Housing sector

Housing sector needs investment and political support: experts

“The development of the housing sector will in turn contribute to the country’s GDP”

TBS report

December 13, 2021, 9:50 p.m.

Last modification: December 13, 2021, 9:51 PM

A top shot of the city of Dhaka. The photo was taken in the Gulshan area in the capital. Photo: TBS

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A top shot of the city of Dhaka. The photo was taken in the Gulshan area in the capital. Photo: TBS

Despite huge potential, the housing sector is not growing due to lack of adequate funding and timely government policies, experts have observed.

The government should prioritize this sector and make housing affordable for middle and low income groups through policy development and adequate funding, they said during a virtual roundtable hosted by the Policy Research Institute of Bangladesh (PRI).

Development of the sector will in turn contribute to the country’s GDP, industry leaders said at the event, “Financing Affordable Housing – Part 1″ – IFC Housing Roundtable Series: Rebuilding economy post-COVID through housing finance and construction.”

Thierno Habib Hann, Global Housing Finance and Capital Markets – Asia Pacific Lead of the International Finance Corporation, delivered the keynote address at the event, where Ahmed Jamal, Deputy Governor of Bangladesh Bank was the chief guest.

PRI Executive Director Dr Ahsan H Mansur said: “Government allocation and investment in this sector is very low. Most countries, including neighboring India, consider housing as the 3rd sector, which is 14th in Bangladesh.

He also said: “About 30% of the total population lives in urban areas. But housing for even 50% of these people has not been secured. Government wage policy in this regard is very poor and banks don’t provide enough loans for this sector.”

The government, especially the Bangladesh Bank, should decide to increase investment in this sector.

Nasimul Baten, CEO of Delta BRAC Housing Finance Corporation Ltd, said, “The price of land in Bangladesh is way too high. Although banks and non-banking financial institutions provide loans in this sector, it is very difficult to recover these loans. and the registration of apartments is too high and therefore the housing sector is a challenge.”

Syed Javed Noor, DMD IDLC Finance Ltd, said: “Investment by financial institutions in this sector is gradually increasing. With certain government initiatives, it will be possible to move this sector forward.

Asif Iqbal, CEO of Building Technology & Ideas Ltd, said: “After agriculture and the garment sector, the housing sector is considered one of the main job-creating sectors. The contribution of this sector to the GDP is 12 to 15%. “

According to a projection by the Bangladesh Bank, the demand for finance in the housing sector in the financial year 2019-2020 was one and a half lakh crore. In the financial year 2020-21, this demand further increased by Tk 5,000 crore.

This sector can be further developed if the government pays attention to real estate businessmen.

The keynote said that the 11 goals set out in the United Nations Sustainable Development Goals include the provision of adequate, safe and affordable housing for all by 2030, with a focus on developing the management of base and slum upgrading. The goals also call for an inclusive, safe, livable and sustainable productive infrastructure.

Providing quality housing to all citizens is one of the constitutional responsibilities of the state for the material development and cultural growth of the masses through planned economic development, he added.

Dr. Ahsan H Mansur moderated the event in the presence of Mohammad Rezaul Karim, Executive Director, Securities and Exchange Commission; Mofiz Uddin Ahmed, Additional Secretary, Financial Institutions Division, Ministry of Finance; Selim RF Hussain, Managing Director and CEO of BRAC Bank Limited; Ehsanul Azim, Chief Investment Officer, Financial Institutions Group, International Finance Corporation.