Developers passed an unsteady time in 2008, owing mainly to sharp rise in the prices of roda vital raw material for construction work–, enactment of a housing law and low volume of apartment sales.
In the first half of the immediate past year, the real estate sector experienced a low sale, driven by the government’s anti-graft operation.
Also, the first half of 2007 marked such a sales-drop.
Industry people say their woes deepened on the unprecedented price hike of rod, which added around 30 percent to the total cost of apartment.
In May 2008, 40-grade rod price reached around Tk 70,000 a tonne from Tk 40,000 five months ago. The prices of 60-grade rod also increased during the period.
In April, the government formed a committee to monitor the prices of rod and made the imports of breakable ships open for all in a bid to stabilize the prices of this building material.
The realtors feared that the housing sector might collapse if proper measures to stabilize rod price were not taken by the government.
In May, the government also fixed the prices of melting scrap at Tk 40,000 and Tk 52,000 for re-rollable scrap.
In addition to the hike in rod prices, the realtors were faced with soaring prices of other construction materials such as brick, sand and aluminium, which forced them to review apartment prices as they found it almost difficult to hand over flats to customers at the prices that were fixed one or two years earlier.
This move also generated bitter altercations between customers and realtors.
However, rod prices began coming down the following months. This was because the rod manufacturers and raw material suppliers were made more accountable for their actions.
According to sector insiders, the most-talked-about issue was the approval of the Real Estate Management Ordinance 2008 in July. The government claimed that the new law aimed at protecting customers from any harassment.
The developers were strongly opposed to the new law. But the government was rigid on its stand, allowing a few minor relaxations.
Even though the first half of the bygone year was bumpy, the sector slowly picked up because of some government initiatives and a rise in the number of apartments sold.
The government also took some budgetary measures to reduce rod prices in the local market, in addition to relaxing the terms and conditions applicable to the rod imports.
In November 2008, the Real Estate and Housing Association of Bangladesh (REHAB) organised its annual housing fair. The fair proved to be fruitful as the sector claimed apartment sales crossed Tk 1,400 crore. The sales volume in the 2007 fair was Tk 800 crore.
Meanwhile, the last quarter of the year experienced a substantial fall in the prices of rod. The 40-grade rod reached Tk 38,000 a tonne and 60-grade Tk 58,000 in October.
However, customers alleged that such a price-drop did not yield any positive results for them, as developers failed to reduce apartment prices.
In November, the Rajdhani Unnayan Kartripakhya (Rajuk) sought applications to allocate plots to those who presently do not own any apartment or land in the capital city. The announcement received enthusiastic responses from people and Rajuk finally extended the deadline for submitting the application forms.
Talking on the issue, REHAB President Tannvirul Haque Probal said the sector witnessed mixed episodes over the year.
“ Despite troubles at the beginning of the year, the situation improved in the last half of the year, due to the changed environment,” he told The Daily Star.