Used flat market taking shape

Some real-estate buyers now opt for used flats as those have all utility connections available. Photo: Amran Hossain

A market for used flats is taking shape as a growing number of consumers are showing interest to buy old flats at low prices than the newly built ones, developers said .
New firms are signing up, while some existing developers are opening up new offices to buy and sell second-hand flats to meet the growing demand. It is slowly replacing the traditional practice of buying or selling old apartments through person-to-person deals.
"In the past, the number of old flats for sale was low. Now, the availability of old flats has increased due to the growth of the real estate sector," said Md Kamal Hossain, executive director of BNS Properties, a leading firm engaged in trading of old and ready flats.
People now sell and buy old flats for a number of reasons, including getting shifted to desired locations or larger apartments, he said.
Person to person deals in handing used flats also take place now. But, trust has appeared as an important factor here with the spiralling prices of property and apartments, he said.
In such cases, a section of buyers prefer deals with companies to avoid being cheated from person to person deals, added Hossain.
Being encouraged by the growth in building new apartments, firms began to enter the segment of used flat market after 2000. Now more than a dozen of companies are engaged in old flat trading, said operators.
Entrance of firms in such trading has been saving buyers and sellers from hassles and misuse of time, said Shariful Islam Tutul, general manager for operations of Ratul Properties, one of the pioneers in buying and selling used flats.
"Now, we play the role of a matchmaker," he said, adding that the market grew by 20 percent a year in value and volume until 2010.
The used flat market got a boost in 2009 in the wake of the government's apathy to provide fresh gas and electricity connections to newly built houses.
This uncertainty for fresh utility connections has led a section of buyers to look for old homes equipped with all such connections.
Presence of utility connections is one of the main reasons for buyers' increased interest for old flats, said Mahfuzur Rahman, chief executive of Flatbazar Ltd, a new entrant in the segment.
"Low price is another factor."
According to these officials, most of the buyers look for used flats which are priced below Tk 1 crore.
Tutul of Ratul Properties said the real estate market was good until 2010. But the demand for both old and new flats slowed down in 2011 due to a stockmarket debacle, he said.
"The overall situation of the sector is not good." said Tutul.
Another reason for the slowdown in sales is lack of finance from banks.
"In the past, banks used to finance in flat purchase randomly. Now they seem less enthusiastic. It has impacted on us," Rahman of Flatbazar.