Flat sales halved for high price

5,000 flats still unsold

Zarif Mahmud: Recently, the price of construction materials related to the housing sector has skyrocketed. The price of rods, an essential construction material, has broken all records in history. In the retail market, each ton of rods was seen to be sold at lakhs of taka. Cement and other construction materials are being sold at high prices. Bricks, sand, filled sand, stones also set records. The cost of workers involved in construction has also increased by leaps and bounds. This price increase has affected the housing projects.
The cost of construction has also increased with the price of construction materials. Project concerned have to bear additional cost of one and a half to three thousand taka per square foot. The seller is forced to sell at a higher price. Because of this, the buyer’s interest in buying a flat or apartment has decreased. Due to non-sale, the concerned have to count the loss. Small investors are in big money crunch.
Sector stakeholders say that the government’s dream of eliminating the housing problem of the middle class may be false. As the prices of various materials have increased, now the dream of buying a flat is going beyond the middle class. They demand to reduce the price of construction materials now to build housing for everyone in the city.
Habib Ahmed invested in the ongoing projects of the housing sector. For this, he pays the entire amount to the company, so he can buy a flat at a slightly lower price than the market price. After the completion of the project, he sold his flats to common buyers. Between the end of 2021 and the beginning of 2022, Habib Ahmed booked four flats on two floors in the project of a developer company in Banshri area of the capital. Later he paid the full amount. In between, the price of construction materials has increased. Along with the price of everyday products. He could not sell his four flats from the company.
Habib Ahmed told Daily Industry that due to the increase in the cost of construction materials, the cost of flats has also increased. Now I am not getting buyers due to high price. Moreover, increasing the price of daily commodities has also put a strain on the money of the buyer. Now the money is stuck in the flat, I can’t move myself.
According to Real Estate and Housing Association of Bangladesh (REHAB), an organization of housing traders, about 15,000 flats are sold in the country every year. However, about 5,000 flats in the recent financial year remain unsold. In FY 2021-22 where flat-apartments were sold 15,000. During the outgoing fiscal year 2022-23, sales were around 10,000. The sales drought broke even in the opening month of the current (2023-24) financial year. In the future, more crisis may be concentrated in this sector. Which affects the flat. In this, the housing sector will reach the threshold of breaking the dreams of middle-class families.
Besides, from 2010 to 2012, an average of 15,000 flats were sold. From 2013 to 2016, an average of 12,500 flats were sold. 14,000 flats were sold from 2017 to 2020 and 15,000 flats in 2021. The prices of flats have also gone up slightly due to the increase in the price of construction materials. This has led to a collapse in sales.
According to Rehab sources, the price of rods (per ton) has increased by Tk 35,000 in a span of two years. In 2020, one ton of road was Tk 64,000, in 2021 Tk 70,000, in 2022 it was Tk 94,000. In 2023, it comes to Tk 100,000. Prices have increased for cement, sand, stone, brick, Thai aluminium, grill and railing, general electrification, sanitation, tiles and labor costs. Two years ago, a bag of cement was available at Tk 375 to Tk 405 but now it has crossed Tk 560. Red sand was Tk 8 per safety now it has increased to Tk 32 to Tk 34. White sand was Tk 25 per safe, now it has crossed Tk 60.
The price of filled sand has increased. In 2021, a car full of sand was sold for Tk 1,200, in 2023 it is being sold for Tk 2,200 to Tk 2,500. In the span of two years, the price of stone has increased from Tk 80 to Tk 87. Two years ago, the price of stone per square foot was Tk 160, now it has increased from Tk 240 to Tk 250. The price of bricks increased and was seen to be sold at a maximum of Tk 14. Prices rise to record levels for Thai aluminum, grills and railings. High prices are now the cost of labor.
On the other hand, the price of flats has increased due to the increase in the price of construction materials. Flat owners have also increased the rent of their respective flats. Common people are in various crises. Absurd prices of daily commodities add to public life. Many have left big flats and moved to small flats. Many in the city have sent their families to villages to meet expenses. He left the flat and chose a sublet.
Talked about these with Rehab vice-president (first) Kamal Mahmud. He told Daily Industry that most of the buildings will be smaller in size as a result of the new DAP’s ‘fur’ reduction. Businessmen are not able to enter into any agreement with the land owner. As housing becomes smaller, prices are likely to rise. Moreover, the biggest reason for the increase in the price of flats is the increase in the price of construction materials.
He said, due to these reasons, the dream of housing is going beyond the reach of the middle class. Affordable housing for all will be difficult to come by in the future. To solve this problem, it is necessary to reduce the price of construction materials. Government should take action in this regard. At the same time, due to the increase in prices, traders are also suffering. Now the sale of flats has decreased significantly.