Real estate may have to feel the pinch of the ongoing political unrest in Middle East countries, as realtors fear land sales may slide by 10 percent in the coming months.
Moreover, the soaring prices of MS (mild steel) rod and other construction materials also contribute to a drop in sales of apartments and lands, said homebuilders and developers.
Some thousands of Bangladeshi migrant workers came back home from Libya last month due to the unrest, which now spreads to other Middle East countries, stoking a fear of further returns.
Last fiscal year, Bangladesh pulled in remittances worth $10.99 billion, of which $7.22 billion was sent by workers in the Gulf nations including Saudi Arabia, United Arab Emirates (UAE), Kuwait, Bahrain, Oman, Qatar, Libya and Iran.
Around 60 lakh Bangladeshi expatriates live in the Middle East and most of them are skilled and semi skilled construction labourers.
Bangladesh had more than 60,000 nationals working in Libya before the violence erupted in the oil-rich North African nation in February.
The realtors said migrant workers are one of the big clients of their land projects, while the expatriates in the US and European countries mainly buy mid-size and costly apartments.
They also fear the sales volume in the land projects will fall sharply.
"If the number of returnees from the Middle East increases, land saleswill be affected. Because this group of remitters is the main client of lands across the country," said MA Baten Khan, managing director of Building Design and Developments Ltd (BDDL).
"This will also affect the sales of low-cost apartments in Dhaka, as
these remitters want a toehold in the city within their limited earnings," he said.
He, however, said the sales of medium and premium apartments would not be affected due to the political crisis in the Middle East.
Khan also said the soaring prices of construction materials have slowed down the growth of the sector in the recent months.
"When the prices of land and building materials are on the rise, we have few options but to go for developing low-cost products to overcome the situation."
The BDDL chief called upon the government to take initiative to make the market of construction materials stable, so the other relevant industries can survive.
At present, the turnover of the real estate sector stands at around Tk 100,000 crore a year, while the sector contributes 14 percent to gross domestic product (GDP), according to industry leaders.
They said land sales account for a fourth of total annual sales.
Mohammad Farhaduzzaman, marketing manager of Eastern Housing Ltd, also echoed the views of Khan, and said the land sales may drop significantly in Dhaka and its neighboring districts such as Gazipur and Mymensingh.
"I think the sales of land will drop by 10 percent. But this situation will mainly affect the developers who work with small projects," he said.
But some see good signs in the situation. "Some positive things will happen now. We lack skilled construction workers who can handle high tech equipment. Now that problem can be solved if some of these workers join the local industry,” said Tanveerul Haque Probal, managing director of Building for Future Ltd.
"These skilled and semi skilled workers can save our money that we spend to hire construction labourers from abroad.”
sayeda@thedailystar.net