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Its land, not structure that makes an apartment costly
Syed Ishtiaque Reza
1/12/2005
The fourth edition of the real estate fair held at Dhaka Sheraton Hotel in late December last year attracted huge crowed. The middle -income group visitors however found apartment prices out of their reach.
Real estate developers attribute the situation to unimaginable rise in land prices. "Unless the land price comes down, we cannot keep the prices of flats within their reach," said Dr. Toufique M Seraj who was talking to the FE during the fair. "But we (developers) try our best and in this connection I would say the limitless hunger of the land owners are throwing both of us - the developers and buyers - in odd situation," Seraj asserted. Developers said as land area in Dhaka is dwindling, price of flats is going up.
The other problem for ordinary buyers is interest rate on housing loans. Visitors at the five-day fair that ended on December 27 said flats are so costly that most people cannot dream of owning a house even with the help of lending institutions as their monthly salary cannot meet installment requirements.
Some 75 companies are offering hundreds of apartments ranging from Tk 800 to Tk 4,000 per square feet with a price tag from Taka one million taka 1o million for a flat. A person needs at least Tk 1.5 million to buy a livable apartment in Dhaka.
Dr. Seraj said, Developers have to buy land or make deals with land owners to make flats. In Dhanmondi per bigha land now costs Tk 60 million. As land becomes rarer, price is also going up, he added. He also raised the issue of price hike of building materials especially MS rod. "Yet I would say, we could give some comforts to the buyers if land cost could be reduced. It is the land not materials that makes an apartment costly." he said.
The five-day fair attracted more than 50,000 prospective buyers, organisers. Although every one was not buyer organisers said the visitors showed keen interest about the apartments and plots displayed in the fair and the participants got a good number of spot bookings.
The housing loan providing companies that participated in the fair also received good responses from the visitors. National Housing and Investments received some 750 clients during the fair for its home loan schemes. Delta Brac Housing Finance Corporation and Industrial Development Leasing Company of Bangladesh also got a good number of clients.
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