The country's real estate business has started bouncing back like other sectors as instalment collection on previous sales is steadily picking up, thanks to the government's policy and financial support.
Sources said both the sales and the instalment collection witnessed a rise over the last three months after the economic activities returned to track following the government's announcement of stimulus packages for revival of the business hit hard by Covid-19.
A section of Covid-19 affected realtors have got low-interest loan from the government's Tk 35,000 crore stimulus package to complete their on-going projects. The government's permission for using untaxed income to purchase land or apartments and the bank loan on single-digit interest rate and reduction of flat registration tax have helped the sector significantly to overcome the impact of Covid-19 pandemic, said realtors.
"There was a fear that the realtors would face hard time in surviving the pandemic following a drop in demand for housing due to downturn in economic activities amid Covid-19 pandemic. But we have been able to a large extent to face the situation effectively," said Alamgir Shamsul Alamin, president of the Real Estate and Housing Association of Bangladesh (REHAB).
The situation has been improving alongside the increase of economic activities, he added.
Owing to the prolonged nationwide lockdown that began on March 26, 2020 about 6,500 projects belonging to various REHAB members faced uncertainty as construction work was halted for about two-and-a-half months, he also said.
"It was a very difficult time for the realtors . . . we had tried to tackle the crisis and REHAB members faced the situation with patience," said Shamsul Alamin, also Managing Director of leading real estate business house 'Shamsul Alamin Real Estate Limited.
The sector saw light in July, 2020, when the government moved to slash registration fees and interest rates on loans, he said, adding that since then, the realtors have been struggling to survive the pandemic rather than to make a profit.
He said soon after the nationwide general holiday aimed at curbing the spread of Covid-19 came to an end on May 30, realtors resumed construction work on their projects in line with healthy and safety guidelines to prevent further outbreaks.
At that time, developers had been compelled to recruit a smaller number of workers to maintain adequate social distancing at projects and this, in turn, was causing delays in the handover process, he said, adding that it was not only created problem for the clients, but it also pushed up the production costs for the developers.
The REHAB president urged the government to continue its policy to allow the use of undisclosed money in the real estate sector in the next budget for the fiscal year 2021-22. He also requested the government to give REHAB members priority in getting low-interest loans from the stimulus package.
"Country's real estate sector is seeing a ray of hope in its struggle against Covid-19 fallout following changes in certain state-policies," said REHAB vice-president Kamal Mahmud.
He said that the government's decision to ease the rules on investing untaxed money in real estate slightly benefited the sector over the past two months while the reduced registration fees are helping sales to recover gradually.
"REHAB members are also getting support from the government's stimulus package and I am hopeful that the sector will return to normalcy completely when the Covid-19 crisis comes to an end," said Mahmud, Managing Director of Skiros Builders Ltd.
According to REHAB, slashing of interest rates on bank loans and land registration fees has helped the sector tremendously in coping with the Covid-19 pandemic fallout. As a result, approximately Tk 5,000 crore has so far been invested in the sector in the current fiscal year 2020-21.
Around 3,520 people have bought flats with at least Tk 3,200 crore of undisclosed money, taking the government's offer for investing black money in the sector.
According to the National Board of Revenue (NBR), a total of 7,650 taxpayers have shown their undisclosed assets in their returns for the tax year 2020-2021 and thus deposited Taka 962.60 crore to the state exchequer as tax.
The NBR had kept the provision for revealing undisclosed amount of money and assets in the national budget for the current fiscal year through giving tax in a bid to keep the economic activities dynamic in the private sector, boost the flow of investment and develop the capital market despite the COVID-19 pandemic.
According to REHAB, there are over 6,000 ongoing projects. Over 35 lakh people are directly and indirectly involved in the sector and around 10,000 to 12, 000 apartments are being handed over every year.