cts after repayment of the bank loan. About 20 to 22 thousand such flats of 1100 members of Real Estate and Housing Association of Bangladesh (REHAB), the organisation of country housing businessmen now remain unsold. As a result, they are not undertaking projects. Not only of the private housing enterprises, rate of construction of houses at individual level has also declined. Many industrial sectors are facing debacle due to such stalemate in housing sector. If a house is constructed rods, cement and other raw materials are used in it, alongside different household equipment are purchased in the new house. Even the purchase of a Tk 100 flower vase also gives impetus to the pottery industry. According to housing businessmen, 269 associated industrial units are linked with housing sector. If a house is constructed, the sale of the products of those units increases. There are 12000 industrial units which produce various items. According to the Bangladesh Bureau of Statistics (BBS), the number of industries and factories in production sector of the country is 42,592. The 1200 industries and factories facing debacle due to setback in housing sector accounts for 28 percent of total industries. According to the BBS survey, 13906 industrial units of the total 42,592 industries are failing to utilize 25 to 50 percent of their production capacity. The impact of the setback in the housing sector is falling on the country’s total industrial production. In this sector the growth is declining, the construction of productive sector to the GDP is also falling. It is clear in BBS statistics. The rate of growth in country’s productive sector was 10.53 percent in 2012-13, but in 2013-14 it fell to 8.68 percent. The share of productive sector in GDP has also decreased. In current value, the construction of productive sector in GDP in 2012-13 was 17.27 percent, but it stood at 17.21 percent in the following year. The government cannot attain the target of GDP growth due to slow down in a big portion of economy. The government has a plan to achieve 8 percent GDP target to make Bangladesh a middle-income country. But Bangladesh is still long away from that. Over the last two years the GDP growth target was fixed at 7.2 percent, but government could not go near that. Latest in 2013-14 financial year 6.12 percent growth target has been achieved as against the target of 7.2 percent. The housing sector has been facing a setback for half a decade. REHAB general secretary Md Wahiduzzaman said the disaster in the sector started during the caretaker regime in 2007-2008. As the country was going through a critical juncture, sale of plot and flat significantly declined. Later, price of plot and flat went out of the reach of common people. The electricity supply authorities stopped giving new connection. As a result, the real estate businessmen were unable to hand over their flats to the customers. On July 13, 2010, providing new gas connection to the residential building came to a halt. The housing sector faced another blow the same year. In April, the Bangladesh Bank closed Tk 300 crore refinancing scheme for housing. The low and middle-income people used to get loan at minimal interest. On the other hand, Bangladesh House Building Finance Corporation (BHBFC) cannot grant loan for a couple of years due to shortage of fund. Wahiduzzaman thinks the stock market collapse of 2010 acted behind fall in housing sector customers. When the stock exchange index was in bull market trend, people were encouraged to buy share instead of flats. But they lost their capital due to share market disaster. Detailed Area Plan (DAP) has aggravated the situation. No new housing project was approved in last 12 years due to DAP-related complications. The restricted use of land for housing project has resulted in flat price hike. People have lost their interest for buying flats. The disaster which started during caretaker regime has been intensified due to other factors afterwards. There is a long queue of unsold flats now. The number of unsold flats has become doubled and redoubled. REHAB statistics as of 2013 show 22,000 flats worth Tk 21,500 crore remain unsold. All members of REHAB are suffering from the crisis of unsold flats. Wahiduzzaman said re-rolling of money is important for economy. If money is re-rolled, sale of flat and business transaction will increase. But the money is locked in the banks. MA Bahar, managing director of Onward Developers Ltd, said at the outset they sold flats in Mirpur at Tk 6,000 per square feet. Now the customers are not interested to buy such flats at Tk 4,000 per square feet. About this, Wahiduzzaman said the prices of flats in every area have fallen by 15 percent. Not only real estate entrepreneurs but also land owners in Dhaka and Chittagong have lost