The Evolving Landscape of Chattogram’s Real Estate Market
Chattogram, Bangladesh’s bustling port city, has long been a focal point for economic activity, thanks to its status as the country’s premier seaport. Over the years, the real estate industry in Chattogram has witnessed steady growth, driven by the influx of industrial activities and a burgeoning middle class. However, this growth has not come without its challenges, which continue to shape the market dynamics today.
Historical Context and Current Landscape
The real estate sector in Chattogram began its journey in 1988, as highlighted by market research from Navana Real Estate. Today, the Chattogram chapter of the Real Estate and Housing Association of Bangladesh (REHAB) comprises over 83 members, although only 15 to 20 of these companies remain actively engaged in the market. The disparity in activity levels can be attributed to several factors, including inflated unit prices driven by high registration fees, raw material costs, and other input expenses.
Despite these challenges, the demand for housing in Chattogram remains robust. With approximately 150 projects being constructed annually, the combined market value of these developments reaches up to Tk 3,000 crores. Abdullah Al Harun Chy Mehedi, Senior Assistant General Manager and Head of Department (Sales) at Navana Real Estate, notes that the demand for flats is increasing yearly, particularly among middle-income buyers. The most sought-after units range from 1,200 to 1,800 square feet, with prices between Tk 75 lakh and Tk 1.2 crores.
Growth Amidst Challenges
The real estate market in Chattogram has shown resilience, with apartment sales increasing by about 25 percent annually. Mehedi projects that total investment in the sector could reach Tk 15,000 crores within the next decade, provided that ongoing government development projects in the greater Chattogram region are completed. However, the industry faced a significant setback during the Covid-19 pandemic, with a collapse of around 60 percent. Although the market rebounded in 2022, it is currently grappling with the repercussions of an economic slowdown, characterized by a shortage of US dollars and rising inflation that has further escalated raw material prices.
The Role of Government Policies
One of the critical factors affecting the real estate market is the high registration fee of 13 percent in Bangladesh, which significantly deters potential buyers. In comparison, developed countries typically charge between 4 and 7 percent. Mehedi emphasizes that without public-private partnerships, the cost of flats will continue to rise, discouraging buyers. Furthermore, the increasing prices of building materials and land acquisition costs are pushing apartment prices higher, complicating the affordability issue for many prospective homeowners.
Industry experts argue that easing government regulations could stimulate the market. Abdul Kauiam Chowdhury, a former Vice-President of REHAB, suggests that allowing the use of undisclosed income for property purchases could retain capital within the country, rather than allowing it to flow abroad. Additionally, simplifying the land and property registration process could significantly boost sector activity.
Future Prospects and Development Initiatives
Chattogram is not just a hub for real estate; it is also witnessing significant development initiatives that promise to reshape its economic landscape. The establishment of the country’s largest economic zone in Mirsarai, along with another zone in Anwara funded by Chinese investments, is expected to create numerous employment opportunities. The completion of major infrastructure projects, such as the Bay Terminal and Karnaphuli Tunnel, will further enhance connectivity and economic prospects, transforming Chattogram into a vibrant urban center.
As employment opportunities grow, so does the demand for housing. However, industry insiders caution that the current supply of apartments is insufficient to meet this demand. While the market is booming, only a handful of large real estate companies are actively engaged in development, leading to a potential shortfall in housing availability.
Shifting Consumer Preferences
Interestingly, consumer preferences in Chattogram are evolving. There is a noticeable shift towards the premium segment of the market, with buyers increasingly seeking sophisticated living spaces that offer modern amenities. Developers are responding by incorporating environmentally friendly materials and upscale facilities, such as indoor recreation centers, swimming pools, and rooftop gardens. This trend mirrors the growing demand for quality housing seen in Dhaka, indicating a broader shift in consumer expectations.
Conclusion
The real estate market in Chattogram is at a crossroads, characterized by both significant opportunities and formidable challenges. As the region continues to develop and attract investment, the demand for housing is set to rise. However, addressing the issues of high registration fees, rising construction costs, and the need for government support will be crucial for the sector’s sustainable growth. With the right policies and a focus on quality development, Chattogram’s real estate industry could thrive, providing much-needed housing for its growing population while contributing to the region’s economic prosperity.