BANGLADESH · DHAKA URBAN RESEARCH SERIES REPORT CHAPTER OF REAL ESTATE
2017
CONTENT
FORWARD
REGION SURVEY
CURRENT SITUATION OF REAL ESTATE MARKET
CONSUMER 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
PREFACE
1
ABOUT THE REPORT
Purpose of the Report The report mainly introduces the general condition of the People’s 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 m² 1 Acer = 4046.86 m² 05
06
RESEARCH INSTITUTE UBI- Urban Bangladesh Institute UBI is a think tank institute founed by governmental and nongovernmental organizations in Bangladesh. It is a non-profit and cross-industries organization with services that covers the entire nation. UBI aims to unite professionals and scholars in architecture, real estate and urban studies, and apply their expertise and knowledeg into pratice. By integrating academic research and economic development, UBI ser ves as an advisor and think tank that will facilitate urban and economic development of Bangladesh, and boost its urbanization progress.
07
Committee Member [Director] Gerhy Tsui
Muhammad Hussain Bhuyan Qixiang Zhu
[Consulting Team] Hugo Day Sophia Yang Wilda Xie Chen Chen Qingqing Sui
[Supporting Institutes] Urban China Research Centre (UCRC) Huadu Architecture and Planning Design Ltd. of Bangladesh
08
2
Part
07
REGIONAL SURVEY
08
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 equivalent to that of China in 1986.
Growth Prediction ●
Bangladesh grows at a rate of 5-6 in city development; so far, there are 28% of population living in cities, and the population will reach 34% in 2025;
●
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
As one of the most densified countries,Bangladesh has a large labor market.
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 China’s in 1994-2004.
2000
Figure 1 ：The national economic statistics of Bangladesh in the recent decade 1738 15.1%
1000
651
796
718
694
10.9% 916
1153 12.5% 102511.9%
1286
1334
1500
20.0%
15.9%
12.4%
11.5%
10.0%
6.6% 3.7%
3.4%
0.0%
0 2004
2005
2006
2007 2008 2009 2010 GDP（Unit：100million dollars）
2011 2012 Growing Rate
2013
2014
(Source: World Bank)
Figure 2 ：Per capita GDP of Bangladesh in the recent decade 20.0%
2000.0 1000.0
461.0
0.0 2004
495.8 485.2 5.2% 2.2% 2005
2006
13.9% 862.0 685.510.7% 762.811.3% 841.510.3% 543.69.6% 619.3
1096.6 14.5% 957.8 11.1% 10.0%
2.4% 2007
2008
2009
Per capita GDP（Unit：dollar）
2010
2011
2012
0.0% 2013
2014
Growing Rate
(Source: World Bank)
Fugure 3：Per capita GDP of China in earlier decade 2000 1000
703
865
1042
604
949
469
821
1135
1994
1995
1996
1997
1998
1999
2000
2001
1274
2002
1490
1732
0 2003
The whole economic level of Bangladesh equals that of China at the beginning of 21st century; Bangladesh gets more stable and rapid development in recent two years.
2004
Per capita GDP（Unit: dollar） (Source: World Bank) 13
14
DEVELOPMENT PLAN OF BANGLADESH
THE SEVENTH 5-YEAR PLAN OF BANGLADESH
Bangladesh Vision 2021
Key Development Targets
Income and Poverty
● I ncreasing
● Attaining
lectricity ● E
●
●
●
●
● ●
Making Bangladesh a middle-income and a high HDI country by 2021, the Golden Jubilee Year of national independence Graduating Bangladesh to a resilient democratic nation ▷ Democratic culture ▷ Right to information and free media ▷ Independence of judiciary ▷ Gender balanced society ▷ Food and energy secured country ▷ Knowledge based society ▷ gender balanced society Strengthening ICT towards ‘digital Bangladesh’ Protecting environment and meeting climate change challenges
and sustaining annual GDP growth rate to 8% by and 10% by 2017 and raising per capita income to US$ 2000; educing the poverty headcount ratio to 15% by 2021; ● R chieve self-sufficiency in food by 212; ● A ransforming the sectoral composition of GDP with the ● T share of agriculture, industry and services standing at 15%, 40% and 45% respectively by 2021; eduction of unemployment rate 15%; ● R ransforming the employment shares of agriculture, ● T industry, and services to 30%, 25% and 45% respectively by 2021; nsuring 100% net enrolment at primary school as soon as ● E possible after 2010; roviding free tuition up to degree level as soon as possible ● P after 2013; ttaining full literacy as soon as possible after 2014; ● A nsure living accommodation for the entire population as ●E soon as possible after 2015; ● Supply of pure drinking water for the entire population as soon as possible after 2011; ● Bring each house under hygienic sanitation by 2013; ● Eliminate all contagious diseases; ● Increase life expectancy to 70 years by 2021; ● Reduce maternal mortality to 1.5%; ● Raise the use of birth control methods to80%; educing infant mortality to 15 per thousand live births by ●R 2021; ● G enerating 11,500 MW by 2015 and 20,000 MW by 2021 and ensuring per capita energy consumption up to 600 Kwh.
