The glut in real estate sector
A developer was telling me a few days back that they have almost finished construction of the apartments and are not being able to sell them. They are facing a financial crisis. There is an alarming glut of apartments and commercial spaces in Dhaka. The following reasons may be attributed for the glut and unsold properties.
1. Previously the building height was restricted to six stories in most of the places especially in prime areas like Gulshan, Banani, Baridhara, Dhanmondi, Uttara, DOHS, etc. The land use was seventy five percent. With the surge of population in Dhaka, demand for apartments increased and hundreds of new buildings were built. Distance between two buildings got reduced to four feet on each side which is eight feet in total. The situation heavily compromised the privacy of the occupants.
2. There was clamour for improved building codes. FAR building code rules were introduced with less land use, more heights, fixed floor areas, more open spaces, etc. FAR rules also opened up scope for building more apartments than pre-FAR years. Add to it the greed of the landowners. The land price skyrocketed. Landowners started demanding unthinkable amounts for lands.
3. The builders started constructing more apartments. The market became over saturated. The prices of apartments rose astronomically - beyond the purchasing power of most of the intending buyers. The present situation is more apartments, less buyers. The builders are in trouble, so are the lending banks.
Bangladesh market can't absorb such huge numbers of real estate properties. We urge the relevant authorities to enforce height restrictions. Other land use rules should be applied as per FAR. The greed of the landowners will also have to be brought to an acceptable and rational level.
Dr. SN Mamoon, Dhaka
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