Nothing under Tk1cr: Metro proximity sends flat prices soaring in Uttara, Mirpur

Infograph: TBS

Syed Iftekhar Ali's dream of owning a flat remains on hold.

The retired banker had saved enough, hoping to purchase a flat, preferably in Uttara, where metro rail connectivity offers convenience.

With Tk1 crore in hand, he felt confident about securing a 1,350-square-foot, three-bedroom flat at the recently concluded housing fair in Agargaon.

After exploring more than a dozen real estate stalls, the lowest price he found was Tk1.35 crore – at least Tk10-Tk15 lakh more than a year ago.

A similar dream was dashed for Jamal Hossain, a small business owner with a modest budget of Tk60 lakh. He had set his sights on a compact flat in Mirpur, an area known for its relatively affordable prices and metro connectivity.

After combing through the housing fair, Jamal found nothing priced below Tk1 crore.

Real estate developers at the fair told The Business Standard that demand for flats in areas with metro access, such as Mirpur and Uttara, has increased due to improved connectivity.

They said the metro has made these two areas more attractive to buyers, with developers continuously launching new projects to meet demand.

They also pointed to the rising cost of construction and revisions to the Detailed Area Plan (DAP) as drivers behind the nearly 25% increase in flat prices over the past year in these two areas.

Kawsar Hossain Suman, senior deputy manager of sales at Navana Real Estate, said flats in Mirpur three years ago were selling for Tk5,500 to Tk7,000 per square foot.

"Now, similar flats are priced between Tk10,000 and Tk13,000," he said.

Suman added, "The metro has played a significant role in boosting demand in Mirpur. Buyers are particularly interested in flats that are around 1,600 square feet."

Debabrata Roy, head of sales at Rancon Real Estate, said the firm's condominium project in Shewrapara, Mirpur, is priced at Tk12,500 per square foot. For a 2,100-square-foot flat, this amounts to a total cost of Tk4 crore.

Dhaka metro's Uttara-Motijheel route via Mirpur went into full operation in December 2023.

A survey conducted last year by Bproperty, the country's leading real estate portal, revealed Mirpur as the most sought-after area in Dhaka, with 26.68% of home seekers searching for properties there. Uttara ranked second, attracting 12% of searches, followed by Bashundhara at 8.36% and Dhanmondi at 7.48%.

Mohammad Takib Hossain, general manager of sales at Tropical Homes, said the estate firm has launched several projects centered around the metro rail.

"These include developments in areas such as Mirpur, Matikata and the ECB Chattar. In Uttara, we have three projects, including one in Sector 13, priced at Tk12,500 per square foot," he added.

He noted that sales had improved in December compared to the past two months. In areas like Gulshan, Banani and Dhanmondi, where land is scarce, flats are priced between Tk8 crore and Tk10 crore.

Cost rises due to construction, DAP, loans 

According to Abdur Razzaque, vice president (Finance) of Real Estate & Housing Association of Bangladesh (REHAB), the increase in flat prices is also due to the rising cost of raw materials and labour.

"Two years ago, the price of a flat was Tk1 crore. Now, it has risen to Tk1.5 crore due to increased construction costs," he said. "High interest rates and the DAP restrictions have added to the crisis in the housing market."

Razzaque added that flats were previously allowed to be built on 3.5 katha plots with eight stories under the Dhaka Building Regulations 2008.

"Now, the current DAP allows only five stories. This has led to developers being unable to build on smaller plots, further driving up prices," he added.

Moreover, the interest rate for home loans, which was 9% two years ago, has now risen to 14%. Many buyers, who once took out 50% loans, now find their costs rising.