60pc decline in sales of flats, plots in 6 months
Collection of information about clients by the tax intelligence agency and identification of the sector as a possible area for plugging in holes to prevent money laundering by the ministry of finance (MoF) have resulted in decline of sales of both flats and plots of land during the last six months by at least 60 per cent, sources said.
The Central Intelligence Cell (CIC) under the National Board of Revenue (NBR) launched a drive to collect clients' particulars from different leading real estate companies during the last couple of months.
The realtors likened the drive to intimidating the potential clients and forcing them to stay away from making any fresh purchase or buying.
Anisuzzaman Bhuiyan Rana, General Secretary of the Real Estate and Housing Association of Bangladesh (REHAB) expressed the resentment of the members of his organisation over the move.
The CIC sent a format to different leading companies like Sheltech, Concord, Assurance, BTI, Navana and Advance Assurance Development, asking them to provide information about the actual sales price of a flat or a plot of land and its 'stated' cost in the deed of registration during last five years.
Last week, REHAB, however, wrote a letter to the NBR chairman where they said they would not be able to provide such information to the CIC.
Besides, another drive by the central bank also caused a panic among both the buyers and businessmen as the MoF listed the real estate sector as a target group under suspicious money laundering deals.
The realtors have strongly protested the move and requested the ministry not to list the sector as a target group.
"We have met the finance minister and the commerce minister on that issue and requested them to de-list the real estate sector from any such target group," Mr Rana said.
A government committee will submit a report in this connection by April 30. The realtors are now expecting that the sector would be de-listed, on the basis of the recommendations of the committee.
The average sales of both flats and land plots have dropped by 60 per cent in 2012 from the level of the previous year due to lack of gas and electricity connections, non-availability of bank credits and rise in the prices of land and other construction materials, Mukarram Hussain, Vice President of REHAB said.
He expressed the fear that if the current slow growth "continues this year, the sales of flats will come down." The realtors have otherwise set the sales' target at over 18,000 flats in 2013, he added.
He said banks are reluctant to provide loans to the sector, stating that without credit facilities by banks, individuals will not be able to buy any flat or a piece of plot with their own means.
The REHAB leaders said they are still facing major troubles mainly because of price-hike of construction materials.
REHAB Vice President Sayed Nazrul Biddut said the increased prices of land in the city, high rates of taxes and registration fees, lack of power and gas connections, share market debacle, liquidity problems of banks and financial institutions etc., have created a stagnant situation in the sector.
He said the sales of apartments have decreased by around 60 per cent during the last one year and if the government does not come forward to save the real estate sector from a dire straits, it will face a severe crisis in the near future.
The real estate and housing sector is one of the main drivers of economic development and industrialisation in the country, the sources observed.
This sector has been contributing about 12-15 per cent to the country's gross domestic product (GDP), industry people said.
Leo Dewri, Manager (Research and Development), REHAB said the sector has not only generated 2.5 million employment opportunities directly and indirectly but also created several dozens of ancillary industries, namely those of steel, cement, tiles and sanitaryware, cable and electric ware, paint, glass and aluminum, brick and other building materials.
"The industry is facing major challenges in the absence of proper urban planning and land administration. It does not enjoy the status of an industry yet in real terms. Furthermore, inadequate funding support, shortage of skilled and qualified manpower, non-availability of utility connections, phenomenal hikes in prices of land and rising manpower and material costs have impacted it adversely", Mr Dewri added.
