High prices of land and construction materials and lengthy and complex proceduers in having permission from different organizations are the major obstacles facing the country's real estate sector.
Business people and realtors came up with the observation, while addressing a seminar titled "Challenges of Real Estate in Urbanization and Decentralization" organized by the Dhaka Chamber of Commerce and Industry in the capital on Sunday.
“Rise in prices of land and constructions materials is a great problem in the way of development of the country’s real estate sector,” DCCI President Osama Taseer said.
Land prices in different parts of Dhaka city including Baridhara, Gulshan increased two to three times, while the prices of constructions materials such as sand, cement, steel sore by two to two and a half times, Osama mentioned.
According to Bureau of Statistic (BBS) data, in the fiscal year 2017-18, real estate sector contributed 6.31% to the Gross Domestic Product (GDP).
The keynote presenter also focused on other challenges facing the sector.
“Land scarcity and value of land along with the high prices of construction materials, lack of experienced professional to construct highrises and skilled labour are major challenges for the real estate sector,” Kazi Golam Nasir, chief architect of Department of Architecture under the Ministry of Housing and Public Works, said in his keynote presentation.
Environment-friendly and sustainable construction and reducing carbon foot print were the other challenge, he said, stressing the need for developing coordination between the government and the real estate sector as regard the government land, share land and affordable housing.
To remove the bottlenecks, the sector people suggest that the government play its role as a facilitator and create a business-friendly environment.
“From what you have said, it seems that there is an impression among you (businesspeople) that the government is not playing its due role as a facilitator. I can assure you that the government is playing its role of a facilitator and a regulator,” said Land Minister Saifuzzaman Chowdhury as chef guest of the programme.
"Today’s economic development is private sector-driven growth and the government is playing its facilitating role properly,” claimed Saifuzzaman.
Minister calls for affordable housing
Responding to the demands and comments from the real estate sector people, the minister urged the private sector to share with the government the responsibility of ensuring afordable housing facilities for people.
“You the private sector people have increased the prices of land through competition. But now you are complaining about high construction cost due to rise in land prices,” Saifuzzaman Chowdhury pointed out.
The real estate sector went through a long-term price correction but there was nothing to be worried, he assured, urging them to focus on affordable housing.
"Its a private sector business. How can the government intervene here? You have to think out how to overcome the challenges," he added.
On the demand for 3% interest rate on loan, the minister said it was not possible and asked, "Will you deposit your money at 3% rate?"
Decentralization must for development of real estate sector
The sector people, who participated in the seminar, also urged the government to ensure decentralization of government activities from the capital to reduce pressures on the city.
“Businesses as well as common people come to Dhaka for education, health, banking and other purposes. It will not be possible to stop this inflow of people unless the government takes theses services to rural people,” said REHAB President Alamgir Shamsul Alamin.
The sector people urged the government to relocate airport from the heart of the city.
Mega cities in Bangladesh were contributing to the development of the economy than the rural areas and 65% of the country's GDP came from the urban areas but due to unplanned urbanization, Dhaka was the second most unliveable city in the world, said Taseer.
Decentralization process of mega cities was not going further for lack of infrastructure, weak communication and transportation system and excessive dependency on the capital city, said the business leader.
He also expressed hope that the initiative of establishing 100 economic zones would help expedite decentralization of Dhaka as well as other big cities.
“Moreover, planned urbanization and balanced decentralization will ensure development of real estate sector,” he stated.
The land minister, however, informed that government was planning for land-zoning soon. About decentralization of Dhaka and other mega cities, he invited entrepreneurs of real estate sector to build satellite towns through public-private partnership.
On top of that, Dhaka North City Corporation Mayor Md Atiqul Islam stressed strong monitoring as the city was growing very rapidly in an unplanned manner.
He said that a city like Dhaka needed proper planning and integration for its further development.
Besides, all the civic facilities should be ensured in the rural areas as well to ease the pressure on the capital, said Atik adding that the DNCC was going to launch "Nagorik App" soon and city people would get online facility using this app.