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The country’s real estate sector is enduring a prolonged and severe downturn, with apartment sales plummeting drastically and leaving developers in a tight spot. This stagnation has sent shockwaves through backward linkage industries, bringing the sales of rod, cement, tiles, sand, bricks, and stone to a virtual standstill. Industry insiders point to high-interest bank loans, dollar volatility, persistent inflation, and the unbridled surge in construction costs as the primary drivers pushing the entire housing sector into a battle for survival.
Data from the Real Estate and Housing Association of Bangladesh (REHAB) reveals a stark decline in market activity, with monthly apartment sales crashing from a one-time average of 1,000 units to just 250 to 300 units currently. The luxury housing segment in capital hotspots like Gulshan, Banani, Bashundhara, and Dhanmondi has borne the brunt of the crisis, witnessing a staggering 60 to 70 percent drop in sales. Furthermore, the combination of a 30 percent spike in construction material costs over the last few years and a reduction in the Floor Area Ratio (FAR)—which limits the number of floors allowed—has priced out middle-class buyers and discouraged landowners from signing deals with developers.
The crisis has trickled down to retail hubs across the capital, including Banglamotor, Mirpur, and Badda, where construction material traders report their sales have halved over the past two years. Many business owners are now struggling to pay warehouse rents, labor wages, and bank installments. REHAB Senior Vice President Abdur Razzaq highlighted that the combination of shrinking sales, soaring bank interest rates, and minimal new project launches has crippled investor confidence across the board.
Leaders of interconnected industries have also expressed grave concern. Bangladesh Cement Manufacturers Association President Md. Amirul Haq noted that a major slump has left a massive portion of the industry's production capacity unutilized, urging for policy support and easier loan terms to keep the sector afloat. Similarly, Almas Shimul, Additional Managing Director of GPH Ispat, stated that the stagnation in housing has forced steel manufacturers to slash production due to an alarming drop in rod demand.
With over 169 backward linkage industries dependent on real estate and nearly two crore jobs linked directly or indirectly to the sector, experts warn that a prolonged housing recession will severely impact the national economy. High mortgage costs remain a primary bottleneck; Bangladesh Bank data shows that home loan interest rates, which stood at 9 percent in 2022, peaked at 17 percent in 2024 and currently hover around 14 percent. Mutual Trust Bank Managing Director Syed Mahbubur Rahman emphasized that Bangladesh severely lacks specialized, long-term financing options for housing, suggesting that the government could revitalize the vital economic engine by introducing low-interest, long-term housing loans alongside necessary tax concessions.
https://thedailyexpress.news/news/business/1f151daf-0a85-64c0-aa23-06f601c9fe3a