Ctg realtors glum over unsold flats

The real estate business in Chittagong is passing through a tough time as about 4,000 ready apartments remain unsold.

The downturn has hit most of the 350 realtors operating in Chittagong. Of the firms, only 98 are members of the Real Estate and Housing Association of Bangladesh.

Around 250 companies started operations in the port city in the last few years and around 20 percent of them had to shut their offices due to a lack of bank loans, said SM Abu Sufian, chairman for the Chittagong zone of the trade body.

“Many companies cannot start fresh projects,” he said.

A developer at Nasirabad said they are yet to complete selling all the apartments they built two years ago.

“If the apartments remain unsold for years, it will be difficult for us to make profit,” he said, asking not to be named.

Realtors do not get any incentive while importing machinery and raw materials, as the government has not yet recognised the sector as an industry, Sufian said.

“Had we got tax benefits, the cost of construction would have come down,” he said.

For example, he said, “We have to pay 37 percent tax to import mixer machines. Had the government recognised the sector as an industry, the tax would have been only 3 percent.”

“We also have to import lifts, generators and other machinery and materials by paying high taxes,” he added.

The realtors also urged the government to reduce the interest rate on bank loans to a single digit, which is now 17 percent to 19 percent. People are not interested in buying new apartments, as the government does not give gas connections to the new buildings, industry insiders said.

Apartment prices rose four times in the last six years, due to the spiralling prices of land and construction materials, they added. Many realtors said they are constructing apartments targeting the middle-income people, but they are not getting a positive response, as the clients are not getting loans from banks.

Banks earlier used to give loans of up to 70 percent of the price of an apartment, but now they do not give more than 30 percent, said Kazi Aynul Haque, managing director of Equity Property Management. “Land owners are also demanding a huge amount of signing money now, which also raises the prices of apartments,” Haque said.