● ●
average real GDP growth rate of 7.4% per year over the Plan period; 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 percentage points; Reduction in extreme poverty by about 4.0 percentage points; Creating good jobs for the large pool of under-employed and new labour force entrants by increasing the share of employment in the manufacturing sector from 15% to 20%;
2,300MW by 2020; nsure energy mix for energy security ● E
● ● ●
Sector Development ignificant ● S
●
growth in agriculture, industry and service
sectors;
● ●
the contribution of the manufacturing sector to 21% of GDP by FY20 ubstantial improvement of exports to US$ 54.1 billion by FY20; S chieving a Trade-GDP ratio of 50% by FY20. A
●
● I ncrease
● ●
Urban Development ● I nfrastructural ●
● ●
investment and civic facilities in peri-urban growth centres especially around Special Economic Zones; I nclusive housing and other civic ser vices for urban inhabitants including for people living in informal settlements and slums; I nclusive urban planning based on sustainable land use planning and zoning; I ncreased productivity, access to finance, and policy support for urban micro-small and medium enterprises;
Environmental Sustainability ● I ncrease productive forest coverage to 20 percent; ● I mprove ● ● ●
Water and Hygiene
●
● Safe drinking water for all; ● Proportion ●
of urban population with access to sanitary latrines to be increased to 100 percent; Proportion of rural population with access to sanitary latrines to be raised to 90 percent;
● ●
●
Energy and Infrastructures (Source: 《Perspective Plan of Bangladesh 2010-2021》》and《《Vision 2021》》) 15
coverage to be increased to 96 percent with uninterrupted supply to industries; educe system loss from 13% to 9%, improve energy R efficiency & conservation; onstruction of 6.15 km. long Padma Multipurpose Bridge C at Mawa-Janjira; onstruction of about 26 km. long Dhaka Elevated C Expressway; onstruction of Dhaka- Chittagong expressway and C upgradation of Dhaka-Chittagong highway to 4-6 lane. I mprove the multimo da l tr a nsp or t net work w ith a significant increase in the share of rail and waterway traffic; educe urban traffic congestion with focus on Dhaka and R Chittagong cities; educe the incidence of road accidents R ompletion of the following highway Priority Mega C Projects: Padma Bridge, Deep Sea Port Project, MRT6 project; LNG terminal program, Payra Port Project; Rooppur Nuclear Power Plant Project; Rampal Coal Power Project, Matarbari Coal Power Project;
● I nstall
Generation Capacity of electricity to be increased to
air quality in Dhaka and other large cities through enacting Clean Air Act; romote Zero discharge of industrial effluents; P rban wetland are restored and protected in line with U Wetland Conservation Act; t least 15% of the wetland in peak dry season is protected A as aquatic sanctuary; 00 meters wide permanent green belt established and 5 protected along the coast; and zoning for sustainable land/water use completed; L nv ironmenta l , Climate Cha n g e a nd dis a ster, risk E reduction considerations are integrated into project design, budgerary allocations and implementation process; anals and natural water flows of Dhaka and other major C cities restored;
(Source: 《Perspective Plan of Bangladesh 2010-2021》》and《《Vision 2021》》) 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 thousand foreigners visit the country (over 3 million foreign visitors entered Hangzhou, China in 2014). According to W T TC’s statistics on 184 countries, total contribution of travel and tourism in Bangladesh in 2014 is $7.85billion, absolute size ranking 68th, relative size ranking 168th, contributing 4.1% to total GDP of the country.
The government put emphasis on tourism development with measures to push it. In the next 10 years, tourism and investment will have higher growth rate than the world average level. It is estimated that tourism of Bangladesh will grow 6.5% per year, higher than 3.8%, the world average growth rate, ranking 12th.
WORLD RANKING (OUT OF 184 COUNTRIES)
Relative importance of Travel & Tourism’s total contribution to GDP
68
168
23 GROWTH
LONG-TERM GROWTH
Size in 2014
Contribution to GDP in 2014
2015 Forecast
2015-2025 Forecast
ABSOLUTE
RELATIVE SIZE
FIGURE 4. TOTAL CONTRIBUTION OF TRAVEL & TOURISM TO GDP 2014 BDTbn
12
FIGURE 5. BREAKDOWN OF TRAVEL & TOURISM’S TOTAL CONTRIBUTION TO GDP AND EMPLOYMENT 2014 GDP (2014 BDTbn)
1400
132
1200 1000
199
800
297
600
Direct
200 Indirect
Direct
603 478
25 20
15
14
20
13
20
12
Indirect
20
11
20
10
20
09
20
08
20
07
20
06
20
20
20
05
0
17
Employment
904
400
Induced
Induced = Total contribution of travel&Tourism 18
DEVELOPMENT OF DHAKA
The environment in Dhaka city need to be noticed when the city develop rapidly.
Basic Information haka ● D
●
●
●
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. creage: 360 square kilometers. From 1951 to 2009, A the city acreage of Dhaka increased by 17.88 times, the population increased by 25.09 times; opulation: over 15 million. The population density is 8111 P people per square kilometers, which means 1% the land acreage includes 8.3% the whole population nationwide. lso known as: city of Mosques, the capital of tricycle A
Development Trend o ● S
●
19
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. 0% of urban housing in Dhaka is provided by private 6 developers.
20
DEVELOPMENT OF DHAKA
Price Characteristics in Different Areas otiiheel ● M
●
●
● ●
locates in the city CBD, including Wards 31-36 and several other plates. The land price is high because of its important commercial value. lthough land transaction volume A 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, municipal ser vices and life suppor ting facilities. he high land price areas mostly locate in T downtown area. Meanwhile, the existing residential and commercial planned regions are of high land price, such as Dhanmondi, Gulshan Baridhara, Karwan Bazar(Ward 18,19,39) (many lands in the Bangladesh are so short of plan that the land value cannot be fulfilled). he southern part of the old town close to T the city fringe is of medium price. he fringe of the Dhaka city, especially the T west-north and east-south have lower price. The land price are escalating to meet the needs of city external expansion.
mong ● A
●
the 4 selected fringe areas, the highest price is only 0.006 Million Taka/Sq. Meters ($76/m2), the lowest is below 0.015 million Tk./Sq. meters ($191/m2); and price of fringe areas is less than ½ of L low-price urban areas.
TABLE 1. LAND PRICE & PERCENTAGE Land Price ($/Sq.meters)
Number of Wards
Percentage(%)
High (>$380/m2)
22
24
Medium ($190-380/m2)
33
37
Low (<$190/m2)
35
39
Total
90
100 (Source: Field Survey, 2004-2005)
TABLE 2. LAND PRICE OF FRINGE AREA Name of the Fringe Area
Land Price (Million Taka/Sq. Meters)
Ashulia
0.006
Savar
0.0037-0.0045
Kamrangir Char
0.0045-0.0075
Keranignj
0.0022-0.0045 (Source: Field Survey, 2004-2005)
21
22
3
Part
CURRENT 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
Chittagong
693
1,332
2,265
3,651
5,389
N/A
Khulna
325
632
973
1,442
2,081
N/A
Rajshahi
108
238
517
1,035
1,676
N/A
Urban Population Distribution (thousand)
(Source: Rural and Urban Development Case Study-Bangladesh, Oxford Policy Management, Jun 2004)
FIGURE 6. HOUSING RENT RATE CHANGING IN BANGLADESH ● ●
Two primary property rights: private permanent property rights and 99year of land use right.
