Unreal plans for housing

The government takes steps to develop plots and construct flats for medium- and low-income group of people without taking any realistic measures to make it a success, said real estate sector leaders.
According to the national budget for 2012-13, around 75,688 plots will be developed and around 2.13 lakh flats will be constructed in Dhaka and other divisional, district and upazila headquarters.
In 2011-12, the government took an initiative to develop 22,800 plots and construct 26,000 flats for the low- and middle-income people in the next three years. Of which, 25,383 flats have already been built and allotment of the plots is still underway.
In addition to that, a total of Tk 160.50 crore has been allotted as housing fund, and as of February 2012, a total of Tk 132.20 crore has been released from the fund.
At a time of inflation and sluggish real estate sales, industry people mark this decision as an unrealistic ambition.
They also urged the government to re-introduce the option to invest undisclosed money in the real estate sector.
The government offers flats at Tk 3,500 per square foot. That means a low-cost apartment will cost Tk 25 lakh to Tk 30 lakh, which is beyond the reach of any middle-income person, said industry insiders.
“The government should consider few things to make the plan a success -- such as lowering the interest rates for housing loans to 9 percent -- to encourage people to go for buying flats or plots,” said Tanveerul Haque Probal, former president of Real Estate and Housing Association of Bangladesh.
The government should also make conditions for loans flexible, Probal said.
"No question should be raised about the source of income for a purchase of an accommodation. Otherwise, the initiative will bring no change in the sluggish sales in the sector.”
The existing housing loan interest rate stands at around 17 percent.
The government has already signed a deal with Malaysia to build four satellite towns under public-private partnership at Dhamrai and Kamrangir Char in Dhaka, according to the budget speech of Finance Minister AMA Muhith yesterday.
That move also gave birth to many questions, as the government has been failing to provide civic amenities to the existing construction projects for both commercial and residential uses in last two years.