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At the end of every Fiscal Year (FY), when a budget is proposed, a lot of things change. It sheds light on the economic aspects of a country. In other words, it sets the mood of a country’s economic growth with a target to meet before the next fiscal year. Plenty of development initiatives are taken to meet the necessary demands and new rules & regulations are introduced along with it. These changes, in turn, affect the economy by affecting different industries differently. In that regard, the FY of 19-20 was great for real estate with a lot of changes taking place. Many excellent initiatives were taken to make things easier for consumers and developers such as reduction of home loan interest rates, property taxes, and so on. Here are the real estate changes in FY 19-20.

Home loans and Interest rate

Home-Loan lego
A lower home loan interest may have a considerable amount of impact on real estate

Two of the biggest real estate changes in FY 19-20 was the imposition of the single-digit interest rate and the new home loan ceiling. In the first quarter of  2020, the central bank issued a formal notice instructing all the banks to fix a maximum of 9.0% interest rate on all loans except for credit cards, effective from 1st of April, 2020. As a result of this change, people are now expected to invest even more in the real estate sector than ever before. 

On the other hand, the ceiling for a home loan has been raised to Tk 20 million from Tk 12 million, considering the increased apartment prices and purchasing capacity of people. There is good news for government employees as well. Previously, the government set the home loan interest rate for its employees at 10% with 5% to be paid by the government and rest by the borrowers. But during this fiscal year, it was announced that borrowers can enjoy a 4% interest rate instead of 5%.

And for lower and middle-income people, Bangladesh House Building Finance Corporation (BHBFC) has introduced a “Zero Equity” housing loan. Meaning, there will be no down payment required to avail this loan. People living outside the Dhaka, Chattogram, and Sylhet metropolitan area will be eligible for the loan. Under the Pollima Housing Loan package, people can enjoy a low-interest rate of 8% and under the Farmer Housing Loan package, the interest rate will be only 7%. The ceiling of the loan is set to Tk 1.65 million which could be repaid in installment for up to 20 years.

Stamp duty

There are various types of fees associated with purchasing a property. For most people, these are considered as extra burdens. So the government decided to slash the stamp duty on property registration to reduce the overall registration cost of land and flats in the country. Before this, one had to pay 3% of the total transfer value as a stamp duty fee but now the stamp duty fee comes down to only 1.5%. And this can easily be considered as one of the biggest real estate changes in FY 19-20.

Going eco-friendly

Natural eco friendly bricks stashed together
Shifting to Eco-friendly bricks can help you contribute to reducing carbon footprints at a larger scale

Pollution in our country is nothing new. But when it comes to emitting harmful chemicals in the air, brick factories are the undisputed champion in that regard. And there seems to be no end to this problem, especially in the urban areas. So as a preventive measure against pollution, the government has taken the initiative to go green by using environmentally friendly bricks in all their government projects. This kind of brick is made of sand, fly ash and other materials that are less harmful to the environment. The goal was to reach 10% usage of eco-friendly bricks in this fiscal year with a target to reach 20% usage in the next making his initiative amongst the major real estate changes in FY 19-20.

Country-wise lockdown effect

Like every other sector, the real estate sector also experienced a huge challenge as the government enacted a country-wise lockdown strategy to help prevent the coronavirus situation. In effect, people became reluctant about a lot of things including engaging in economic activities such as property dealing. The situation has not deteriorated that much, but the property owners are becoming less inclined to physically view properties now. Overall, while the market has surely slowed down considerably, property transaction, and property demand, in particular, is still ongoing.


people walking in a suit around Bproperty panel
Interested people came pouring to the fair

The fiscal year of 19-20 had been a great year for Bproperty as well. The company had been able to expand its operations in different cities and areas. In November 2019, Bproperty officially inaugurated its office in Chattogram to make property-related services more convenient and easy. Bproperty also opened three more marketplaces around the capital including Rampura, Mohammadpur, and Uttara in the last fiscal year, the last of which is the first rental marketplace in the country.

On the other hand, property fairs in various locations were a massive success. Interested people came pouring to the fair and grabbed their dream property from our vast collection.

These are the biggest real estate changes in FY 19-20. And all things considered, the FY 19-20 had been great for the real estate sector in Bangladesh. With favorable changes like these, the real estate sector was expected to have a boost initiating an economic boom along with it.

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