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.
RATE OF INCREASE 30% 25%
The original owners of the land include: landowners, government or developers (landowners deliver the land to the developers; after the construction of the buildings, the developers and landowners will share the house). By purchasing land from the landowners for commercial house-building development, the 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 years, the original landowner can retrieve the ownership of the land for free.
20% 15% 10% 5% 0% 1990
(Source: CAB, 2005)
25
1991
1992
1993
1994
1995
1996 YEAR
1997
1998
1999
2000
2001
2002
2003
2004
(Source: Housing Real Estate Sector in Bangladesh Present Status and Policies Implications) 26
THE REAL ESTATE MARKET:
LAND PRICE
The Urban Land Price in Dhaka Dramatically Increased From 1970s to 1980s, Resulting in High Housing Price
only 2.5 to 3.5 times, while the land price raised by 6 to 8 times. (Source: Seraj and Alam, 1989) otijheel region (the city’s CBD) was the only sharply M grow in g a rea b efore the countr y ’s indep endence, indicating that CBD had been relatively prosperous before the independence. he increasing land price is the most critical factor T resulting in the growth of urban housing price.
●
● I n
the 1970s, Dhaka City experienced an unprecedented increase in land price due to Bangladesh’s independence, following rapid development of politics and economy. From 1969 to 1979, the cost of living in Dhaka increased by
●
Critical Factors of Urban Land Price in Dhaka
uration of water logging (Wd) ● D
ype of the neighborhood (planned/unplanned) ● T
istance of the nearest market place (Dmp) ● D
idth of the main toad ● W
istance of the nearest health facility (Dh) ● D
●
istance of the nearest school (Ds) ● D
●
(Wm) idth of the access road (Wa) W urface quality of the main road; Distance of the main road S from the area (Dm)
epth of water during flood (Dw) ● D
istance to the CBD (dCBD) ● D
TABLE 4. CORRELATION MATRIX OF INFLUENCING FACTORS
FIGURE 7. GROWTH RATE OF LAND PRICE IN DIFFERENT DISTRICTS OF DHAKA FROM 1947 TO 1966, 1966 TO 1983 AND 1983 TO 2005
Land Price
Wm
Dh
Wa
Dmp
Dm
Ds
dCBD
Wm
0.736
Dh
-0.379
-0.3597
Wa
0.679
0.6121
-0.29571
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
PERCENTAGE (%) 13000 12000 11000
5000
0.728
Note: important factors figured out here with red rectangles of which considered to be the most key factors on land price. (Source: Field Survey,2004-2005)
4000 3000
TABLE 5. CHARACTERISTICS OF CRITICAL FACTORS AMONG THREE INTERVAL PRICE
2000 1000 0
tr ur
t
a
n
e Av
r
ch
lt a
r
gi
ha
Pa
r
Ba
ap
n
rg
na
gu
m
pu
na
da
Su
Se
Sa
Ra
ra
da
l
za
ee
ab
in
ijh
r
u
za
di
za
dh
Ba
Ba
h
an
r
ia
pu
ag
h
aw
ar
ot
ag
lb
Pu
N
N
M
M
La
m
ar
rw
la
Ka
Is
on
Ba
an
r
n
m
to
nd
ka
Ca
Es
an
k
ab
aw
Dh
Ch
pu
ng
im
Ba
Az
nu e %Increase (1947-1966)
%Increase (1966-1983)
%Increase (1983-2005)
(Source: Land Price in Dhaka City: Distribution, Characteristics and Trend of Changes) 27
Dw
Features
Low Priced Land
Average land price (million Tk. / sq. meter) Average width of the main road (meter) Average width of the access road (meter) Average distance to the community facilities (meter) Average distance to the CBD (km) Average distance to the main road from the locality (meter) Average duration of water logging (hr)
0.009 16 2 500 2.5 500 17
Medium Priced Land High Priced Land 0.02 23 3 260 2.6 400 6
0.04 31 5 200 2.6 260 3 (Source: Field Survey,2004-2005) 28
THE REAL ESTATE MARKET:
LAND PRICE
Land Transaction
ach ● E
● Land
transaction in Bangladesh is accomplished by the Sub Registry Office, and each Sub Registry office retains the transaction records. But the price on these records has lagged far behind the actual market price.
"The official land price in Dhaka has far lagged behind the actual land price, affecting government revenue."
●
land transaction should submit around 12% of the land price as the government land transaction registration tax. ccording to the following datasets of the actual land price, A the transaction tax should triple at least.
TABLE 6. COMPARISON OF ACTUAL LAND PRICE AND OFFICIAL LAND PRICE OFFICIAL LAND ACTUAL LAND PRICE (MILLION PRICE (MILLION TAKA/ SQ. METER) TAKA/ SQ. METER)
RATIO OF ACTUAL LAND PRICE TO OFFICIAL LAND PRICE
54
0.007
0.034
4.5
53
0.007
0.026
3.5
FIGURE 8. COMPARISON OF ACTUAL LAND PRICE AND OFFICIAL LAND PRICE
56
0.01
0.034
3.2
35
0.008
0.025
3
LAND PRICE (MILLION TAKA/ SQ METER)
23
0.008
0.019
2
0.06
62
0.008
0.032
4
0.05
66
0.018
0.041
2
81
0.003
0.01
3.7
86
0.009
0.009
3
71
0.007
0.037
4
0.02
69
0.009
0.034
4.5
0.01
49
0.009
0.056
6.25
36
0.01
0.034
3
39
0.007
0.03
4
0.04 0.03
0
54 53 56 35 23 62 66 81 86 71 69 49 56 59 WARD NO official land price (Million Taka/ Sq. Meter) Actual land price (Million Taka/ Sq. Meter)
29
Land price pushed up the city’s real estate price, but the Dhaka government’s tax revenue did not receive great benefits.
