Are you considering buying a flat wants to know flat price in Dhaka? If so, you’ve come to the right place! This blog is designed to provide you with all the current information you need about flat prices in Dhaka city. Dhaka’s real estate market has experienced significant changes over the years, making it essential for potential buyers and investors to stay informed. Whether you’re looking for a new home or a smart investment opportunity, understanding the trends and factors affecting flat prices in Dhaka will help you make a well-informed decision. Read on to discover the latest insights into the dynamic real estate market of this bustling capital city.
Table of Contents
The Rising Demand for Flats in Dhaka
The demand for flats in Dhaka is higher than ever before. Many people want to buy property in this busy city, causing a big increase in the real estate market. Here are some key points explaining this surge:
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Significant Sales: Data from the Directorate of Registration shows that flats worth Tk 24,000 crore were sold until the fiscal year 2023-2024. If the current monthly sales average continues, total sales by the end of this fiscal year are likely to exceed Tk 30,000 crore.
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Population Growth and Urbanization: More people are moving to Dhaka in search of better opportunities and a higher standard of living. This rapid urbanization increases the demand for residential properties.
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Financial Investments: Substantial remittance inflows and investments of black money are sustaining the high demand for flats. This financial maneuvering highlights not only the need for housing but also the corruption that distorts the market.
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Real Estate Sector Growth: According to the Bangladesh Bureau of Statistics (BBS), the real estate sector is projected to grow by 3.79% in the outgoing fiscal year—the highest growth rate in four years. This growth stands out, especially since many other sectors, like manufacturing and retail, have seen significant drops.
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Actual Transaction Values: The real transaction values in the real estate market are estimated to be three to four times higher than the figures recorded by the Directorate. About 90% of investments in the sector are directed towards the construction and purchase of residential houses or apartments, as noted by the Real Estate and Housing Association of Bangladesh (REHAB).
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Rising Interest in Gated Communities: Since 2012, there has been a growing interest in gated communities and high-rise apartment complexes offering security and a sense of community.
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Government Initiatives: Government plans, such as “Vision 2021” and “Vision 2041,” have prioritized the development of the real estate sector. According to Mr. Naimul Hassan, a former executive committee member of REHAB, these initiatives have significantly boosted the market in Dhaka.
In summary, the rising demand for flats in Dhaka is driven by population growth, urbanization, financial investments, and supportive government initiatives. This demand shows no signs of slowing down, making Dhaka one of the most dynamic real estate markets in the region.
Current Flat Prices in Dhaka
The current average price of flats in Dhaka is around $143.31 per square foot, which translates to approximately Tk 15,000 (assuming an exchange rate of Tk 105 per dollar). This means that a 1,200 square foot flat would cost about Tk 1.8 crore. While the average price per square foot is Tk 15,000, it is still possible to find medium-quality flats in certain areas of Dhaka for Tk 70 to 80 lakh.
- Average Price: $143.31 per square foot or approximately Tk 15,000.
- 1,200 Square Foot Flat: Approximately Tk 1.8 crore.
Flat Rates in Key Areas of Dhaka
Gulshan: Gulshan is a highly prestigious area in Dhaka, known for its important offices, embassies, and luxury residential zones. The cost of apartments here is typically out of reach for the middle class.
- Average Price per Square Foot: $166 or Tk 17,430.
- Gulshan 2: Tk 18,000 to 20,000 per square foot.
- North Gulshan: Tk 20,000 to 25,000 per square foot.
Baridhara: Baridhara is another affluent and elite residential area in Dhaka, particularly known as a diplomatic zone with various embassies and international offices.
- Average Price per Square Foot: $160.74 or Tk 16,878.
Banani: Banani is a commercial and residential area in Dhaka, famous for its offices, restaurants, schools, hospitals, and shopping malls. Despite being popular among the affluent and middle class, the housing prices here are quite challenging.
- Average Price per Square Foot: $121.36 or Tk 12,743.
Uttara:
- Average Price per Square Foot: $115.19 or Tk 12,095.
Bashundhara:
- Average Price per Square Foot: $97.16 or Tk 10,202.
Mohammadpur:
- Average Price per Square Foot: $84.26 or Tk 8,847.
Motijheel:
- Average Price per Square Foot: $76.25 or Tk 8,000.
Badda:
- Average Price per Square Foot: $75.69 or Tk 7,948.
Banasree:
- Average Price per Square Foot: $72.26 or Tk 7,580.
