Developers review previous deals
Customers have alleged that developers are now raising the prices of apartments reviewing the previous agreements with their clients, despite the government's new law has a provision to bring the violators of such deals to book.
Developers claimed around 46 per cent rise in the prices of construction materials in the last two years have forced them to go for a hike in the flat prices to a level beyond the amount agreed between a customer and a real estate company.
" Most of the real estate companies are now reviewing their agreements with clients, particularly for those construction works which were scheduled to be completed between 2006 and 2007 in the backdrop of unprecedented price hike of construction materials," said Tanvirul Haque Probal, president of Real Estate and Housing Association of Bangladesh (REHAB).
According to sources, during the period the prices of MS rod increased by 90 per cent and brick by 70 per cent. Usually, MS rod accounts for 30 per cent of the total cost of an apartment.
The sector people said they are to raise Tk 300-Tk 500 per square feet.
"When we had signed agreements with buyers the rate was from Tk 1,300 to Tk 2,000 per square feet, which is now from Tk 3,000 -Tk 3,500. so even if we charge additional Tk 300-Tk 500, it will not be any financial loss for the buyers," claimed SR Chowdhury, senior manager (Administration and Recovery) of Multiplan Limited, a real estate company.
"It is not unlawful to increase the cost, as our agreement papers with buyers have clauses that enable us to review cost in case of unusual price hike of construction materials," he further said.
Customers said the real estate companies are increasing the rate as high as Tk 1,500 per square feet.
"It is logical for the real estate companies to increase selling cost who conducted their construction last year and early this year, but the apartment costs are being increased which were constructed in 2006 when construction material prices were comparatively low," said a customer whose apartment cost was increased by Tk 500 per square feet.
M Mohsin Mia, who oversees customer services at the REHAB, admitted that some developers are taking advantage of the situation and increasing selling prices of the apartments that were constructed before the prices of construction materials soared.
He, however, said during the last two years expenditure on per square feet of any apartment increased by Tk 600, while the market price of per square feet of apartment increased by Tk 1,000.
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