(Source: Official land price was collected from the office of the concerned Sub Registrar and the actual price was collected from field survey. ) 30
THE REAL ESTATE MARKET:
Key Factors Influence the Apartments Price The key factors influencing the price of apartments: land price and construction cost ● Land price ▷The land price had a drastic growth from 2000 to 2010; compared to the year before 2000, the price has doubled, or even increased by 3 to 10 times in some areas. ▷The lack of effective government control over land price in Dhaka had led to skyrocketing price. ▷C onsequently, 63.9% respondents considered the high land price ultimately had a direct impact on the affordability of apartments. ● Construction cost ▷Construction cost had also increased.
LAND PRICE
TABLE 7. AVERAGE PRICE OF APARTMENTS IN DIFFERENT AREAS OF DHAKA FROM 1990 TO 2010 Average Price of Apartments (Taka/ % Increase in price over Sq. feet) the past two decades Year 1990
1995
2000
2005
2010
Between 1990-2000
Dhanmondi
2150
2200
2400
3300
14000
12%
483%
Gulshan
2115
2080
2450
4500
14000
16%
471%
Area
Between 2000-2010
Banani
1750
1950
2200
3100
12500
26%
468%
Baridhara
1850
1950
2150
4000
20000
16%
830%
Lalmatia
1800
1950
2400
3400
8500
33%
254%
Mirpur
1250
1300
1500
2500
5500
20%
267%
Uttara
1650
1750
2000
2700
5300
21%
165%
Shantinagar
1850
1900
2200
2700
5000
19%
127%
Siddeswari
1450
1800
2250
2750
5500
55%
144%
Malibag
1600
1850
2250
2500
7000
41%
211%
Mohammadpur
1450
1600
1800
3500
4500
24%
150%
Shamoli
1350
1500
1600
2100
7000
19%
338%
Kolabagan
1800
2000
2250
2100
5500
25%
144%
Monipuripara
1850
2000
2250
3300
5500
22%
144%
Green Road
1600
1700
2000
2500
5500
25%
175%
Elephant Road Segun Bagicha
1600 1450
1800 1550
2200 1900
2500 2500
5500 6000
38% 31%
150% 216%
Study on Apartment Price in Dhaka
●
key factors influence the apartment price: land price and construction cost. The average price of apartments increased sharply from year 2000 to 2010 specifically in the areas of Baridhara, Dhanmondi, Gulshan, Banani, and Shamoli. In 2005, the growth of price had a drastic growth.
FIGURE 10. GROWTH RATE OF AVERAGE APARTMENT PRICE IN DHAKA PERCENTAGE CHANGE 200% 180%
120% 1500
100%
Average Price of Apartment
80% 1000
60%
0.02
40%
500
20%
2008
2009
2010
2011
2012
2013
2014
(Source: Sheltech Survey) 31
TABLE 8. PRICE OF LAND (TAKA PER KATHA) IN DIFFERENT AREAS OF DHAKA FROM 1975 TO 2010
400%
300%
Average Land Price 219.8%
0.0%
YEAR
0%
1990
2000
2010
YEAR
0%
1990
1995
2000
2005
2010
(Source: statistical yearbook, Bangladesh bureau of statistics)
Year
% Increase in price over the past two decades
1975
1990
2000
2010
Between 19902000
Between 20002010
Baridhara
25,000
600,000
5,000,000
40,000,000
733%
700%
Gulshan
25,000
600,000
2,200,000
25,000,000
267%
1036%
Area
140%
2007
500%
100%
Price of Land (Taka/ Katha)
2000
2006
600%
(Source: statistical yearbook, Bangladesh bureau of statistics)
160%
2005
625.1%
200%
2500
2004
PERCENTAGE CHANGE 700%
● Two
●
FIGURE 9. YEARLY GROWTH OF AVERAGE APARTMENT PRICE IN DHAKA (USD PER SQUARE METER)
0
FIGURE 11. GROWTH RATE OF AVERAGE LAND PRICE IN DHAKA, 1990-2010
Banani
25,000
600,000
2,000,000
15,000,000
233%
650%
Mahakhali
25,000
600,000
1,800,000
12,000,000
200%
567%
Dhanmondi
25,000
600,000
2,200,000
20,000,000
267%
809%
Lalmatia
20,000
600,000
1,800,000
15,000,000
200%
733%
Azimpur
175,000
600,000
1,600,000
5,500,000
167%
244%
Mohammadpur
25,000
500,000
1,200,000
7,000,000
140%
483%
Shantinagar
20,000
500,000
1,500,000
10,000,000
200%
567%
Shamoli
17,500
300,000
1,000,000
4,500,000
233%
350%
Uttara
20,000
300,000
1,000,000
7,500,000
233%
650%
FIGURE 12. GROWTH RATE OF CONSTRUCTION MATERIALS COST IN DHAKA, 1990-2010 GROWTH 2000%
1833.61%
1800% 1600% 1400% 1200%
Cantonment
20,000
400,000
1,000,000
7,500,000
150%
650%
Komlapur
17,500
400,000
800,000
4,000,000
100%
400%
Gendaria
10,000
400,000
700,000
3,500,000
75%
400%
Basabo
2,000
300,000
800,000
3,500,000
167%
338%
600%
Kollanpur
17,500
300,000
800,000
3,200,000
167%
300%
400%
Mirpur
10,000
200,000
700,000
4,000,000
250%
471%
Badda
4,000
200,000
600,000
3,000,000
200%
400%
Goran
4,000
200,000
600,000
2,600,000
200%
333%
Demra
4,000
200,000
600,000
18,000,000
200%
2900%
1000% 800%
661.28% 378.99% 199.72%
200% 0%
0.00% 90
Motijheel
50,000
1,200,000
3,500,000
20,000,000
192%
471%
Brick
Kawran Bazar
41,500
1,000,000
2,500,000
15,000,000
150%
500%
Rod 60 Grade
73.12% 95
00
Fine Sand
74.88%
25.36%
8.15%
05
10
Granular Sand
Flat per Sq Ft
YEAR
Cement
Land
32
THE REAL ESTATE MARKET:
REAL ESTATE PRODUCT
Types of Real Estate Products ommercial ● C
Building: shopping mall, shopping street and
office tower ● Residential Building: flat and apartment ● Mixed-use Building: mainly for residential and commercial use
Trend of Product Types: Complex Town with Multiple Uses and Functions
In recent years, real estate developers began to offer more diverse products. The town model, a kind of Infrastructure could complex satisfies all needs of people including office buildings, shopping centers, housing, schools, swimming pools, stadiums, banks and power plants. At the same time, many of Bangladesh's real estate agencies intend to divide one single building into multiple building as products.
