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REAL ESTATE

Low-cost flats can fix crunch

Says chief operating officer of Shanta Properties

Kawsar Khan
The government should assist developers by providing land at low costs to solve the city's chronic housing problems, says Sheikh Aftab Ahmed, chief operating officer of Shanta Properties.
In a recent interview with The Daily Star, Ahmed says the present prices of flats are expensive for the middle class. The govern ment could also build satellite townships and pair them with urban rapid transportation facilities, to case the pressures on the capital.
"Apartments will not come within the reach of the middle class unless they are within Tk 2,000 per square feet or so. But under the existing market situation, it is not possible to provide apartments at this cost, due to the high cost of land," says Ahmed.
On apartment prices, he says: "If the cost of construction for a particular building is Tk 1,800 per square feet and the landowner takes a 50 percent stake in the project, the cost of the building stands at Tk 3,600 per square feet."
"And then comes the expenditures associated with management, marketing and profit."
If the government assists builders by providing land in a partnership arrangement, it will reduce apartment costs, he says. "Developers of a few projects on government land were able to provide apartments at low prices."
"We have to offer apartments between Tk 20 lakh and Tk 30 lakh, if we target the middle class as customers. But it is not possible for the developers to sell flats in this range," Ahmed adds.
He suggests the government could also think of acquiring land to build towns in the capital's adjoining areas.
Although some developers are eager to undertake massive housing projects, they could not do so as they were not able to acquire big pieces of land.
"The government can take the initiative to acquire land and involve private developers to construct public-private housing projects in Dhaka and nearby areas, such as Narayanganj and Gazipur," he adds.
"No-one ever thought about settling in Uttarajust a decade ago. Look at the population of that area now,” he reasons. People
< may also consider living on the outskirts of Dhaka, such as Kaliakoir, if the area develops and is connected with the capital via fast transportation facilities.
"The government could also think about shifting the capital or making a new Dhaka," Ahmed says. He drew examples from India and Malaysia, where the respective governments extended their capital cities to solve housing problems.
On the present trend in development in Dhaka, Ahmed says: "The city has developed in northern and eastern parts, but no major development is seen in other areas."
"It's time to develop in those underdeveloped areas."
“It is not the government's task to develop or allocate land to the people. Rather, it should instigate joint venture projects to offer low-cost apartments to people,” he says.
Some companies are working exceptionally well while some others are tainting the
image of the sector, Ahmed said of the country's real estate.
Citing worthy examples from developed countries, Ahmed says the segmented nature of the real estate business in those countries allows them to maintain the quality of their projects.
“In developed nations, no company takes on the entire project by itself. There are separate companies for design, construction, supply of construction material, quality maintenance, interior decor, marketing and maintenance. This allows each sector to achieve specialisation and handle everything efficiently," he says.
But in Bangladesh, no company is willing to look after a segment of the task, like marketing or sales alone. "We have to administer all the fields and it is not possible to maintain 100 percent accuracy in all the segments,” he says in an overview of the sector.
Ahmed points to a lack of adequate and
accurate information about the sector, which further depreciates the growth and improvement in quality of the sector.
“If we are to construct a multi-storey building in Motijheel, we will require infor mation or case studies on previous con struction work in the area, which will high light the problems or the advantages the engineers faced in building the structure. But such information is not available. Such information is crucial to the development of the sector," he says.
Ahmed also urges the government to build a central database system that will keep building construction information.
He opposes the tendency of hiding sales information by various companies and says there should be a market survey to record accurate sales and demand of apartments in the city.
“Most companies might agree with me in this regard. Existing records depict an opposite scenario as most companies do not reveal exact sales figures," Ahmed says.
Developers are forced to undertake projects in the dark, as there is an absence of accurate information about market demand and sales. This makes the sector more volatile.
He welcomes the much-debated Real Estate Management Ordinance 2008 saying that there should be a law to regulate the sector.
"But it is not fair that a developer should go behind bars if he is unable to handover projects on time. The government should give the developers a chance to mend their mistakes before arresting them," Ahmed says.
He feels housing is a basic need and the government and other organisations such as the World Bank and the Asian Development Bank should come forward to finance the sector.
"If the WB could finance the CNG autorickshaw project or the rickshaw puller rehabilitation project, why not finance housing projects that is a basic demand of the people," he points out
He terms the present real estate financing inappropriate and urges the government to provide low interest loans for people to reduce housing costs.
kawsar@thedailystar.net