Shantinagar:
- Average Price per Square Foot: $70.56 or Tk 7,409.
Mirpur:
- Average Price per Square Foot: $69.17 or Tk 7,200.
Mohakhali:
- Average Price per Square Foot: $64.69 or Tk 6,800.
Agargaon:
- Average Price per Square Foot: $61.11 or Tk 6,400.
Affordable Areas
There are still a few areas in Dhaka where flats are comparatively cheaper, such as Dakshinkhan, Rampura, and Gandaria.
- Dakshinkhan: Last year, the average price per square foot for flats was $65 or Tk 6,825, which is much lower than the average price in Dhaka.
- Rampura: $57 or Tk 5,985 per square foot.
- Gandaria: $59 or Tk 6,019 per square foot.
This comprehensive overview of current flat prices in Dhaka will help potential buyers and investors make informed decisions based on their budget and preferred location.
Factors Influencing Flat Prices in Dhaka
Understanding the factors that influence flat prices in Dhaka is crucial for buyers and investors. Here are the key elements driving the real estate market, supported by data and statistics.
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Economic Growth and Development
- Bangladesh’s GDP growth rate has been robust over the years, with the country achieving a growth rate of around 7.2% in 2022, according to the Bangladesh Bureau of Statistics (BBS).
- The real estate sector itself is projected to grow by 3.79% in the outgoing fiscal year, reflecting its significant role in the overall economy.
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Population Growth and Urbanization
- Dhaka’s population is estimated to grow by about 3.6% annually, one of the highest rates among major global cities, according to the United Nations.
- Rapid urbanization is driven by rural-to-urban migration, as people move to Dhaka in search of better job opportunities and a higher standard of living.
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Substantial Remittance Inflows
- Bangladesh received $21.74 billion in remittances in 2022, as per the World Bank. A significant portion of this remittance is invested in the real estate sector, boosting demand for residential properties.
- Remittances contribute around 6.6% of Bangladesh’s GDP, illustrating their critical role in the economy.
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Inflows of Black Money
- Stakeholders and experts highlight that a portion of investments in Dhaka’s real estate market is funded by black money, which distorts the market by inflating prices. The exact figures are challenging to quantify, but this factor is widely acknowledged within industry reports and analyses.
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Government Policies and Regulations
- Government initiatives like “Vision 2021” and “Vision 2041” prioritize urban development and infrastructure improvement, indirectly supporting the real estate market.
- Policies aimed at easing foreign direct investments and improving housing finance options have also played a role in market dynamics.
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Infrastructure Development
- Major infrastructure projects such as the Dhaka Metro Rail, elevated expressways, and new flyovers have made certain areas more accessible, driving up property values in those regions.
- According to the Dhaka Transport Coordination Authority (DTCA), the completion of Phase 1 of the Metro Rail project is expected to increase real estate prices in adjacent areas by up to 20%.
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Supply and Demand Dynamics
- Despite high demand, the supply of new residential units often falls short, exacerbating price increases. For instance, a report by the Real Estate and Housing Association of Bangladesh (REHAB) suggests that Dhaka needs approximately 120,000 new housing units annually, but current construction rates are much lower.
- The imbalance between supply and demand is a significant factor in the steady rise of flat prices.
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Interest Rates and Financing Options
- Lower interest rates on home loans have made borrowing cheaper, encouraging more people to invest in flats. Bangladesh Bank reports that the average interest rate on housing loans was around 9.5% in 2023, down from previous years.
- Improved access to mortgage financing has enabled a larger segment of the population to enter the housing market.
These factors collectively shape the real estate landscape in Dhaka, influencing flat prices and market trends. Potential buyers and investors should consider these elements when making decisions about purchasing property in the city.
Why Flat Prices Are Rising in Dhaka
The prices of flats in Dhaka have started to rise again after a period of stagnation, largely due to increased demand for new homes and a surge in construction costs. Here’s an in-depth look at the factors driving these price hikes:
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Macroeconomic Vulnerabilities and Increased Raw Material Costs:
- The overall flat sales are slowing due to high prices, influenced by the country’s macroeconomic vulnerabilities and rising raw material costs.
- According to realtors, flat prices have increased by up to 40% in the last one and a half years. This sharp rise is a direct result of the increased costs of construction materials, which have been impacted by global economic fallout from the Russia-Ukraine war.