TABLE 9. THE PRICE OF FLAT IN DIFFERENT AREAS OF DHAKA, IN THE YEAR 1970, 1990, 2010 (THOUSANDS BDT PER KATHA) 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 ACCOUNTED FOR THE PROPORTION OF TOTAL GDP Year
Real Estate, renting and business services (% of GDP)
2001-02
8.63
2002-03
8.48
2003-04
8.30
2004-05
8.12
2005-06
7.87
2006-07
7.64
2007-08
7.49
2008-09
7.34
2009-10
7.20
FIGURE 13. COMPARISON OF THE GROWTH OF OVERALL GDP AND REAL ESTATE TRANSACTION
The Role of Construction and Real Estate Industry he ● T
●
●
●
construction and real estate industry is the third pillar of Bangladesh following agriculture and manufacturing, accounting for more than 7% of GDP. T he construction and real estate industry keeps growing; however, comparing to growth rate of GDP, its growing rate is relatively slow, resulting in the declining trend of real estate transactions in the proportion of GDP. A ccording to the Labor and Social Labor Survey, in 2002, the construction and real estate industry recruited 4% of the total labor force in the country, around 1.73 million. In 2005, the number reached to 1.76 million accounting for 3.7% of the total labor force. T he developing construction industry accelerates the relevant building materials industry and also the price of brick, sand, cement and other related materials.
The Development of Construction and Real Estate Industry in Bangladesh
●
angladesh real estate industry has been developing since ● B
1970, with only five real estate developers in the beginning. the 1980s, Dhaka's real estate industry stepped into a period of rapid development; there were 42 real estate developers till year 1988. S ince 1990, the demands of industrial buildings, office buildings, residential housing, roads and other facilities
rom ● F
●
FIGURE 14. CHANGES IN THE NUMBER OF DEVELOPERS IN DIFFERENT TIME
●
increased, the construction industr y in Bangladesh boosted in 2003 with the number of 250 companies. C urrently, Bangladesh has more than 1,500 real estate companies, of which 1081 companies have registered in the Bangladesh Real Estate Association (REHAB); A partment is an important product of the real estate industry in Bangladesh from the late 1970s. It reflects the extent of real estate development in Bangladesh.
FIGURE 15: CHANGES IN THE NUMBER OF APARTMENT PRODUCTS IN DIFFERENT TIME PERIODS
1500
1600 1400 1200 1000 800 600 400 200 0
35
250 5 1970
42 1980
2003
2015 36
THE REAL ESTATE MARKET:
INVENTORY
Real Estate Product Sale he ● T
●
● ●
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 he inventory of apartment product in Dhaka is relatively high. ● T ● According ●
●
●
37
to the data, real estate industry of Dhaka and other 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 period in 2010 that 3018 sets apartments were unsold, estimating an investment of 16.24 billion Taka. In 2014, this number reached 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
While new types of residential products continue to emerge, the inventory of apartments has received great attention.
38
THE REAL ESTATE MARKET:
DEVELOPER
TABLE 11. THE INFLUENCE OF DIFFERENT FACTORS ON INSTALLMENT AND FULL PAYMENT Rate Per Katha
House Payment According to the price list of real estate companies, two kinds of payment are offered: full payment and installment.
Full Payment
Plot Type
Installment 6 Years
3 Years
1 Years
General North Facing
4.25Lac
2.50Lac
3.50Lac
4.50Lac
General South Facing
4.75Lac
2.75Lac
3.75Lac
4.75Lac
Garden/ Park View
5.25Lac
3.00Lac
4.00Lac
5.00Lac
North Corner
5.75Lac
3.25Lac
4.25Lac
5.25Lac
South Corner
6.25Lac
3.50Lac
4.50Lac
5.50Lac
Avenue Side
6.75Lac
3.70Lac
4.70Lac
5.70Lac
Avenue Corner
7.25Lac
4.00Lac
5.00Lac
6.00Lac
Commercial
7.55Lac
5.00Lac
6.00Lac
7.00Lac
A Project of Purbachai Probashi Palli Ltd.
Influencing Factors on House Price Direction to north or south, landscape, at the corner or not, distance to the main roads and commercial centers are main factors affecting the price. Take the highest price (18.25Lac per Katha) as an example 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 US$27,650/Sq metre
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 bout ● A
● ● ●
the company: It primarily specializes in the real es tate sector for the working class and provides residential products. In addition, the company covers business in Press, apartment management and electronic industries. Established in: 2007 First project: Probashi Palli Abashon Prokalpo in 2008 Project List: ▷Probashi Palli Abashon Prokalpo ▷Probashi Palli River View Prokalpo ▷Probashi Palli Satellite Town ▷Purbachal Probashi Palli Ltd. ▷Probashi Palli Abason ▷Shah Amanot City Ltd. ▷Probashi Palli Holdings Ltd. ▷Purbachal Shahparan City Ltd. ▷Next Builders Ltd. ▷Shahjalal City Gazipur Ltd. ▷Faiza Securities Ltd. ▷Purbachal Adnan City ▷Hotel Black Rose ▷Hotel Fahim International ▷Probashi Palli Agro based Industry ▷South Surma Developement Ltd. ▷Probashi Palli Education & Developemt Ltd.
