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A home of one’s own

  • Published at 06:12 pm April 21st, 2018
A home of one’s own
As the extent of globalization spreads, urbanization increases in developing countries. The ever-increasing urban population is creating an increasing demand for housing and shelter. Right to shelter is fundamental. However, with Bangladesh being a developing and middle-income country, it is a hard task for everybody to avail that right now. The concept of real estate in Bangladesh, as far as I know, emerged after the 1970s, given the need for Bangladesh to develop its own infrastructure to support the people’s needs, and as a result of the business environment beginning to flourish. As time progressed, real estate has become a subject of keen interest for the general public, businessmen, and other stakeholders. The real estate and housing sector is one of the main drivers of any nation’s economic development and industrialization. This has become the case in Bangladesh too, with real estate emerging as a crucial sector of the economy; not only does it generate direct and indirect employment opportunities, but it also stimulates demand for ancillary industries with a spillover effect for others.
It is in the interest of all parties to work together to provide security and confidence in the industry
In the last decade or so, people inf Bangladesh, especially Dhaka and Chittagong, have shown an increased interest in owning apartments. There are a number of reasons for this. However, with land in the cities becoming scarce and demand for housing pushing land and construction costs higher, buying a ready apartment has become an attractive financial proposition. Furthermore, the habits of Bangladeshis have changed as well, with heavy influences from the West and other more developed countries. A reluctance of individuals to invest a lot of time and energy in house construction and navigating its challenges, is making owning an apartment increasingly popular. Like any industry, regulation and improvements in the infrastructure of an industry, particularly legal framework, will always follow rapid growth and development in that sector, and the real estate industry in Bangladesh is no different. There are many challenges in the sector that is limiting market growth.

Bureaucratic hurdles

The complicated bureaucracy, lack of trust, and harassment by the intermediaries have created such a chaotic scenario, that paperwork for buying a flat or land has become a scary process. Historically, changes of title and other real estate transactions were recorded manually, with processes that would vary from region to region. As this process was manual, it was prone to error with incorrect or incomplete wording, leading to delays in clearing a property title. When a recording error is detected, solving these issues typically involves finding the concerned people and paperwork to reconcile the issue. However, this is a lengthy process with no short term fix. This is particularly an issue when it comes to dealing with dated properties, given that information gaps can only be resolved through the provision of death certificates and succession certificates clarifying the ownership history of a property within a family. Government authorities have recently begun trying to streamline this process through digitalization -- the use of electronic systems and processes as part of its vision of a Digital Bangladesh. However, this new system will take time to completely roll out across all regions.


There have been many cases of property documents being fraudulently recorded, leading to insecurity and a lack of trust with the industry as a whole, as well as scepticism when it comes to dealing with third parties. This scepticism creates an air of suspicion when dealing with other parties (buyer or seller), ultimately creating issues when it comes to entering into new transactions to buy or sell property. People, and rightly so, want to protect themselves from being hurt or ripped off by others, and unfortunately this creates negative perceptions of any industry.

Money matters

Liens are one of the most common issues in obtaining clear titles. If there is an outstanding lien on a property, steps need to be taken to release the claim. This typically means making an arrangement between the lien-holder and the property owner to pay off any outstanding amount. While liens may be cleared at closing time, they are not actually omitted until the closing agent makes sure the payments are made and all documents have been correctly submitted. Any error or delay in the process can interrupt issues with the property title. Pricing is a big challenge, especially within Dhaka and other major cities of Bangladesh. Real estate developers face many challenges providing affordable housing to  city residents due to soaring land prices and higher construction costs. In order for developer costs to be covered in the face of higher costs, the price of property is being held at a higher rate, which in a lot of cases is actually well ahead of the market rate for a property in that area. Given the lack of transparent information for buyers and sellers in the market regarding appropriate market pricing for a property, Bangladeshis have to make up their own minds when it comes to the price of a property. Given this uncertainty and fear of making poor investment decisions, Bangladeshis look to invest their money in other areas outside of real estate. High costs of borrowing, high transaction and registration fees are all deterrents to purchasing a property. With high property prices in cities, adding further costs through transaction fees and interest costs (if financed through bank loans), coupled with other risks and challenges, all lead the purchaser to defer the decision to enter the real estate market.

Unlocking our potential

Despite these challenges, the real estate sector in Bangladesh is presenting many opportunities that can be unlocked if certain steps are introduced. Progress in the development of the industry is possible with the collaborative efforts of all parties in the industry.  The private sector, developers, and the government can together ensure a secure industry for Bangladeshi’s to operate in. The major cities are all currently very densely populated and with increasing urbanization, there is a need to open up new residential areas on the outskirts of the cities which (i) reduces  pressure on city infrastructure, making the workings of any city more efficient; and (ii) provides more affordable housing for Bangladeshis to purchase and live in, providing security for themselves and their families. Bangladeshis do not want a home to simply live in -- they desire a space of their own that they can cherish for a lifetime. With the introduction of expert advice, assistance with legal affairs for property transactions, transparent processes, and education in market pricing and different property options, we will see a rapid increase in the engagement of Bangladeshis with the real estate market. It is in the interest of all parties to work together to provide security and confidence in the industry in the coming years.   Mark Nosworthy is Group Chief Financial Officer, Emerging Markets Property Group (EMPG), operator Zameen.com in Pakistan and Bayut.com in UAE, Chief Executive Officer, Bproperty.com.
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