Steep fall in sales forces realtors to stop taking new projects
The real estate sector has almost stopped taking new projects following a drastic fall in the sales of plots and flats in recent times. The realtors said registration of new projects witnessed a significant fall last year for absence of a good business environment. They said new projects of the developers declined by around 75 per cent in 2013 compared to that of the previous year.
“In last one year we didn’t have any new project for extension of business due to drastic fall in dealing”, Toufiq M Seraj, Managing Director of Sheltech — a leading real estate and construction company — told the FE.
He said the business of real estate had been in trouble over the last two years and the political instability in the country is now adding to its wound; so they are not interested in new projects.
Mr Seraj, also a former chairman of Real Estate and Housing Association of Bangladesh (REHAB), said they have around 40 ongoing projects and usually they take 12-15 new projects a year but in 2013 the number was only three because it was the worst year for the sector.
During the last one year their company’s sales also declined by more than 50 per cent, he added.
According to REHAB, a recent study has found that a total of 338 companies are yet to hand over 7,014 flats with an approximate value of Tk 7.73 billion.
Managing Director of Building For Future Ltd Tanveerul Haque Probal told the FE that in 2006, about 5,684 flats were built by the real estate companies and in 2010-12 the number went up to 25,000. But the figure began to decrease due to lack of political stability and recent economic recession.
He said a few months back the government ensured that it would give fresh gas and electricity connections but it did not keep its words.
REHAB data shows that around 22,000 ready flats worth Tk 160 billion have remained unsold and the construction work of over 8,000 flats remained suspended due to political impasse in 2013.
Managing Director of Great Wall Ceramic Shamsul Huda said: “Not only the real estate sector but also the backward linkage industries including MS rod, cement, paint, furniture and tiles are in dire straits as demands of their products have fallen by over 70 per cent”.
He said, “The ceramic industry has now been very affected due to not having any new project in the real estate sector”.
In recent times their business has drastically fallen; so they are not expanding their existing plants, or planning to invest in new projects now, he added.
Vice chairman of Diamond Cement Ltd Abdul Khalique Pervez told the FE: “Our business with the real estate sector fell by about 60 per cent in last one year”.
He said real estate business which has continuously been falling now is a big problem for the cement industry.
According to the REHAB, the sector provides employment to 3.5 million people. The present turnover of this sector is about Tk 280 billion a year.
The association has around 1,200 member companies, but the actual number of realtors will be far higher.
Courtesy of The Financial Express