The Price Offered by Probashi Palli Group is Relatively Low Compared to Other Property Developers ● Each real estate company has its own price system. ● I t
is correlated to the company’s target customer base, project location and other factors.
TABLE 12. THE INFLUENCE OF DIFFERENT FACTORS ON HOUSE PRICE Plot Type
Case: Purbachal Probashi Palli arget ● T ●
●
39
customers: the middle class and elites, i.e., police, lawyers, media, civic, public and private sector employees. Location: ▷P urbachal New Town is jointly developed by RAJUK and Probashi Palli Group together. It is visualized to be a wonderful new town and potentially the largest city in South-east of Asia. ▷T he Prime Minister's Secretariat, the Rajuk Office and other important government agencies, as well as foreign embassies, banks and international office buildings will be transferred to the region. ▷D haka University and Oriental Oxford University will move to this area. Project Benefit ▷The city's important roads, high-speed road entrance; ▷First-class hospital; ▷B anks, insurance companies, post offices, community centers; ▷Advanced shopping centers; ▷Bus starting station; ▷close to the vegetables, fresh food production; ▷Playgrounds, parks, conference centers and leisure lakes.
General North Facing
General South Facing
Garden/ Park View
North Corner
South Corner
Avenue Side
Avenue Corner
Commercial
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
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
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
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
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
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
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
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
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
TABLE 13. PRODUCT PRICE OF DIFFERENT REAL ESTATE DEVELOPERS Company Name
Nature/Ft.
3Katha
5Katha
10Katha
20Katha
Probashi Palli Group
South/North/Corner etc.
2-16 Lac Per Katha
2.5-16.5 Lac Per Katha
5-16.5 Lac Per Katha
5-20 Lac Per Katha
East West Property Development Pvt Ltd
North. East. South. Lake View etc.
15-22 Lac Per Katha
18-25 Lac Per Katha
30-32 Lac Per Katha
35-37 Lac Per Katha
Prubachal Bestway city
Based on 30-100 ft
17.84 Lac Per Katha
14-23 Lac Per Katha
17-28 Lac Per Katha
31-34 Lac Per Katha
US-Bangla Assets Ltd
North. East. South. Lake View
11-18 Per Katha
11-18.30 Per Katha
11-17.35 Per Katha
10.10-17.20 Per Katha
Euro Bangla Abashon Ltd
30,40,50,60,120
1.8-2.65 Per Katha
2.35-3.7 Per Katha
2.8-4.35 Per Katha
5.45-7.15 Per Katha 40
THE REAL ESTATE MARKET:
REAL ESTATE ASSOCIATION
RAJUK (Rajdhani Unnayan Kartripakkha) n ● A
● ●
important government agency for urban planning and development control of Dhaka city, integrating with planning, regulatory and real estate development company. 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 priority to solve housing problems for the middle class and
the working class. of the house buyers are political and social elites (such as businessmen, government officials and congress member s) and other groups who have high social status (such as foreign immigrants, lawyers, writers and journalists). 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.
ost ● M
●
TABLE 14. DEVELOPMENT AND SALE OF PURBACHAL AND UTTARA NEW TOWN Purbachal New Town
REHAB (Real Estate and Housing Association of Bangladesh) he ● T
●
●
●
only accredited non-governmental organization joint by social-enterprise developers to standardize real estate development and ensure developers' interests in real estate industry. R EHAB was established in 12th December 1991 with 11 members; at the end of 2002, the association has 89 members. In 2008, it covered 320 members; in the past two years, the member of this association has reached about 1130. R ole of REHAB: ▷O rganize REHAB Housing Fair annual meeting for association members and institutions, especially for important clients from abroad; ▷E stablish reliabilit y by offering Customer Ser vice Standing Committee for arbitration services; ▷Support the government, such as formulating real estate industry policy, laws, rules and regulations; ▷Hold various seminars, conferences for organizations and other professional groups; ▷O rganize REHAB Week for young students for speech and art competitions. I mportance of REHAB: ▷T he Bangladesh government has issued a notice that if developers engage in residential, apartment and commercial industry, association membership must be required to ensure the quality of development; ▷The establishment of Executive Committee: setting out regulations for clients, landowners, peers, the public and the state’s business action, in case of violation of the ordinance, it can be expelled from the association.
Uttara Residential Area (3rd Phase)
SI. No.
