4,000 flats worth Tk2,000 cr remain unsold in Chattogram

Highlights

• Tk 5,000 crore investment in the housing sector in CTG
• REHAB has 83 members and more than 200 unregistered housing estabishments in CTG
• Country's housing market is worth Tk 58,000 crore
• Annual demand for the flat is 1.2 lakhs

Housing company Finlay Properties that usually sells eight to 10 flats per month is currently working on eight projects. However, due to Covid-19, its business has been in recession since February.

At present, its 150 flats with a market value Tk75 crore are unsold, however, the company has to pay the salary of the employees every month. As a result, the company is already in a financial crisis due to lack of income.

Nur Uddin, manager of Finlay Properties, told The Business Standard, "Usually the flats we build don't go unsold but due to Covid-19, 150 flats remain unsold and crores of investment have got stuck."

"On the other hand, the buyers of the sold flats are also delaying the repayment of loans due to the crisis, but hundreds of workers have to be paid every month. Banks are also pushing for loans," he added.

Not only Finlay Properties, but thousands of flats in Chattogram's housing sector are unsold due to the Covid-19 recession. The medium and small quality establishments have been most in trouble due to no sale of flats. Many companies have already stopped working on the project due to the financial crisis. New projects are also closed.

According to the Real Estate and Housing Association of Bangladesh (REHAB), the association has 83 members in Chattogram. However, there are more than 200 unregistered housing establishments in Chattogram. There is an investment of around Tk 5,000 crore in the housing sector in the port city.

Mahabub Tanvir, co-chairman of REHAB Chattogram Chapter, told The Business Standard after several years of a slump in the housing sector, the government has taken steps to reduce the registration fee, but the collapse has started again Covid-19 crisis. Even if Covid-19 leaves, it will take time to return to good fortune in this sector. The housing sector is in deep crisis. Many traders have expressed concern about survival.

This year's budget has allowed investing black money in the housing sector, which is a positive aspect. So, traders in this sector are a bit optimistic.

However, many entrepreneurs will lose out on this sector if registration fees and home loans are not made easy, he added.

Mahfuz Ullah Bari, general manager of Sanmar, a real estate company, echoed Mahbub Tanvir.

According to REHAB, the country's housing market is worth Tk58,000 crore. The annual demand for the flat is 1.2 lakhs. The organisation says such an impact was felt during the 2013-14 political instability.

The downturn in the housing sector is reflected in the Chattogram Development Authority's (CDA) design approval too. 

Shahinul Islam Khan, the chief urban planner of the CDA and chairman of the building construction committee, told The Business Standard that normally 200 to 250 applications for design approval are submitted every month. Design approval was closed for a long time after the outbreak of Covid-19 started.

"No new application is coming when the design approval process starts after the end of the general holiday. Currently, I am getting design applications for some small buildings, but real estate companies are not applying for design approval," he added.