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Cost of Construction Materials:
- An assessment by the Real Estate & Housing Association of Bangladesh (REHAB) shows significant increases in the costs of various construction materials:
- Rod: Increased by Tk 130 per square foot
- Cement: Increased by Tk 24.75 per square foot
- Sand: Increased by Tk 28.12 per square foot
- Stone Chips: Increased by Tk 78.75 per square foot
- Bricks: Increased by Tk 50 per square foot
- Aluminium Frames: Increased by Tk 40 per square foot
- Iron Grilles: Increased by Tk 12 per square foot
- General Electrification: Increased by Tk 30 per square foot
- Sanitation: Increased by Tk 30 per square foot
- Labour Charge: Increased by Tk 60 per square foot
- Overall, the cost of constructing buildings has increased by around Tk 500 per square foot.
- An assessment by the Real Estate & Housing Association of Bangladesh (REHAB) shows significant increases in the costs of various construction materials:
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Devaluation of the Local Currency:
- The devaluation of the Bangladeshi Taka against the US Dollar has further fueled the rise in raw material prices, making construction more expensive and pushing up property prices.
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Impact on Buyers and Market Dynamics:
- The steep increase in flat prices has led many prospective buyers to reconsider their purchasing decisions. As Nashid Islam, director at ABC Real Estates Limited, mentioned, the price hike of raw materials due to the Russia-Ukraine war has caused sales to stagnate.
- There is also a significant gap emerging between realtors and buyers due to the abnormal price hike of flats. Kamal Mahmud, first vice-president of REHAB, noted that the sales are moving at a snail’s pace due to the unfavorable economic conditions.
- Mir Nasir Hossain, managing director of Mir Holdings, highlighted that the high demand seen in mid-2021 was partly driven by speculation about government policy changes regarding undisclosed income investments.
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Challenges from Policy and Regulations:
- Guidelines in the Detail Area Plan (DAP) prepared by Rajdhani Unnayan Kartipakkha (RAJUK) are not clear, causing uncertainty for real estate developers and impacting their decision-making on new projects.
- Kamal Mahmud has called for clear government clarifications on the new DAP to help stabilize the market.
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Effect on the Real Estate Sector and Economy:
- The ongoing economic crisis has created a challenging environment for the real estate sector. High import costs, material prices, and political uncertainties have all contributed to slow property sales.
- Enamul Haque, executive director (real-estate sales) of Concord Real Estate Ltd., and Aysha Siddika, executive director (brand) of bti, both pointed out that there is little demand for properties as prices have increased significantly.
- The real estate sector’s difficulties are also impacting backward linkage industries, leading to concerns about potential job losses.
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Consumer Financing and Market Outlook:
- Despite the challenging market conditions, the demand for home loans has not decreased significantly. A senior official from a renowned bank mentioned that there is no record of people returning loans or refraining from purchasing properties due to the price increases.
In summary, the rise in flat prices in Dhaka is driven by a combination of increased demand, higher construction costs, macroeconomic challenges, and regulatory uncertainties. The market’s current state reflects a complex interplay of these factors, impacting both buyers and the broader real estate sector.
Tips for Potential Buyers and Investors
Navigating the dynamic real estate market in Dhaka can be challenging, especially with the recent fluctuations in flat prices. Here are some essential tips for potential buyers and investors to make informed decisions:
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Researching the Market and Staying Informed:
- Market Trends: Keep an eye on the latest market trends and developments. Understand the factors driving price changes, such as construction costs, economic conditions, and regulatory updates.
- Area Analysis: Different areas in Dhaka offer varying price points and amenities. Research neighborhoods to find the best fit for your needs and budget. High-demand areas like Gulshan, Banani, and Baridhara might have higher prices, but developing areas like Badda and Rampura could offer better value for money.
- Property Value: Look at historical data and future projections to gauge the potential appreciation of properties. Platforms like RBSProperty, Bproperty provide detailed market analyses that can help you stay informed.
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Engaging with Reputable Real Estate Agents and Developers:
- Professional Guidance: Work with experienced and reputable real estate agents and developers. They can provide valuable insights, negotiate better deals, and ensure that you are making a sound investment.
- Background Check: Verify the credentials and track records of the agents and developers you engage with. Look for reviews, testimonials, and any records of previous projects to ensure credibility.
- Legal Assistance: Consider hiring a legal advisor to help you navigate the complexities of property transactions. They can ensure that all legal documents are in order and that you are protected from potential fraud.
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Considering Long-Term Investment Potential:
- Future Growth: Assess the long-term potential of the area where you plan to buy a property. Look for upcoming infrastructure projects, government initiatives, and overall development plans that could enhance property values.
