• Thursday, Jan 20, 2022
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Dhaka luxury residential market catches foreign investors eye

  • Published at 08:02 pm September 9th, 2021
Dhaka
DHAKA TRIBUNE

According to RIU, the pandemic did not have a stifling impact on the real estate market

Bangladesh’s resilience amid Covid-19, coupled with retention of the top spot in South Asia, has caught the eyes of investors looking at emerging markets in various sectors, including real estate, says the Research Intelligence Unit (RIU).

They made the observation in a recently published country report on Bangladesh’s real estate market, setting a buoyant tone for the sector.

London-based RIU, which recently inaugurated its office in Dhaka, wrote in the report that there is a sustained demand for residential properties along with a prospected surge in the luxury residential real estate market of the country.

The report entails an analysis of key market segments, including the luxury and semi-luxury residential apartment market, the commercial real estate market, hotels and bare lands. 

According to the report, the strategic regimen with favourable policy tools like the broader spectrum of loan products, enticing interest rates and convenient banking services have been the key drivers to the successive scale downs in social inequalities over the years.

This creates a promising way ahead in the real estate sector too, the report reads.

Based on the exclusive RIU interviews with Bangladesh’s leading developers and property agents, it found that the pandemic did not have a stifling impact on the real estate market.

“The real estate sector saw a resurgence of apartment sales once the lockdown measures were lifted in July of last year,” said Mahzabin Chowdhury, head of Marketing at Bproperty, to Dhaka Tribune.

“The bottled demand from that tremulous period resulted in a very positive response for the next eight months and Bproperty saw a record number of transactions take place during that time. While the fresh new lockdown measures this year curtailed some of that momentum, the reopening prompted apartment sales to rise again,” she added.

Other prime stimulators towards the expected burgeoning demand for luxury apartments from mid-sized homes are drastically underpinned by the lifestyle change among the rising middle class, RIU said.

In addition, the inclination towards close proximity to the city with an increasingly educated population and working crowd adds to the projected brisk trade.

Urban population by country 

Source: RIU Bangladesh Country Report 2021

Examining the preferred location highlights that areas such as Gulshan, Dhanmondi, Mirpur, Banani and Mohammadpur accommodate the highest number of residential properties.

These are currently the most targeted for residential property constructions.

Commentators also postulate that the observed shift in residential property availability towards the north of Dhaka is predominantly due to the extension of the city to Purbachal.

“Property prices are going up in most areas but it is the newly developing areas that are seeing the most increase. Apartment prices in Aftab Nagar, Bosila and other similar areas are rising faster,” says Mahzabin.

The classification of the market by the RIU as tiers, tier 1 (luxury), tier 2 (semi-luxury) and tier 3 (affordable luxury), depends on several factors inclusive of price, location, facilities, features, fittings and branding of the development.

According to the report, the accumulation of the supply of luxury and semi-luxury apartments in Dhaka is approximately 120,000 units.

Cumulative tier wise supply of luxury and semi-luxury apartments 

Source: RIU Bangladesh Country Report 2021

As underlined further, tier 3 apartments had observed slow progress in 2020. 

Nonetheless, tier 1 and tier 2 apartments experienced an escalation in sales, particularly during Q3 of 2020. 

This further substantiates the growing demand for better housing.

Overall, the underlying trends observed with the prospected upswing in demand for luxury residential dwellings imply that the current supply of properties does not suffice the imminent demand.

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