Three jolts at a time- crash in capital market, suspension of gas supply to residential buildings and closure of Tk 300 crore rolling fund. The deadlock that started through these incidents of 2010 are yet to disappear. The depression in sale of land and flats began in 2011 and it deepened farther in 2012. The year of 2013 passed off through the worst political unrest in the history of Bangladesh. In 2014 a complex tangle has been created in housing business. The businessmen had made investments in new housing projects in the current year. But in case of sale it was found that there were no buyers. As a result the number of unsold flats continued to rise. Housing businessmen had been saying for long that recession was continuing in their business. But there was no information based on upto date survey as to how much bad it was. Real Estate and Housing Association of Bangladesh (REHAB) has recently started a survey on the housing establishments. According to the information collected from 209 establishments till last Monday, 12185 flats/units of these enterprises are remaining unsold. And as a result about Tk 8,811 crore is remaining stuck. Against this backdrop, with hope and despair swinging in heart and offering big discounts the Housing Fair is beginning in the city from today. Housing entrepreneurs claimed that their sale fell by 50 percent earlier. The current time is marked by a sharp rise in sale. It is too poor to cover the damage. Many corporate bodies are selling flats without profit with a view to collecting money to pay salaries and bank loans. As a result, price of flat has fallen by 30 percent. Many business giants are plunged in deep crisis by investing in the housing sector as their money is trapped. They can neither move forward nor backtrack. Situation has prompted them to wind up their other projects. The housing is the third largest sectors in the country’s economy with an investment of Tk 2, 00,000 crore. Fate of 269 backward linkage industries is dependant upon housing sector. Good days of housing sector coincide with sale of backward linkage products. It contributes to the GDP growth. Mamunur Rashid, director of Business School at BRAC University, underscored the need for a government survey on the status of the housing sector. He said the potential sector like housing should not be ignored any more. He referred to dependence of many backward linkage industries upon the real estate project. According to the above economic expert, the shortage of easy money and economic recession are hitting hard the housing sector with many flats remaining unsold. The banks stopped giving loan to the housing sector at its critical time. Many entrepreneurs could not complete their construction works. As some businessmen have a tendency not to finish their project, the customers cannot trust them. Dr Toufic M Seraj, managing director of Sheltech, said the collapse of 2011 resulted in fall of sale by 30 percent. Drawing analogy with the business status in 2009, 2010 and 2011, he said the sale of flats decreased by 50 percent now. He held the recession at home and aboard responsible for the situation. He is skeptical about any quick recovery from the setback. Citing the example of USA and Japan, he said it takes 7/8 years to overcome the situation there. Dr Toufic thinks many projects are not likely to be handed over to the customers. It is identical situation for the time of global recession. Hong Kong faced the dire situation in 1997. Many projects did not see light in 10 years. A business giant of Chittagong invested money in housing project few years back. The company is trapped now. It can neither move forward nor backward. Two other projects of the company have been wound up. Its outstanding loan is estimated at over Tk 500 crore. It is leant an electronic business group of Dhaka stepped in housing project. As a large amount of money is trapped in the housing sector, it needs to pay loan collecting money from other sister concerns. It cannot pay salaries to the staffs timely. Sale of accessories items including iron, cement, furniture, colour and ceramic has fallen significantly. Instead of new employment, the company has resorted to termination of the existing manpower. REHAB President Alamgir Shamsul Alamin told this correspondent, “In fact nobody is in good position. Condition of some of them is very bad. Mentioning decline in flat price, he said, realtors count huge loss as they are selling flats without making any profit.” After the political turmoil of 2013, peace has been restored after January 5 election in the country. There was no political turmoil in the country for last one year. Political situation was being stable slowly. But businessmen are frustrated hearing the news of preparation for the new movement by the opposition parties. Alamgir Shamsul Alamin said, “People’s confidence is returning back slowly. Crisis of real estate sector would be resolved but uncertainty may create in real estate sector if the political turmoil starts again in the country.” He also said the investment of real estate sector is long-term matter. Customers invest in this sector very cautiously. Investment of this sector decrease due to political turmoil.” Dr Taufic M Seraj said, “Now flat selling is increasing. Earlier we sold 100 flats which came down to 50 later. But now we are selling 55 which is better than earlier.” For overcoming the present crisis businessmen advised government to provide loan to the customers. For this reason they demanded for reopening mobile fund of the Bangladesh bank again. Dr Taufic M Seraj thinks that housing is one of the basic demands of the people. Government should provide low interest rate loan among the low and middle income people of the country to purchase flat. He demanded reopening of mobile fund facilities of the Bangladesh Bank. Bangladesh Bank under its refinancing fund gave Tk 20 lakh to each applicant for purchasing flat which was closed in 2010. Commercial banks received the loan amount from Bangladesh Bank on 5 percent interest rate while the commercial banks took 9 percent interest from the customers. After the closure of that fund now customers are depending on commercial banks for taking loan to purchase flat. Commercial banks of Singapore are disbursing housing loan to the customers at 2.8 percent to 3 percent interest while Malaysia and India are giving at 4.39-4.65 percent and 10-10.75 percent respectively. Alamgir Shamsul Alamin said having loan from commercial bank is tough for the commoners as interest rate is very high and the loan is sanctioned for short time. He said providing loan for the housing sector is the safest because there is 100 per cent mortgage. A man of 40 years of age should be provided 20-year-period loan, a man of 30 years should be offered 30-year-period loan and a man of 20 years should be given 40-year-period loan. The loan is given to the people in foreign countries in such a way. Liakat Ali Bhuiyan, vice-president of the Real Estate and Housing Association of Bangladesh (REHAB) said they have applied to the government to raise a fund of Tk 10 thousand crore. And it has been mentioned in the application that buyers will get loan at less interest rate. Housing and Public Works Minister Eng Mosharraf Hossain also assured of raising this fund. Earlier, buyers of flat had no accountability on their income tax. But the government withdrew this special facility. Under this circumstance, many people considering the situation unsafe at home are siphoning off money abroad, businessmen alleged. According to a report published by Global Financial Integrity (GFI), some $178 crore equivalent to Tk 13.732 crore was siphoned off. In the last one decade, around Tk one lakh crore was laundered. Analysing the laundering rate, it was seen that less money is siphoned off at the beginning of any government but it gets pace at the last moment of government as volatile situation prevails.
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