Realtors look to revamp sales with midsized flats
The rising middle class can become a beacon of hope for the ailing real estate sector, with increasing demand for affordable medium size apartments.
Many middle-income families flocked to the REHAB Winter Fair on its second day, mainly looking for apartments between 900 and 1,400 square feet (sq ft), within a budget of Tk 65 lakh to Tk 1.2 crore.
Real Estate and Housing Association of Bangladesh (REHAB) is organising the fair at Bangabandhu International Conference Centre in Dhaka that began on Wednesday.
“We are looking for a 1,200-1,400 sq ft ready flat in Adabor area. It has to be within Tk 70 lakh as that is the maximum we can afford, even with my easier access to home loans as a bank employee,” said Mohammad Rafi Uddin, assistant vice-president of Social Islami Bank.
His family of four browsed through the different stalls at the fair to find a desirable home. “We do not want to buy any flat that is under construction as there may be complications or delays in the handover process.”
Emdadul Huq, a Supreme Court lawyer, was also seen browsing for a flat within the 900-1,000 sq ft range. “I want to buy a small apartment due to a budget limitation.”
Customers are mainly on the lookout for mid-sized apartments, said Mostofa Mohasin, an executive of Eastern Housing Ltd.
Eastern Housing now has ready apartments in Panthapath, Nawab Katra Road and Uttara. It is offering a 5 percent discount on the price of a ready apartment and 7 percent on ongoing projects, he added.
His company is offering flats within 1,039 sq ft and 4,000 sq ft at a price of Tk 6,600 to Tk 36,500 per sq ft; Eastern Housing has 150 ready apartments and around 350 under construction at the moment, he said.
Most visitors are preferring mid-range apartments in areas such as Shantinagar, Malibagh, Mirpur, Uttara, and Dhanmandi, said AKM Taufiqul Haque, senior sales executive of Navana Real Estate Ltd.
Navana is also offering a discount of up to Tk 5 lakh; the company sold 4 apartments till yesterday afternoon at the fair, he said. “Visitor turnout is higher than expected.”
The sector's sales fell as much as 60 percent in 2013 and the situation is not any better at present as a significant number of completed flats remain unsold despite a stable political environment.
REHAB recently surveyed 209 companies and found that they were sitting on 12,185 units of unsold flats worth Tk 8,811.19 crore. Since the association has around 1,200 member companies, the actual number is far higher, officials said.
The companies surveyed sold 1,749 flats this year so far, in contrast to 1,965 units in 2013 and 2,370 units in 2012.
DOM-INNO Developments Ltd, another leading real estate company, is offering apartments within a price range of Tk 70 lakh to Tk 1.5 crore. “We have already built many medium sized apartments due to a higher demand,” said SM Masuduzzaman, the company's assistant sales manager.
Mid-sized apartments are favourites for service holders, including bankers, said Md Sohel, senior executive of Assurance Developments Ltd. Assurance has about 20 ongoing projects, with more than 1,000 apartments of varying sizes in Dhaka, he said.
Partex Builders Ltd, another real estate company, is selling 1,110 sq ft apartments at Tk 66 lakh at Khilkhet, said Abu Sayem Khandaker, its deputy manager for customer relations.
The company has special offers in the fair for full payment and it has arranged loan facilities for customers as well, he added.
Currently, Partex Builders has around 135 ready apartments in Dhaka.
Hamid Real Estate Construction has also developed a number of projects aimed for the middle-income segment.
Currently, it has a number of projects in Uttara, Norda, Malibagh, Khilkhet and Hatirjheel, said Md Sajib, the company's marketing and sales executive.
The company is selling 1,276 sq ft at Norda at Tk 6,200 per sq ft at the fair premises, where the price normally is Tk 6,700, he said. “We are expecting good sales this year, as customer turnout is good so far,” he said. Zahangir Alam Jami, senior executive of Brick Works Development, said his company is offering a 10 percent discount on apartments at the fair.
The company has a number of small sized ready apartments in Dhanmondi, Mirpur 10 and Pallabi, he said. A customer can buy a 935 sq ft apartment for around Tk 58 lakh in West Dhanmondi.
Banks are also offering discounts on home loans at the fair.
Delta Brac Housing Finance Corporation has cut their interest rate on home loans by 0.25 percentage points for the fair, said Abdur Rahman, assistant relationship officer of loans. It is now charging 12.75 percent on home loans instead of 13 percent. It also halved its loan processing fee to 0.50 percent, he said.
A total of 145 real estate companies and building material suppliers, and five financial institutions are participating in the five-day fair. The fair that is open from 10am to 9pm has witnessed huge crowds yesterday. Visitors can enter the venue for Tk 50 for a single entry and Tk 100 for multiple entries.
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