interest in constructing new buildings. People are not keen to build new houses for lack of money and loan facility. Nearly Tk 1.5 crore is needed to construct a five-storey building with two units in every floor on 3 kathas of land. Usually, the land owners enter into an agreement with real estate companies to construct the house. The land owner gives land while real estate companies bear the cost. Later, the flats are distributed among themselves as per share mentioned in the contract. If a land owner would like to construct the house of his own, he would like to depend on the bank loan. They pay the installment of loan every month after getting house rent from the tenants. The BHBFC is unable to grant loan to people for lack of fund. It demanded Tk 500 crore to the government but in vain. The lack of interest among people in building house has been manifested in the statistics of RAJUK and Chittagong Development Authority (CDA). RAJUK approved design of 2,700 building in 2012-13 while CDA 2, 548. The number was 2,500 in Dhaka and 2,449 in Chittagong next year. Golam Mostofa, RAJUK director (Development and Control), said the number of approval is deceasing instead of increasing. People are losing interest in constructing houses for lack of flat sale, he added. There are Tk 75,000 crore investments in the country’s housing sector, housing sector businessmen claimed. Among the 14 big industrial sectors, this sector stands third on the basis of close connection with the economy. Some 1.5 crore people of the country are involved in housing sector and production of 12000 industrial projects are related to the sector. Developers said that at least 770 bags cement and 1.5 tonnes rod are required for constructing 1000 square feet roof of a building. There are 269 small and big industrial units of cement, steel and ceramic of the country which are surviving on constructing thousands of roofs, factories, bridge and culvert and other infrastructures. But the recent condition of this sector is very disastrous. Among the total use of cement in the country, about 25 percent is used by private house owners and developers are using 35 percent and rest 40 percent is used for government development works. Though the demand for cement for the development works of the government is increasing but it is much less compared to the total production capacity. The total production capacity of the country’s cement factories is 3 crore tonnes annually. But the country is manufacturing 1.80 crore tonnes annually. The total production capacity of rod and steel is 70 lakh tonnes while its demand is 35 to 40 lakh tonnes. Industrial owners of the country increased their investment for raising production capacity in view of export and increase its use. But the recent recession destroyed the hopes. RR Builders is one of the oldest rod shops in the country. This company started their business 90 years ago. Now this company is running 9 shops equipped with rod and cement. MA Bahar, Managing Director of RR Builders told this correspondent, “The sale of rod and cement is declining by 50 to 60 percent from its earlier level. Pointing a building in front of his shop, he said that among the floors of the bhaban only one floor is sold. Lender bank in exchange for the loan purchased the floor. Flats are not sold even three years after construction.” Now the furniture shopkeepers at Begum Rokeya Sarani in Mirpur eagerly wait for customers to sell their product. Most of them fail to sell any furniture in three or four days in a week. A proprietor named Majibar Rahman of a furniture producing company ‘Habib Complex’ of Shewrapara said, “Even we cannot manage monthly shop rent after selling furniture as in most of the days in a week we are unable to sell furniture.” He also claimed that after rescheduling loan for two times it would be not possible for me to pay the bank loan for which the bank authority has given one month time. Otherwise the land which was given under mortgage to bank has to be sold by auction. Though there is no instance of declining prices of products in the country, the prices of construction materials are gradually decreasing. A proprietor of M/S Pragati Trading and Company of Mirpur Kazipara said the cost of per ton rod declined by Tk 20 thousand compared to last three years. He said one is related with other. The price of rod has decreased as the selling of flat has declined. Once shop owners provided advance payment to the factory owners for getting rod availably but now the scenario has changed as factory people concerned come to the shops and request the shop owners to take their product. Even they provide their products on credit. He also said the price of per bag cement was Tk 480 to Tk 520 a few years ago while the same is selling at Tk 420 to Tk 460 now.
