Bproperty creating an industry for second hand flats

In terms of second hand apartments, those between Tk 50 lakh to Tk 80 lakh have high demand. The reason for this is a continuously growing middle income consumer segment

In only a few years, property solutions provider Bproperty has created a branch of the real estate industry focused on the trade of second hand flats. Mark Nosworthy, CEO of Bproperty, sat with The Daily Star to express his views on the country's real estate sector and how Bproperty fits into the big picture.

DS: Now that we are returning to normalcy, how is demand faring?

Nosworthy: Demand is strong. For Bangladesh, real estate is always a big sector. People are always keen to invest here. So, I think it is always down to confidence. If people feel confident about investing, real estate will have received a large portion of it.

The challenge over the last two years has been a lack of short to medium term confidence due to the pandemic's uncertainties. However, as people became comfortable in dealing with the uncertainties and regained confidence, they started spending, and more importantly, investing again, including in the real estate sector.

DS: You put major emphasis on trade of second hand apartments. Among whom are second hand apartments high in demand?

Nosworthy: In terms of second hand apartments, those between Tk 50 lakh to Tk 80 lakh have high demand. The reason for this is a continuously growing middle income consumer segment. This segment can now afford to buy apartments through savings and borrowing from banks.

Second hand apartments are typically cheaper than newly developed or primary apartments, presenting an opportunity to the middle income segment to become homeowners.

DS: How willing are banks and other financial institutions to provide home loans to buyers?

Nosworthy: Several financial institutions including Delta Brac Housing Finance Corporation, Standard Chartered Bank, Midland Bank and LankaBangla Finance have signed memorandums of understanding with us. When it comes to clients referred by us to them, we deal with most of the mortgage processing. We help with risk mitigation in terms of property documentation, security, property valuation etc.

DS: If we compare the demand for new versus second hand apartments, what do the proportions look like?

Nosworthy: There is a significantly higher number of second hand apartments in Dhaka compared to new apartments. Tens of thousands become available on our platform for sale each year, compared to a few thousand that become available elsewhere.

This is due to individual property owners wanting to sell their investments for a variety of reasons. Sometimes they're looking for a larger property, or property in a different area. This market is quite big, and in my opinion is considerably bigger than the primary market, that is, new apartments.

The challenge, however, is that infrastructure to support the second hand apartment market is nowhere near as strong as that of the new apartments, because you need to check the documents, make sure the seller's ownership is legitimate, see if occupancy certificates are issued etc. There is the need to check changing regulations with RAJUK, such as whether building codes have been followed.

Then comes the valuation issue, like what is the right price for the property in question. As every property is different, things are more complex.

The Daily Star: What value has Bproperty created in the real estate sector?

Nosworthy: Customers need to understand regulations, legality, pricing options, and valuations, and have the properties vetted. This is when you hear people being defrauded or running into issues. So they need to work with professionals, which is why we started Bproperty. It's important for the overall real estate system. I truly believe that Bproperty built the industry. Now, we're the ones servicing the industry and continuing to support it with new solutions. For example, we can help you source the finance, check the legal documents, change your flat's interior to your liking, etc. We can help you build the home you want, but more economically and efficiently than anyone else.

Now we are integrating other components to bolster the industry – interior design, architecture, home loan processing, and legal services.

The Daily Star: What is the size of the second hand property market compared to that three years ago in terms of transactions, apartment size and demand?

Nosworthy: In terms of options it is pretty much the same, more so because people have delayed their decisions to buy or sell. But I expect the market to expand by 10 per cent to 15 per cent in the coming 12 months.

In terms of transactions, possibly around 200,000 to 300,000 transactions happen every year. At the moment, we alone have around 40,000 listings of apartments for sale on our website. On an average, 12,000 to 13,000 properties are newly listed on the Bproperty website every month, just in Dhaka.

Bproperty brokers around 80 to 100 second hand apartments in Dhaka city per month and the demand is increasing day by day with people opting for changing residence locations. The middle class, who want to purchase apartments at a comparatively cheaper price, prefer second hand apartments.

Those in the price range of Tk 50 lakh to Tk 80 lakh and of sizes from 1,200 square feet to 1,500 square feet are the most in demand among the middle income segment. We get a lot of queries for even smaller apartments, for example 800 square feet to 1,000 square feet. But at the moment, the supply of the smaller properties is not there. A majority of the property options available are between 1,200 square feet and 1,500 square feet.

The Daily Star: Do you have any expansion plan?

Nosworthy: We expect our transactions and revenue to double this year compared to that in 2021.

We have already started processing mortgages, and moving into fintech solutions to support financial institutions in this regard. So, we expect to combine home loan processing and property sales. We already have quite an active interior solution team, so we can now help renovate a property for either sale or to make it more suitable to needs.

The Daily Star: How was business over the last two years?

Nosworthy: Probably like most businesses, our business had tough moments, for example with the lockdowns. There were obviously some months when everyone was at home. If you're at home then you can't view properties, and if you can't view properties, there is no selling.

But I think in the last six months to eight months, we have picked up considerably. In 2021, we grew by around 260 per cent. So, we've had a really strong end to the year. That has set us up really well for this year.