High material cost drops flat sales by half in Dhaka

Mahfuz Emran: Banker couple Tariq and Abida live in Mohammadpur of the capital. The salary is fairly large. Lives in a rented house. Staying in their own flat in the capital is a long-standing hope. Has also taken initiative several times, contacted housing companies. The account did not match. Recently, the price of Tk 4,000 to Tk 4500 square feet is being asked for Tk 6000 to Tk 7000. Due to the increased price, they have withdrawn from the decision to buy a flat for the time being.
Tariq said that even two years ago, the prices of flats were slightly lower. After Corona, the prices of flats have increased a lot. Now if you want to buy a flat, you have to take additional loan, you have to calculate the interest. Taking these aspects into consideration, flats are no longer being bought.
Jaynal Abedin, a resident of Basabo, said the same thing. He said, there was some money in the capital market, I used to import electrical products from China for some money. Now business has declined due to lack of LC. I was thinking to buy a flat by raising capital market money. But the price is relatively high. So, I bought some land in the village with that money. The housing companies that I have approached are quoting higher prices. In fact, due to the increase in the price of construction materials, the traders have increased the price of flats.
Meanwhile, the sale of flat-apartments has come to a standstill due to the increase in the price of construction materials. Traders say that rods, cement, tiles are being sold at high prices. The raw material prices of these materials have increased. In this, the housing project also incurs an additional cost of 10 to
25 percent. At the same time, bricks and sand are being sold at increased prices. Flat-apartments are not for sale due to these reasons. Sales this year have halved compared to 2021.
Currently MS rod is being sold at Tk 90 thousand to Tk 92 thousand 300 per ton in the market. Rod prices have never been so high before. Even a month or two ago, these rods were Tk 85-86 thousand. Currently there is no cement below Tk 500 in the market. Cement is being sold at Tk 500-530 per bag of 50 kg. Earlier last March, the price of cement rose up to Tk 520. But a month ago, these cements were Tk 400-420. And the price of tiles has increased from 10 to 25 percent.
According to a report by Bangladesh Association of Construction Industry (BACI), the price of rods has increased by about 60 percent per ton, while cement has increased by 22 percent per bag. Because the raw material scrap for rod making and clinker raw material for cement production have to be imported. Moreover, stone 24 percent per cubic foot, brick 22 percent per thousand, coarse sand 50 percent per cubic foot, electric cable (1.5 BYA) price increased up to 94 percent.
Traders are asking higher prices for many housing projects that are ongoing or completed. The increased price is being demanded on the pretext of the price of construction materials. Rehab, the association of housing traders, has received several complaints about this. Later, it was decided in the rehab board meeting that after the start of the work, if the additional cost (the effect of increase in the price of rod-cement etc.) is less than 10 percent, the flat should be sold to the buyer at the previous price. And if the cost is more than 10 percent, the price will be determined based on the agreement between the buyer and the seller.
Rehab vice-president Sohel Rana told that housing traders do business with transparency. Traders don’t want customers to suffer. Traders are working keeping in mind the needs of the buyers. Those who had grievances are being resolved logically.
According to Real Estate and Housing Association of Bangladesh (REHAB) sources, about 15 thousand flats are sold in the country every year. From 2010 to 2012, an average of 15,000 flats were sold. An average of 12,500 flats were sold from 2013 to 2016. 14 thousand flats were sold from 2017 to 2020 and 15 thousand flats in 2021. However, compared to last year (2021), November of this year (2022) has not sold even half.
Only about 8 thousand flats have been sold till November. Traders had hoped that 15,000 flats would be sold in 2022 as well. The prices of flats have also gone up slightly due to the increase in the price of construction materials. And that’s why the sales have collapsed.
Kamal Mahmud, vice-president (first) of housing traders’ association Rehab, said that everything stopped during the corona virus. Since then, the price of construction materials has been increasing. Because there was no import at that time. Later, due to the Russia-Ukraine war and the abnormal increase in the dollar, the businessmen in this sector are suffering more. A logical solution has been provided in case of rising cost of construction materials in ongoing projects. We are working to build a livable city.
We are working to build a livable city. If 10 percent or more of a project is affected by cost of goods, it will be resolved through buyer-seller negotiation. We don’t want anyone to get hurt here.
Recently the price of tiles has increased by 10 to 25 percent. Among these, the price of small tiles has increased the most. The price of small tiles has increased by over 20 percent. And the price of large tiles has increased by 10 to 25 percent.
The traders say that about 70 percent of the ceramic products are tiles. About 20 percent of the remaining 30 percent is sanitaryware. 10 percent on crockery products like dinner sets, tea sets, mugs, bowls. There are more than hundred companies manufacturing tiles in the country. But 90 percent of the big market is occupied by 10 to 15 companies.
Manager of Tajim Tiles Rubel told that the sale of tiles has been very bad for six months. Even six months ago, goods (tiles) worth 3 to 4 lakh rupees were sold daily, now Tk 50 to 60 thousand are being sold per day. Already the prices of all products have increased in the market. Living has become a big issue for people now. The building is now relatively low. Again, due to increase in the cost of fuel and raw materials, the price of tiles has increased.
Again, due to increase in the cost of fuel and raw materials, the price of tiles has increased. Earlier we sold the tiles at Tk 32 per square feet, now the price is Tk 38 to 39. All in all, sales are low.