Country's housing industry has started showing dynamism overcoming the unstable situation that prevailed for a long time because of a number of positive moves undertaken by the government in the recent times. Considering the significance for its contributions to the national economy, experts opine that this promising sector needs priority and should be included in the preferable programme of the government.
Besides, the authority concerned should take steps to remove all barriers that hinders the growth of the industry in order to ensure its expected flourishment.
Sector insiders expect that finance minister will announce some specific measures in the upcoming budget that will boost the realtor business as well as play due role to boost economy.
"In the budget, there must have a provision so that question is not raised regarding source of income for purchasing plots or flats. Otherwise, it will not be possible to check siphoning off money for building second home abroad", said housing trader. Data suggests that the housing sector is directly contributing 7.8 percent to the GDP and in addition to the support of the link industries, the contribution will stand more than 12 percent. The sector has created employment opportunity for 35 lakh of people while 2 crore are depended on this sector. So, this sector needs to be focused preferentially in the upcoming national budget.
As per the data of the Real Estate and Housing Association of Bangladesh (REHAB), realtors have handed over more than 2 lakh flats and 1 lakh plots to their clients in the last 3 decades. REHAB leaders allege that although the government itself encourages investment in this sector but the role of relevant departments and agencies is questionable.
They demanded to reinstate the section 19-B of the Income Tax Act to discourage siphoning off money abroad. UNFP data suggests that 9 percent of total population stayed in urban areas in 1974 but in 2011 the urban population stands at 28 percent, the highest among South Asian countries. Housing sector was passing through some crises in the last few years because of some policy related barriers, but gradually the barriers are being removed through some government decisions.
The decision of providing housing loan to the government sector officials at 5 percent interest has contributed remarkably to come out of the crisis but still the high cost of registration, high interest of bank loan, lack of term loan facility etc pose big barrier to flourish the sector. REHAB leaders demanded clear indication in the budget to bring down registration cost in the housing sector to single digit.
They observed that constructing more than 10-storied building in Dhaka needs approval from a total of 11 bodies including Fire Service, Rajuk, DMP, Environment Department, DESCO, Transport Coordination Authority, WASA, Civil Aviation etc., which is a big challenge for the industry. REHAB President Alamgir Shamsul Al-Amin wholeheartedly expected that the government needs to pay due heed to the highly potential housing sector of the country, considering the contribution of this sector to the economic growth.
"I expect some good news in the next national budget. It is very important to have opportunities to allocate housing loans at a simple rate of interest. At the same time, reducing registration cost for flats and plots is vital because this will help increase revenue for the government", Al-Amin added. He said they have submitted a 12-point proposal to the National Board of Revenue (NBR) for the upcoming budget for boosting the housing business. The proposals include introduction of long term re-financing scheme at single digit interest rate, forming of a Tk 20,000 crore revolving fund, reducing income tax for the housing sector.
REHAB also recommended for providing a fund to the Bangladesh House Building Finance Corporation (BHBFC) so that lower and middle income people can take loan for 30 years term at 6-7 percent interest to buy flats. "We have also demanded the government not to impose new VAT on housing sector. Besides, reducing income tax for housing developers and exempting them from paying suppliers VAT and tax at source for 5 years was also demanded,” he added.
Liaqat Ali Bhuiyan, Vice President of REHAB told that the housing sector is passing through crisis for more than 2 years as most of the investors who took bank loans at high rate are failing to repay.
So it is needed to re-fix the registration cost at Tk 500 per square kilometer for residential flats at Gulshan, Baridhara, Banani, Matijheel and Tk. 450 at Dhanmondi, Lalmatia, Uttara, Kawranbazar, Khulshi, Panchlaish, Agrabad, Nasirabad in Chittagong. Liaqat Ali said an earlier formed NBR-REHAB joint committee recently demanded the NBR chairman to implement the recommendations made by the committee.
Admitting that registration rate at 14 to 16 percent is so high, NBR chairman Mosharraf Hossain Bhuiyan assured the REHAB leaders of reducing the cost immediately. "We will immediately send letter to Law Ministry and Local Government Ministry in this regard", he added.