- Rental Income: If you are considering buying property as an investment, evaluate the rental market in the area. High-demand areas with good amenities tend to attract tenants, ensuring a steady rental income.
- Resale Value: Think about the resale value of the property. Properties in well-developed areas with good infrastructure and amenities are likely to fetch higher prices in the future.
- Financial Planning: Ensure that your investment aligns with your long-term financial goals. Factor in all costs, including property maintenance, taxes, and potential fluctuations in the market.
By staying informed, working with trusted professionals, and considering the long-term potential of your investment, you can navigate the Dhaka real estate market more confidently and make decisions that align with your goals.
Challenges in the Dhaka Real Estate Market
Dhaka’s real estate market is experiencing significant growth, driven by a rising middle class, urbanization, and increased disposable incomes. However, this growth comes with a set of challenges that need to be addressed to ensure sustainable and inclusive development.
1. Land Scarcity and Escalating Prices: One of the most pressing challenges in Dhaka’s real estate market is the acute scarcity of land. Dhaka is one of the most densely populated cities in the world, which limits the availability of land for new developments. This scarcity drives up land prices, making it increasingly expensive for developers to acquire land for new projects. Consequently, the high cost of land is passed on to buyers, making flats unaffordable for many potential homeowners. This issue necessitates innovative approaches to land use and construction to maximize the available space efficiently.
2. Rising Construction Costs: The prices of construction materials such as cement and steel have surged significantly due to global economic factors, including the Russia-Ukraine war. The cost of key materials like rod, cement, sand, and bricks has increased by up to 40% in the past year and a half. This rise in material costs directly impacts the overall construction expenses, leading to higher flat prices. As a result, many prospective buyers are priced out of the market, slowing down sales and affecting the overall real estate sector’s growth.
3. Economic Vulnerabilities: The broader economic context in Bangladesh, including inflation, currency devaluation, and economic uncertainties, poses a significant challenge to the real estate market. The devaluation of the local currency, the taka, against the US dollar has further inflated the prices of imported raw materials, exacerbating the cost pressures on developers. Additionally, the ongoing economic slowdown due to the pandemic and other global factors has reduced the purchasing power of potential buyers, leading to a stagnation in property sales.
4. Regulatory and Legal Hurdles: The real estate sector in Dhaka faces regulatory challenges, including unclear guidelines in the Detail Area Plan (DAP) prepared by Rajdhani Unnayan Kartipakkha (RAJUK). The lack of clear regulations hampers developers’ ability to plan and execute new projects effectively. Additionally, issues related to property rights, legal frameworks, and bureaucratic red tape add to the complexity of real estate transactions, making it difficult for developers and buyers to navigate the market smoothly.
5. Need for Sustainable Development: As the real estate market grows, there is an increasing emphasis on sustainability and eco-friendly practices. However, integrating these practices into new developments poses a challenge. Developers must balance the need for modern, amenity-rich properties with sustainable building practices that minimize environmental impact. This includes adopting green building techniques, energy-efficient designs, and waste reduction initiatives. Ensuring that new projects meet sustainability standards while remaining financially viable is a complex task that requires careful planning and execution.
6. Infrastructure and Urban Planning: Effective urban planning and infrastructure development are crucial for the long-term success of the real estate market. Dhaka’s rapid urbanization has outpaced the development of essential infrastructure such as reliable utilities, transportation networks, and social amenities. The lack of adequate infrastructure can deter potential buyers and investors, affecting the market’s growth prospects. Strategic urban planning that addresses these gaps and promotes balanced development across the city is essential for sustaining the real estate sector’s momentum.
7. Socio-Economic Factors: The economic divide between different segments of the population also poses a challenge. While the middle class is growing, there remains a significant portion of the population that cannot afford the high prices of flats in Dhaka. Developing affordable housing solutions that cater to the needs of lower-income groups is crucial for creating an inclusive real estate market. This requires collaboration between developers, policymakers, and financial institutions to provide accessible housing options and financing solutions.
Conclusion
The challenges facing Dhaka’s real estate market are multifaceted, requiring a coordinated effort from all stakeholders to address. By tackling issues such as land scarcity, rising construction costs, regulatory hurdles, and infrastructure gaps, the market can continue to grow sustainably. Emphasizing sustainable development practices and creating affordable housing solutions will be key to ensuring that the benefits of Dhaka’s real estate boom are shared broadly across society.
