Ctg Realtors Struggle As Expats Suspend Investments

With a business collapse already led by Covid, manufacturers of small and medium-sized apartments in Chattogram are bracing for another blow thanks to soaring building material prices and falling incomes for Bangladeshi expatriates – the main one buyer of properties.

Estate agents say expats – mostly in Middle Eastern countries – aren’t investing money in new homes now because they haven’t yet recovered from the pandemic blues.

Apartment bookings fell 50% during the pandemic, and 10% to 15% of previous orders were canceled, resulting in a loss of Tk 200 crore for the port city’s real estate sector, according to sources in the port city. Bangladesh Real Estate and Housing Association (Rehab).

“We are going through a very difficult time,” Abdul Qayyum Chowdhury, president of the Rehab Chattogram section, told The Business Standard.

The housing association in Chattogram has 80 members. In addition, there are at least 80 other housing companies in the area. The annual investment in the sector, which involves around 5 lakh people, amounts to more than Tk 1,000 crore.

According to housing entrepreneurs, the sector experienced a business crisis in 2012 and began to recover in 2016. The sector suffered a severe blow last year, reversing that entire recovery.

Rehab Chattogram Chairman Abdul Qayyum Chowdhury said expats are their main clients and want medium and small apartments.

“But Bangladeshis in the Middle East now have income problems. Meanwhile, the cost of living at home has also increased. They can’t even think of investing money in the housing sector now,” he added.

According to the Bangladesh Bank, remittances to the country are declining. Last October, expats sent the country $ 1.6 billion – the lowest in 16 months and 21% less than the corresponding period last year.

ASM Abdul Gaffar Meyazi, a member of Rehab and managing director of East Delta Holdings Ltd, said about 20% of their apartment reservations were canceled during the pandemic, and now many customers are asking for a refund.

“The medium and small businesses in the sector are in difficulty,” he added.

Large companies unharmed

Chattogram Rehab chairman Abdul Qayyum Chowdhury said about a dozen real estate agents in the port city who make upscale and larger apartments are doing well despite the pandemic situation.

“The reason is that the buyers of these high-end properties are either government officials or businessmen who have not suffered any loss of income,” he noted.

Companies that sell apartments at Tk4,000 or less per square foot do not get new bookings. But those who sell apartments at Tk 6,000 per square foot or more are doing good business like before the pandemic, according to the head of the association of real estate agents.

With demand almost stable, high-end real estate agents said they kept their constructions going during the Covid lockdown last year and this year too. They said they adapted “special plans” to get rid of the Covid fallout.

Tanvir Shahriar Rimon, CEO of Ranks FC Properties Ltd, said: “Construction at our sites continued while maintaining sanitary security in May of last year, although our market peers suspended work. With isolation rooms at all of our sites, we even worked in duplicate. “

He said their accelerated construction activities met with strong customer confidence as buyers paid down payments.

“When containment was imposed again this year due to the second wave of the pandemic, we vaccinated all workers. We tried to ensure the safety of our customers’ investment,” he said. added.

Project cost up 30% due to more expensive raw materials

Real estate agents said construction commodity prices rose 11% to a low to a high of 53% in the past six months. During the period, the prices of the bar, cement and bricks climbed 32%, 10% and 12%.

Industry insiders said the price of grade 60 bars commonly used in building construction was Tk 57,000 per tonne at the end of last year. Currently the price has increased to 74,500 Tk. The average price of a 50 kg bag of cement was between Tk 360 and Tk 390 last year, which is now between Tk 420 and Tk 480.

East Delta Holdings Ltd managing director ASM Abdul Gaffar Meyazi said their project costs increased by 30% due to soaring prices for building materials, which ultimately affected bookings and sales. flat.

Ranks Properties CEO Tanvir Shahriar believes the increase in fixed prices makes sense.

According to Rehab sources, an apartment per square foot in the Panchlaish of Chattogram would cost 8,000 Tk in 2015. The price is now around 12,000 Tk.

In Halishahar, the apartment per square foot is 6,000 Tk while the 2015 rate was 4,000 Tk.

The price of an apartment per square foot in the upscale district of Khulshi is now 14,000 Tk, up from the rate of 10,000 Tk ten years ago. Apartment prices in the regions of Agrabad, Nasirabad, Bayezid and Chandgaon have also increased at a significant rate.

Even with more expensive raw materials and poorer customers, Rehab Chattogram President Abdul Qayyum Chowdhury sees the light at the end of the tunnel.

He said sales of apartments in the port city had increased by around 25% since July, as some of the customers who had stopped paying down payments returned.

Source link

About Gloria Turner

Gloria Turner

Check Also

Neighbors Foundation grateful for donations from real estate agents, students

Rebecca Simpson of Hunt Real Estate Services brings donations collected by the real estate company …