BDT 60,001 to 75,000 BDT 12,500
Businessperson BDT 30,000
More than BDT 75,000 BDT 35,000 D
 uring th e p e r i o d of 20 07 a n d 20 0 8 , th e I nte r i m I n 2006, loan was disbursed to 922 real estate developers.
Lawyer BDT 40,000
Government period, the number of loan accounts had a In 2011, this number raised to 2385.
Service holder BDT 10,000
Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh,
sharp positive growth, but the total loan amount for this D
 uring the period of 2007 and 2008, loan accounts had
Others BDT 15,000 period had a negative growth. It means loan was disbursed a drastic negative growth. The total loan amount in this
2012
to a number of clients, but the loan amount was lower. period also had a slender negative growth.
During the period 2008 and 2009, the situation turned over. A
 fter June 2008, total loan amount had a continuous
Real Estate Sector Loan Information difficulties in getting loans, such as Flat Purchasing.
 After June 2009, during the tenure of present government, positive growth. During 2009 to 2010, the number of loan
 Because of the soaring land price, fewer people are able to
It is obvious that the loan amount of enterprises is arising. total loan amount maintained almost a linear growth. At accounts had a sharp, almost exponential, positive growth.
buy either flat or house. To the abled people, they have to
 Personal housing loan is on a downward trend, due to the same time, the number of loan accounts raised from a
pay more to buy, thus the loan amount is still rising.
negative growth to its usual trend.
TABLE 18. LOAN AMOUNT ON REAL ESTATE SECTOR OF BANGLADESH,2006-2011
(TK. IN LAC) FIGURE 35. GROWTH OF LOAN ACCOUNT FIGURE 36. NUMBER OF APARTMENT
AND AMOUNT TO THE APARTMENT BUYERS WHO HAVE TAKEN BANK LOANS
Real Estate Sector June,2006 June,2007 June,2008 June,2009 June,2010 June,2011 BUYERS , 2007-2011 TO PURCHASE FLATS, 2007-2011
Housing Society/ Company 136,034 157,973 172,262 242,461 369,470 623,134
Urban Housing 416,528 520,845 567,748 684,000 837,173 985,242
Rural Housing 12,600 18,997 43,192 29,091 46,596 71,735
Apartment/ Housing Renovation 20,582 37,529 46,465 100,829 113,033 172,660
Flat Purchase 37,796 111,629 160,883 145,995 213,009 310,878
Land Pruchase 16,016 13,537 19,561 34,243 45,898 42,186
Total 639,556 860,510 1,010,111 1,236,619 1,625,179 2,205,835

TABLE 22. NO. OF LOAN A/C (INDIVIDUAL / INSTITUTION) ON REAL ESTATE SECTOR,
2006-2011
Real Estate Sector June,2006 June,2007 June,2008 June,2009 June,2010 June,2011
Housing Society/ Company 922 2,166 1,669 1,088 1,747 2,385
D
 uring the period of 2007 and 2008, the number of loan I n 2006, loan was disbursed to 3066 different apartment
Urban Housing 53,167 62,411 95,383 64,497 72,801 72,472
Rural Housing 25,651 29,448 36,499 27,011 27,415 31,113
accounts and the total loan amount both had a drastic buyers.
Apartment/ Housing Renovation 2,877 `2,711 3,572 8,060 7,387 11,230 negative growth. I n 2009, 34287 apartment buyers were provided with bank

Flat Purchase 3,066 16,459 27,052 34,287 10,022 11,932 T

 he number of loan amount had a constant negative loans.
Land Pruchase 966 1,971 33,199 27,357 15,131 7,515 growth continued up to 2010, but the total loan amount
Total 86,649 115,166 197,374 162,300 134,503 136,647 had a rather steady growth.
Source: Scheduled Banks Statistics, Bangladesh Bank Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012

53 54