Though the year of 2020 started with a lot of optimism, all those changed with the onset of Coronavirus pandemic. Things turned grim due to the spread of the deadly virus into every aspect of lives. It has also had a massive negative impact on the global economy, with many sectors being affected. The real estate industry was no exception.
There was an expectation that 2020 would see a leap forward for the real estate industry in Bangladesh. Real Estate and Housing Association of Bangladesh (REHAB) Chattogram Fair 2020 was the first big event in the past year in February, amidst huge fanfare.
The consumers in Bangladesh also showed greater interest in the market, as the government set a 9.0 per cent fixed rate for housing loans in the banks. Diverse selections of properties were also available in the market, for both rent and sale. And then the pandemic hit. Panic gripped the sector. Buyers held off on their long-awaited dreams, and sellers began pulling properties from the market, expecting lower prices. Property searching became slow down as people became extra cautious about their health safety. The lockdown came into place, and everything almost stalled.
Real estate development also slowed, with the construction of projects suspend for the time being. Bangladesh's steel industry is an example of how bad things got as it faced losses of over Tk 3.50 billion during the first two weeks of lockdown. Imports also became a matter of the past.
The economy suffered, and so did the people. Many lost their jobs, and the real estate industry felt the effects. A study by BRAC showed that in May, nearly 30.0 per cent of people lost their jobs. Tenants leave the rental apartments and returned to their villages as they were no more capable of bearing the costs of living in Dhaka. Many vacant apartments are yet to get tenants.
Those who were fortunate enough to stay in jobs started working from home. Many offices realised that keeping their office spaces would be a waste of funds. Thus the number of vacant and unused properties increased in the market.
Although things were not right in the real estate market, demand was there. People were still moving homes and buying properties, even during a pandemic. And businesses that were more digitally oriented were better placed to serve these needs.
A good example is Bproperty, Bangladesh's only complete property solutions provider. Bproperty's strong footprint in the digital realm allowed them to encourage and provide for those still interested in real estate. Despite the challenges brought about by the pandemic in 2020, Bproperty saw a drastic upward trend in demand soon after the lockdown was lifted, especially in September. Compared to the pre-Covid period, rental queries increased by 50.0 per cent after the end of lockdown.
With most people staying at home, they shifted more towards the digital domain. And Bproperty benefited greatly from this. Its website (www.bproperty.com) allowed customers to view properties from their homes. Diligent customer service also ensured that Bproperty and its services were always accessible, with the company receiving thousands of calls from customers, even amidst the pandemic.
Bproperty also organised the country's largest virtual property fair, the Bproperty Online Property Fair, in October. The fair received more than 50,000 unique visitors and featured over 10,000 properties for sale.
The government was also looking at steps to help economic recovery. As a part of the efforts, the national budget allowed 're-investing' undisclosed funds into real estate and financial markets. Taking advantage of the measure, many new investors entered the market, which led to unexpected growth in a pandemic year. Some Tk 60.0 billion was invested by the end of December 2020, and most of the investment went into the property sector. The government also earned nearly Tk 8.80 billion as taxes.
The Detailed Area Plan (DAP) was another significant aspect of the year. In the last year, the government also halved the Land Transfer Tax, cutting it to 1.0 per cent from 2.0 per cent on deed value. Stamp Duty fee was also reduced to 1.50 per cent from 3.0 per cent.
All these measures have helped in bringing some positive change to the real estate market. Many developers and investors have welcomed these changes.
Though Covid-19 is still rampant in many parts of the world, including Bangladesh, 2021 begins with a positive note and optimism. The economy is seeing an upswing. Real estate market is also expecting a boost in the near future.