Category (and plot sizes)
Total nos. of allotment (and as per plot size)
Category (and plot sizes)
Total nos. of allotment (and as per plot size)
1
Adibashi (3 Katha)
1034
--
--
2
Affected (unknown)
700
--
--
3
Armed Forces (3, 5, 7.5 and 10 Katha)
114 (44, 50, 14 and 6)
Armed Forces (3 and 5 Katha)
(8 and 4)
4
Artist2 (3, 5, 7.5 and 10 Katha)
151 (41, 80, 21 and 9)
Artist2 (3 and 5 Katha)
16 (11 and 5)
5
Autonomous (3, 5 and 7.5 Katha)
654 (261, 308 and 85)
Autonomous (3 and 5 Katha)
69 (47 and 22)
Businessman & Businessman & Industrialist 472 (176, 213, 57 and 26) Industrialist (3 and 5 (3, 5 and 7.5 Katha) Katha)
45 (31 and 14)
6 7
Expatriate (3, 5, 7.5 and 10 Katha)
591 (220, 267, 72 and 32)
Expatriate (3 and 5 Katha)
57 (39 and 18)
8
Freedom Fighter (3, 5, 7.5 and 10 Katha)
296 (110, 134, 36 and 16)
Freedom Fighter (3 and 5 Katha)
28 (19 and 9)
9
Government (3, 5, 7.5 and 10 Katha)
1632 (610, 733, 200 and 89)
Government (3 and 5 Katha)
162 (111 and 51)
10
Journalist (3, 5, 7.5 and 10 Katha)
55 (20, 25, 7 and 3)
Journalist (3 and 5 Katha)
5 (3 and 2)
11
Justice (7.5 and 10 Katha)
14 (13 and 1)
Justice (5 Katha)
10
12
Lawyer (3, 5, 7.5 and 10 Katha)
110 (40, 50, 14 and 6)
Lawyer (3 and 5 Katha)
10 (7 and 3)
13
MP4 (5, 7.5 and 10 Katha)
57 (1, 2 and 54)
MP5 (5 Katha)
83
14
Others (3, 5, 7.5 and 10 Katha)
181 (92, 64, 17 and 8)
15
Private Service (3, 5, 7.5 and 10 Katha)
591 (220, 267, 72 and 32)
Private Service (3 and 5 Katha)
57 (39 and 18)
16
Remaining (3, 5, 7.5 and 10 Katha)
207 (85, 85, 25 and 12)
Remaining (3 and 5 Katha)
26 (17 and 9)
17
Retired (3, 5, 7.5 and 10 Katha)
57 (21, 26, 7 and 3)
Retired (3 and 5 Katha)
4 (3 and 1)
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) state-owned company that provids loans to Bangladesh housing and construction. ● A ● 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. HBFC offers 15–20 year mortgages at commercial interest rates. ● B he loans are mainly concentrated in Dhaka and Chittagong Metropolitan areas. ● T
2
DBH(Delta-BRAC Housing Finance Corporation Ltd. ) pioneer of private financial institutions, also the largest private housing financial institution ● A in Bangladesh. BH has provided housing loan services for 7,500 families in Dhaka and other large cities in ● D Bangladesh. ortgage duration: 15 years of mortgage at the most ● M oan interest rate: the current interest rate is 16.5% ● L
3 43
Currently, Bangladesh has 23 private financial enterprises to provide housing loans.
NHFIL(National Housing Finance and Investment Ltd.) private housing financial institution, offers financial loans for housing construction, ● A purchasing, repairing housing and purchasing house foundation.
44
4
Part
CONSUMER QUESTIONNAIRE
GETTING TO KNOW THE CONSUMERS
Respondents Prefering Self-Building
Respondents Prefering Purchasing A Flat
86 ● 2
85 ● 3
●
●
●
of the respondents intend to build a home in upcoming 10 years, accounting for 43%. A verage monthly family income is BDT95,411.18. O n average, respondents plan to build their houses on 4.6 Kathas of land.
●
of the respondents intend to purchase a flat in the upcoming 10 years, accounting for about 57%. A verage monthly family income: BDT97,300. O n average, respondents intend to purchase a 1,786 square feet flat.
FIGURE 21. EDUCATION LEVEL OF RESPONDENTS PREFERING SELF-BUILDING
FIGURE 25. EDUCATION LEVEL OF RESPONDENTS PREFERING PURCHASING A FLAT
FIGURE 22. OCCUPATION VARIETY OF RESPONDENTS PREFERING SELF-BUILDING
FIGURE 26. OCCUPATION VARIETY OF RESPONDENTS PREFERING PURCHASING A FLAT
FIGURE 23. AREA ORIGINATION OF RESPONDENTS PREFERING SELF-BUILDING
FIGURE 27. AREA ORIGINATION OF RESPONDENTS PREFERING PURCHASING A FLAT
FIGURE 24. AGE DISTRIBUTION OF RESPONDENTS PREFERING SELF-BUILDING
FIGURE 28. AGE DISTRIBUTION OF RESPONDENTS PREFERING PURCHASING A FLAT
Information of the Respondents ost ● M ● ●
respondents are working-class in the service sectors, business and banking sectors. M ore than 90% of the respondents are educated. 6 3% of the respondents are over the age of 40; 79% of them are male.
FIGURE 16. OCCUPATION VARIETY
FIGURE 17. EDUCATION LEVEL
FIGURE 18. AGE DISTRIBUTION
ore ● M
than 50% of the respondents come from Zone-2 (Adabor, Dhanmondi, Mohammadpur, New Market) and Zone-4 (Khilgaon, Motijheel, Paltan, Ramna, Shahbagh, Tejgaon )
FIGURE 19. GENDER OF THE RESPONDENTS
FIGURE 20. AREA ORIGINATION
(Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012) 47
48
HOUSE PURCHASING PATTERN Characteristics of Respondents Preferring Self-Building
Characteristics of Respondents Preferring Purchasing A Flat
urrent ● C
espondents ● R
●
●
●
residence: Zone-4 (Khilgaon, Motijheel, Paltan, Ramna, Shahbagh, Tejgaon) I ntend to build houses in the areas: Uttare, Mirpur, Purbachal, Bashundhara, Mohammadpur, Dhanmondi, and Gulshan. M ajor reasons for preferring a particular area ▷Close to office, school, college, etc. ▷Less expensive (eg. Mirpur) ▷Calm, quiet and good environment ▷Better planned area (Bashundhara area, Purbachal area, Dhanmondi, Gulshan) ▷Residing at that area for a long time and have relatives in that area. C haracteristics of the respondents ▷Respondents from the middle income group, i.e. 30,000 to 45,000 and 45,000 to 60,000 are more interested to build their own houses in the future. ▷A bout 84% from those two groups reside in rental houses.
who are currently residing at Zone-2, Zone-3 and Zone-5 are more willing to purchase flats. or purchasing flats, respondents mostly prefer: ● F hanmondi, Uttara, Mirpur, Mohammadpur, Gulshan● D Banani, Basundhara area, and Malibagh-Mogbazar area. ajor reasons for preferring a particular area ● M Better planned area (Uttara, Bashundhara, Dhanmondi, Gulshan) ▷Close to office, school, college etc ▷Residing at that area for a long time and have relatives in that area ▷Less expensive (Mirpur, Mohammadpur, Uttara) haracteristics of the respondents ● C ▷Part of the low-income or middle income class with monthly income below BDT30,000 or between 30,00045,000, who plan to purchase in 10 years. ▷Part of the high-income class with monthly income of BDT60,000-75,000 of above 75,000 plan to purchase in three to five years, most are bank workers who can receive lower bank lending rate.
