Migration of any sort has a significant impact on the lives of people living in a metropolitan city. Dhaka city is one of the most densely populous cities in the world, with just over 21 million people and a 3.56% growth rate (as in the year 2019). The city is the epicenter of economy, administration and has a widely centralized infrastructure. Due to this, people all around the country tend to migrate to Dhaka. Reverse migration and real estate are interrelated because the sector has a huge impact on how it should function and pertain based on numbers of people, their demands, preferences, and availability.
In quest of better job opportunities, medical facilities, and better residential facilities, we cannot compare Dhaka to any other city in Bangladesh. But in the year of 2020, since the onset of the lockdown, a mass wave of people already left Dhaka. Within the span of five months, a big percentage of people have already left and settled in other places.
The problem status quo of the global pandemic and conflicts in societal infrastructure
Due to the COVID-19 pandemic, every country across the globe is witnessing devastating impacts. Most importantly, primary and tertiary level worker groups are forced to be displaced from urban areas. This is triggering a wide-range of socioeconomic instability. In a country like Bangladesh, the capital city Dhaka is mostly centralized. As a result, most working-class groups were historically forced to migrate here due to economic flourishment or being climate refugees. A major proportion of these people are now the victims of reverse migration.
The lockdown and restriction to control the spread of COVID-19 have mostly affected people surviving on low income and daily wages. The apparels workers are the most vulnerable group at risk of losing their jobs. even though the government has warned factory owners not to terminate the job of workers. Much estimation suggests that RMG sectors are losing orders from foreign buyers and forcing owners to cut off laborers from factories. On a realistic note, no alternative job or stimulus package has been allocated for them. Also, the restaurants, entertainment, recreation places, and social gathering events industries are facing a massive crisis of audiences which ultimately results in mass layoffs.
Urban migration has usually been an important key for policymakers as millions of rural people come to urban places for jobs. As the trend is declining at present, the micro-conflict in society is very evident, and domestic violence is also spiking.
The general impact of reverse migration on the economic threshold of the country
Due to reverse migration, there are more cons than the pros. There might be a significant decrease in the population density of big cities like Dhaka or Chittagong. But the underlying problems of downtrodding the economic infrastructure due to the pandemic are many. The people leaving the city used to earn a subsistence living. Notwithstanding, they had a vested interest in their capacity to spend the bulk of their income in the local economy. Such micro-investments contributed to another layer of the demand curve, which will cease to exist gradually if people continue to leave the city at this rate. Reverse migration and real estate sector, therefore, will have far-reaching consequences without these micro-investments.
In the consumer level analysis, these internally displaced people (IDP) who migrated back to their original residences through voluntary displacement, were a part of an informal economic system. Due to their contribution to the consumption chain, their metrics generated and sustained the volumes for different FMCG industries. The sustainability of the formal sectors through the backward and the forward linkages to them will weaken. This will happen due to the decrease in demand of their products from these migrants. A reverse migration will eventually quash the internal and external remuneration flow due to a lack of employability or sustainable income sources of the returned migrants.
The holistic impact of reverse migration on real estate of Dhaka and Chittagong
Reverse migration and real estate are interdependent units. Because the first thing that one has to cater after a spatial shift is the need for accommodation. But as a large pool of people continues to leave metropolitan areas such as Dhaka and Chattogram, the real estate sector is struggling.
Many house owners are facing troubles not getting timely rents from their tenants or many tenants are leaving those rental houses. The rental market is henceforth at most risk at the moment. Renting, which is the most popular form of housing, is seeing an unprecedented decline. Houses are staying vacant for months, forcing the owners to reduce their rents significantly, even 50% at times. For many owners, house rent is their only source of income. Some are foregoing a few months’ rent just so they don’t lose their tenants which entirely affects their normal way of life. Many people are also looking for cheaper affordable alternatives i.e. areas with cheaper rent.
The people who wanted to buy a new home before the pandemic are not showing interest now. Even after offering multiple favorable home loan schemes, they have postponed their transactions. Many of them are also thinking of shifting to a different location or migrating to a different country. Experts claim that the price of land and apartments has dropped. Presently, they are quite affordable to most of the people living in Dhaka and Chittagong. Many construction projects have set back recently. This is due to the shortage of laborers (for them leaving the city) and temporary halting of different projects. Even after such advantages, people are still not willing to buy or invest in properties. Many of them are passively saving up for investing in other schemes or migration.
The New Government policy
In order to mitigate the crisis, the government has implemented some new policies for real estate in the budget of FY 20-21. Due to the impact of reverse migration and the real estate sector facing backlashes, many real estate companies are offering packages and leniency in their holistic sales schemes. This has recently brought about a dynamic change in the mind of people. But while fighting with the pandemic, sufficient escalation of demand will take time. The impact of reverse migration and real estate sector’s way of fighting back is appreciable. But it needs more regulations and fixes.
The effect of reverse migration and real estate fighting back by changing business schemes brings hope. The sector will definitely shine in the future amid the crisis. The continuation of the development of this sector will ease people’s accommodation problems in the coming days.