Sunday, October 19, 2014
Related industries also sink with housing sector:Daily Sun
cts after repayment of the bank loan. About 20 to 22 thousand such flats of 1100 members of Real Estate and Housing Association of Bangladesh (REHAB), the organisation of country housing businessmen now remain unsold. As a result, they are not undertaking projects. Not only of the private housing enterprises, rate of construction of houses at individual level has also declined. Many industrial sectors are facing debacle due to such stalemate in housing sector. If a house is constructed rods, cement and other raw materials are used in it, alongside different household equipment are purchased in the new house. Even the purchase of a Tk 100 flower vase also gives impetus to the pottery industry. According to housing businessmen, 269 associated industrial units are linked with housing sector. If a house is constructed, the sale of the products of those units increases. There are 12000 industrial units which produce various items. According to the Bangladesh Bureau of Statistics (BBS), the number of industries and factories in production sector of the country is 42,592. The 1200 industries and factories facing debacle due to setback in housing sector accounts for 28 percent of total industries. According to the BBS survey, 13906 industrial units of the total 42,592 industries are failing to utilize 25 to 50 percent of their production capacity. The impact of the setback in the housing sector is falling on the country’s total industrial production. In this sector the growth is declining, the construction of productive sector to the GDP is also falling. It is clear in BBS statistics. The rate of growth in country’s productive sector was 10.53 percent in 2012-13, but in 2013-14 it fell to 8.68 percent. The share of productive sector in GDP has also decreased. In current value, the construction of productive sector in GDP in 2012-13 was 17.27 percent, but it stood at 17.21 percent in the following year. The government cannot attain the target of GDP growth due to slow down in a big portion of economy. The government has a plan to achieve 8 percent GDP target to make Bangladesh a middle-income country. But Bangladesh is still long away from that. Over the last two years the GDP growth target was fixed at 7.2 percent, but government could not go near that. Latest in 2013-14 financial year 6.12 percent growth target has been achieved as against the target of 7.2 percent. The housing sector has been facing a setback for half a decade. REHAB general secretary Md Wahiduzzaman said the disaster in the sector started during the caretaker regime in 2007-2008. As the country was going through a critical juncture, sale of plot and flat significantly declined. Later, price of plot and flat went out of the reach of common people. The electricity supply authorities stopped giving new connection. As a result, the real estate businessmen were unable to hand over their flats to the customers. On July 13, 2010, providing new gas connection to the residential building came to a halt. The housing sector faced another blow the same year. In April, the Bangladesh Bank closed Tk 300 crore refinancing scheme for housing. The low and middle-income people used to get loan at minimal interest. On the other hand, Bangladesh House Building Finance Corporation (BHBFC) cannot grant loan for a couple of years due to shortage of fund. Wahiduzzaman thinks the stock market collapse of 2010 acted behind fall in housing sector customers. When the stock exchange index was in bull market trend, people were encouraged to buy share instead of flats. But they lost their capital due to share market disaster. Detailed Area Plan (DAP) has aggravated the situation. No new housing project was approved in last 12 years due to DAP-related complications. The restricted use of land for housing project has resulted in flat price hike. People have lost their interest for buying flats. The disaster which started during caretaker regime has been intensified due to other factors afterwards. There is a long queue of unsold flats now. The number of unsold flats has become doubled and redoubled. REHAB statistics as of 2013 show 22,000 flats worth Tk 21,500 crore remain unsold. All members of REHAB are suffering from the crisis of unsold flats. Wahiduzzaman said re-rolling of money is important for economy. If money is re-rolled, sale of flat and business transaction will increase. But the money is locked in the banks. MA Bahar, managing director of Onward Developers Ltd, said at the outset they sold flats in Mirpur at Tk 6,000 per square feet. Now the customers are not interested to buy such flats at Tk 4,000 per square feet. About this, Wahiduzzaman said the prices of flats in every area have fallen by 15 percent. Not only real estate entrepreneurs but also land owners in Dhaka and Chittagong