FIGURE 29. AREA PREFERENCE OF SELFBUILDING
FIGURE 30. AREA PREFERENCE OF PURCHASING A FLAT
Legend current residential area construction area in the future
Data resource: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012 49
Data resource: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012 50
PREFERENCES AND DEMAND Potential Buyers Are Considered to be the Conflicts Between the Real Living Needs Middle-Income Class. and Market FIGURE 31. DEMOGRAPHICS OF POTENTIAL HOUSING PURCHASERS
low-income
middle-income
arge ● L
high-income
●
50%
45%
5%
(Source: Housing Real Estate Sector in Bangladesh Present Status and Policies Implications)
Units are more popular due to the household 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 between 1000 and 1600 square feet (92 to 148.6 square meters), and only 2% of the apartments are less than 700 square feet (65 square metres), which also shows the negative market acceptance of such small apartments. T he Bangladesh rental market is booming all-time-tigh. ▷B angladesh has no active second-hand housing market because of the high transaction tax and the continuous rise in land prices; ▷According to the questionnaire survey, most people do not have the ability to purchase a house in a short term. ▷The rents in Dhaka rose by 250% from1990 to 2007.
FIGURE 32. FORECAST OF DWELLING NEEDS CHANGING IN LIFE-SPAN
Forecast of Dwelling Needs Changing in Life-Span 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 welcomed.
TABLE 15. ESTIMATED DEMAND FOR FLATS AND HOUSES IN DHAKA Population of Dhaka
14,251,000 (CIA World Fact Book)
10,298,888 (SBS, Dec 2011, BB)
11,875,000 (Census 2011)
Avg. no. of member in a household
4.5
4.5
4.5
Total household in Dhaka
3,166,889
2,288,642
2,638,889
Total household in Dhaka who have 30,000+ income
410,112
296,379
341,736
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
Area Distribution of High-Income Group
Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012 51
Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012
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
Total demand to purchase a flat in 10 years
96,877
70,011
80,725
Note: according to the forecast requirement, monthly income of more than 30000 Taka as potential consumer. 52
HOUSEHOLD INCOME AND LOAN Family Income and House-Purchasing Funding ●
● ●
Among the respondents around 50% (330 out of 676) has an average family saving of around BDT 20,000.
TABLE 16. SAVINGS OF THE RESPONDENTS BASED ON MONTHLY FAMILY INCOME
More than 80% of the respondents declared bank loan as a major source of funding. Most of the respondents affirmed that due to difficulties in getting bank loan they were unable to fulfill their housing needs in the future.
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
Lawyer
BDT 40,000
Service holder
BDT 10,000
Others
BDT 15,000
Real Estate Sector Loan Information ● ●
FIGURE 34. GROWTH OF LOAN ACCOUNT AND AMOUNT TO THE REAL ESTATE DEVELOPERS, 2007-2011
uring ● D
● I n
TABLE 17. SAVINGS OF THE RESPONDENTS BASED ON RESPONDENT’S PROFESSION
Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012
●
FIGURE 33. OVERALL GROWTH OF LOAN ACCOUNT AND AMOUNT TO THE REAL ESTATE SECTOR, 2007-2011
It is obvious that the loan amount of enterprises is arising. Personal housing loan is on a downward trend, due to
difficulties in getting loans, such as Flat Purchasing. Because of the soaring land price, fewer people are able to buy either flat or house. To the abled people, they have to pay more to buy, thus the loan amount is still rising.
TABLE 18. LOAN AMOUNT ON REAL ESTATE SECTOR OF BANGLADESH,2006-2011 (TK. IN LAC) Real Estate Sector
June,2006
June,2007
June,2008
June,2009
June,2010
Housing Society/ Company
136,034
157,973
172,262
242,461
369,470
June,2011 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
172,660 310,878
Flat Purchase
37,796
111,629
160,883
145,995
213,009
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
●
th e p e r i o d of 20 07 a n d 20 0 8 , th e I nte r i m Government period, the number of loan accounts had a sharp positive growth, but the total loan amount for this period had a negative growth. It means loan was disbursed to a number of clients, but the loan amount was lower. During the period 2008 and 2009, the situation turned over. After June 2009, during the tenure of present government, total loan amount maintained almost a linear growth. At the same time, the number of loan accounts raised from a negative growth to its usual trend.
●
●
2006, loan was disbursed to 922 real estate developers. In 2011, this number raised to 2385. D uring the period of 2007 and 2008, loan accounts had a drastic negative growth. The total loan amount in this period also had a slender negative growth. A fter June 2008, total loan amount had a continuous positive growth. During 2009 to 2010, the number of loan accounts had a sharp, almost exponential, positive growth.
FIGURE 35. GROWTH OF LOAN ACCOUNT AND AMOUNT TO THE APARTMENT BUYERS , 2007-2011
FIGURE 36. NUMBER OF APARTMENT BUYERS WHO HAVE TAKEN BANK LOANS TO PURCHASE FLATS, 2007-2011
uring ● D
● I n
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
Housing Society/ Company Urban Housing
922
2,166
1,669
1,088
1,747
June,2011 2,385
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
Apartment/ Housing Renovation
2,877
`2,711
3,572
8,060
7,387
11,230
Flat Purchase
3,066
16,459
27,052
34,287
10,022
Land Pruchase
966
1,971
33,199
27,357
15,131
11,932 7,515
Total
86,649
115,166
197,374
162,300
134,503
136,647
Source: Scheduled Banks Statistics, Bangladesh Bank 53
●
the period of 2007 and 2008, the number of loan accounts and the total loan amount both had a drastic negative growth. T he number of loan amount had a constant negative growth continued up to 2010, but the total loan amount had a rather steady growth.
●
2006, loan was disbursed to 3066 different apartment buyers. I n 2009, 34287 apartment buyers were provided with bank loans.
Data source: A Comprehensive Study on the Real Estate Sector of Bangladesh, 2012 54
