Infrastructure is considered as one of the key indicators of the development of any economy. However, this term is too broad as several things fall under this category like roads, bridges, transportation solution etc. Real estate or housing is one of the industries that fall under the same label as well. Over the years, this sector has shown promising growth with the expected ups and downs over the time. This is usually expected from any industry. However, the real estate industry has been having a good impact on the Bangladesh economy and is managing to hold a decent sectorial GDP growth of around 4% since FY 2013 (Bangladesh Bureau of Statistics).
Few factors drive the growth of this sector such as the price of the properties, interest rates, the demand for the properties, changes in demographics, urbanization etc. Again, this industry drives the growth of several others like cement, steel, tiles, sanitary ware, glass and other building materials. Growth in this sector creates a ripple effect on the others as demands of such products increase automatically. Moreover, once they do, it not only just contribute to consumption rather increase employment, disposable income, purchase capacity and ultimately contribute in our GDP per capita.
Contribution of Real Estate in Bangladesh Economy
Over the last 40 years, real estate sector played a significant role in shaping the Bangladesh economy. During this time we saw robust urbanization and growth of our population. As a consequence, our country had to provide additional housing solution to them. According to REHAB, in 2014, this sector contributed 12% of the GDP compared to the previous year of 7.04%. Additionally, REHAB data also shows that in 2016, the number of unsold flats came down to around 27,100 from 35,000. This indicates in that period, people had more demand and increase in purchase capacity. This ultimately led to more purchasing of flats. As people reinvest the money taken from the market, it boosts the economy and increases the contribution of this sector in the GDP of our country.
Future of Real Estate in Bangladesh
According to UN, 40% of the people in our country will be urbanized by 2020. More urbanization means more demand for shelter. This ultimately leads to more demand for real estates in that given amount of time. Moreover, there are changes in demography as well since this influx of population shows a tendency to form nuclear families rather than conventional joint families. Hence, this might create a multiplier effect on the factor mentioned above.
This was just one of the aspects of the growth of this industry and the Bangladesh economy. If we look at it from a bird’s eye view, we can see that this industry is still taking shape and there is fast-growing middle class. This large chunk of the population look for affordable solutions to everything, thanks to increasing GDP per capita. Such economic conditions are termed as ‘emerging markets’ where industries are yet to take proper shape.
Emerging markets are a lucrative choice for investors because, despite the risk, growths are high in these sectors. Bangladesh is no different as we have FDIC flowing towards our country in recent years. One notable mention is the China deal with our government where they heavily invested in our country, mainly for infrastructure development. If this continues, we can expect a promising future of this industry and concurrently, the Bangladesh economy.
Investment Decision in Real Estate
Prominent investors look for sectors that have a constant flow of return at a moderate risk rather than a high return at high risk and little or no chance of continuation. Real estate market in our country is a good example of such investment that attracts investors from home and abroad. There are again few factors behind such investment decisions where investment timing is the most crucial.
Know more whether it is the right time for investment or not. Once you decide to invest, Broperty can make sure that your investment in real estate is placed safely. Browse through hundreds of properties nationwide to pick yours and let us take care of the rest while you relax. Because here at Bproperty, your investment is always safe with us.