have lost interest in constructing new buildings. People are not keen to build new houses for lack of money and loan facility. Nearly Tk 1.5 crore is needed to construct a five-storey building with two units in every floor on 3 kathas of land. Usually, the land owners enter into an agreement with real estate companies to construct the house. The land owner gives land while real estate companies bear the cost. Later, the flats are distributed among themselves as per share mentioned in the contract. If a land owner would like to construct the house of his own, he would like to depend on the bank loan. They pay the installment of loan every month after getting house rent from the tenants. The BHBFC is unable to grant loan to people for lack of fund. It demanded Tk 500 crore to the government but in vain. The lack of interest among people in building house has been manifested in the statistics of RAJUK and Chittagong Development Authority (CDA). RAJUK approved design of 2,700 building in 2012-13 while CDA 2, 548. The number was 2,500 in Dhaka and 2,449 in Chittagong next year. Golam Mostofa, RAJUK director (Development and Control), said the number of approval is deceasing instead of increasing. People are losing interest in constructing houses for lack of flat sale, he added. There are Tk 75,000 crore investments in the country’s housing sector, housing sector businessmen claimed. Among the 14 big industrial sectors, this sector stands third on the basis of close connection with the economy. Some 1.5 crore people of the country are involved in housing sector and production of 12000 industrial projects are related to the sector. Developers said that at least 770 bags cement and 1.5 tonnes rod are required for constructing 1000 square feet roof of a building. There are 269 small and big industrial units of cement, steel and ceramic of the country which are surviving on constructing thousands of roofs, factories, bridge and culvert and other infrastructures. But the recent condition of this sector is very disastrous. Among the total use of cement in the country, about 25 percent is used by private house owners and developers are using 35 percent and rest 40 percent is used for government development works. Though the demand for cement for the development works of the government is increasing but it is much less compared to the total production capacity. The total production capacity of the country’s cement factories is 3 crore tonnes annually. But the country is manufacturing 1.80 crore tonnes annually. The total production capacity of rod and steel is 70 lakh tonnes while its demand is 35 to 40 lakh tonnes. Industrial owners of the country increased their investment for raising production capacity in view of export and increase its use. But the recent recession destroyed the hopes. RR Builders is one of the oldest rod shops in the country. This company started their business 90 years ago. Now this company is running 9 shops equipped with rod and cement. MA Bahar, Managing Director of RR Builders told this correspondent, “The sale of rod and cement is declining by 50 to 60 percent from its earlier level. Pointing a building in front of his shop, he said that among the floors of the bhaban only one floor is sold. Lender bank in exchange for the loan purchased the floor. Flats are not sold even three years after construction.” Now the furniture shopkeepers at Begum Rokeya Sarani in Mirpur eagerly wait for customers to sell their product. Most of them fail to sell any furniture in three or four days in a week. A proprietor named Majibar Rahman of a furniture producing company ‘Habib Complex’ of Shewrapara said, “Even we cannot manage monthly shop rent after selling furniture as in most of the days in a week we are unable to sell furniture.” He also claimed that after rescheduling loan for two times it would be not possible for me to pay the bank loan for which the bank authority has given one month time. Otherwise the land which was given under mortgage to bank has to be sold by auction. Though there is no instance of declining prices of products in the country, the prices of construction materials are gradually decreasing. A proprietor of M/S Pragati Trading and Company of Mirpur Kazipara said the cost of per ton rod declined by Tk 20 thousand compared to last three years. He said one is related with other. The price of rod has decreased as the selling of flat has declined. Once shop owners provided advance payment to the factory owners for getting rod availably but now the scenario has changed as factory people concerned come to the shops and request the shop owners to take their product. Even they provide their products on credit. He also said the price of per bag cement was Tk 480 to Tk 520 a few years ago while the same is selling at Tk 420 to Tk 460 now.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment