TERM PAPER ON FACTORS AFFECT THE DEVELOPMENT OF REAL ESTATE IN BANGLADESH
This report contains an overall analysis of the real estate sector of Bangladesh including history, market intensity & profitability, regulatory environment, sources of real estate financing etc. It also encompasses a wide range of factors that affect the real estate market of Bangladesh like supply factors and demand factors. It also explains the relationship between factors assigned like price of housing and rental vacancy rate, inflation rate and exchange rate as dependent and independent variables respectively.
Bangladesh, like many other developing countries, faces an acute shortage of affordable housing both in the urban and rural areas. Moreover, housing affordability is being eroded by poor land administration policies, which have resulted in very high land prices that make urban housing prohibitive for lower-income groups. Also, there is no active secondary market for real estate, mainly because of the high transfer taxes and an uninterrupted long-term increase in land prices. In spite of all these, this sector has experienced considerable growth in past few decades. With a rising population and increasing housing demand, apartment culture has grown up in Dhaka sharply. In line with this, house rent in Dhaka increased by 250 percent between 1990 and 2007.
During the last decade, the total volume of Real Estate, Renting and Business service sector increased every year which implies a positive growth in the sector every year. But, compared to overall GDP growth, this sector expanded at a slower rate. That is why in overall GDP the contribution of this sector has a downward trend. The overall GDP contribution of the sector was 7.02% in 2009-2010.