Flat prices beyond reach of middle class

The organiser of the real estate and housing fair has gone all out to woo buyers, bringing in developers, construction and building material companies and loan providers under one roof.

And yet, the apartment prices remain out of reach of the middle-class demographic that tends to flock to such fairs.

Take, Abdul Latif, a mid-level executive of a private company, who came to the flagship fair of the Real Estate and Housing Association of Bangladesh with his wife with high hopes of placing a booking for a flat in the Mirpur area.

But his hopes were dashed: there were no flats for less than Tk 6,000 a sft, meaning he has to shell out about Tk 80 lakh to buy a flat of 1,000-1,200 sft.

“It is beyond my capacity,” said a crestfallen Latif.

Still hopeful, he went to a finance company next to see what would be the size of the instalment if he borrows from them.

“If I borrow Tk 50 lakh I have to pay about Tk 50,000 per month for 20 years. The instalment is 80 percent of my monthly salary,” he added.

At the five-day event, the price tag on a three-bedroom flat, the most common apartment form factor, depending on the location, ranges from Tk 80 lakh to Tk 1.5 crore.

Priya Prangon, a leading housing developer, currently has nine ongoing projects but none with flats that cost less than Tk 1 crore.

One of its projects is the Priya Prangon Bashantika, which is located at Malibagh Chowdhury Para in Khilgaon. The project has three types of flats, ranging from 1,436 square feet (sft) to 1,476 sft.

Each sft costs Tk 9,500, meaning that the smallest flat would cost one more than Tk 1.36 crore, excluding the registration fees.

The company is asking Tk 8,500 per sft for another pipeline project in the same area.

Assurance Developments, another leading developer, has no flat that costs less than Tk 1 crore.

“The minimum cost of our flat is Tk 90 lakh and maximum Tk 4 crore,” said Shafiqul Alam, senior sales executive of Assurance Developments.

He said they are getting a good number of enquiries from prospective buyers this year.

While the reputed developers are asking more or less the same prices as Priya Prangon and Assurance, some little known ones are seeking as low as Tk 4,000 per sft.

Lenders are offering home loans at interest rate of 8.5 percent to 11.5 percent.

Eastern Bank is offering home loans at 8.5 percent interest — the lowest in the fair.

IDLC Finance has set a range of 10.25 percent to 11.5 percent, LankaBangla 10.5 percent, National Housing and state-owned Bangladesh House Building Finance Corporation 9 percent each.

As of yesterday, the fair saw 14,000 visitors in the three days it has been open, according to REHAB.

Over 200 real estate and housing stalls, 30 building materials producing companies and 13 financial institutions are taking part in the fair. Some companies are displaying smart technologies that are used to manage homes efficiently abroad.