Sales and Marketing Activities of Pink Garden City

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Sales and Marketing Activities of Pink Garden City

1.1: Introduction:

Real Estate and Construction Industry play an important role for sustainable development of a country. The conatr5uctoin industry is an important sector for physical expansion and economic development of the country. This sector is well linked with human settlements, employment and environment it is recognized that the health of the Real Estate Development sector is the barometer of the national economy

Real Estate Development in private sector in this country started in pre-liberation days when Eastern Housing Ltd. In the mid-60 undertook land development project known as “Pallabi Project” for housing purpose in the Mirpur area of Dhaka city. Due to the absence of an appropriate urbanization policy, urban growth and urban development is basically Dhaka centered.

Now-a- days the population of Dhaka city has been increased at high rates, but the are has been increased at low rates. There is no magical solution to the present or future housing problem of the city. Government has made lands available for modern housing by earth filling low-laying areas of Dhanmodi, Mhammadpur, Mokhali, Cantonment, Gulshan, Banani, Baridhara, Uttara, Mirpur, etc by his own initiative.

1.2. History:

Pink Garden City.

Bangladesh has come a long way since its independence. It has improved key social indicators and the well being of its people. The Pink Garden City has been an integral part of this progress. Pink Garden City philosophy is simple: To improve living standards.

Pink Garden City, is a milestone in the Real Estate business. It is one of the Real Estate institution that uphold themselves among ten of renowned real estate institution. In the year 1998 only three employees started their functions containing 200sq feet of office premise. Within a very shortest period the business the spread up in a wided range. Now in Mohakhali the company is functioning their own 22 storied building office promise for about 500 personal with good reputation. in the mean time the number of projects stood up to 120 where as much of them has already handed over. At primary stage it collects land and by designing building marketing department works over it to attract customers.

Business turned over for about 200 crores. Customers Banks and self financing accumulating to 200 cores of investment are rolling under Pink Garden City. At now, around 500 workers are working on permanent and adhoc basis. The company started their business singly but now a days a corporate body extended to 16th numbers of sister concern. Good management, skilled workers total implantation of customer service and standardization of advanced technologies, etc. made the Pink Garden City as reputed company in the Real Estate business.

1.3 Quality:

PINK GARDEN CITY. is committed to provide to the living standards of the people. This commitments demands immense social responsibility of ensuring quality in terms quantity, purity, stability, safety, efficacy and presentation of the product. At every stage of the production, a stringent control mechanism involving raw material testing, in-process quality control, finished product testing as well as stability monitoring and documentation is maintained to ensure the highest quality product consistently.

The ever-changing market place has fuelled has PINK GARDEN CITY’ s determination to keep up with the changing times by constantly strengthening the information base, exploring new lines of business and expanding domestic. This prompted the company to undertake infrastructure development to build competitive advantage in order to retain its position as a leading real estate company. PINK GARDEN CITY is committed to developing individual’s human, technical and conceptual skills through various educational and a wide range of internal and external human resource development and job related training programs each and every year.

At PINK GARDEN CITY, a well-planned and structurally designed in- house training activity-involving sales, marketing and production etc. PINK GARDEN CITY is conducted throughout the calendar year. These training programs are conducted by in-house resource persons on a regular basis and as per scheduled. also received training from Rapport Bangladesh Limited and Tack training international on the following topics:

· Time Management

· Customer care

· Customer relationship management

· Leadership

· Team building and leadership

1.4 Factors considered

· Direct interviews were taken by a questionnaire from all types of customers.

· Randomly 100 customers were taken for interviews within the city.

· Customers having the positions of Businessman, Banker, Multinational company’s executives, Doctor, Engineer, Consultant, Private company’s manager, high official etc.

· Customers were fully ensured that their information’s against the questionnaire would preserve confidentially and would not be exposed anywhere.

2.1 Management decision problems

· The problem confronting the decision maker. It indicates the product management decision maker what does he need to do?

· Should newer products be introduced immediately?

· Should the existing promotional program be changed?

· Should the price of the product be changed?

2.2 Marketing research problems

· A problem that entails determining what information is needed and how it can be obtained.

· What information’s needed?

· Quality of the product.

· Availability of the product.

· Brand name effectiveness of the product.

· Communicating effectiveness of all the companies.

· Social responsiveness of the companies.

· Employee’s efficiency of the companies.

· Promotional items of the companies.

· Customer’s weakness of the companies.

· Customer’s satisfactions of the companies.

How the information’s can be obtained

The necessary information’s only from customers by direct interviews with questionnaires. The sample size of customers was 100 the technique was random sampling throughout the city.

2.3 Approach to the problem

The exploratory and qualitative research procedures are followed to conduct the project. That is we was only assigned to collect all the information’s criteria regarding real estate market’s images from customer and insights and understanding of this market. Hence there was no option to conduct the conclusive research or any other research.

2.4 Causes for the exploratory research:

· To provide insights and understanding of the real estate market to know the companies images.

· Information’s need is defined only loosely.

· The research process was flexible and unstructured.

· Sample size was small and no representative.

· Analysis of primary data is qualitative.

· Generally followed by further exploratory or conclusive research.

Expert surveys.

2.5 Types of analytical model

· Primary data analysis.

· Cross tabulation model.

· Graphical interpretation of cross tabulation.

· Find outcome or result drawn from the semantic differential model.

· Recommendation drawn from the overall project experience.

3.0 Questionnaire type for customers:

The questionnaire pattern for customers Sample size: 100 Customers

Please give tick (?) mark to your chosen answers from each of the following questions.

1. On which Real estate company’s product do you normally emphasize?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

2. In your opinion, at present which company is ensuring superior product quality?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

3. Which company’s brand name is easier to memorize?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

4. Which company offers comparatively reasonable price having the appropriate product quality?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

5. Which company is pioneer in introducing newer products consequently?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

6. Which company’s products are more available in most of the area?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

7. Which company provides the most informative promotional materials regarding the product?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

2.7. Which company’s Executives are smart enough to communicate with you?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

9. Which company’s Executives are more active in responding customer’s suggestion?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

10. Which company operates the most innovative marketing approaches frequently?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

11.Which Company committed to on time handover the Apartment?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

12. Which Company committed to post handover service?

(a) Pink Garden City (b) BTI (c) Advance (d) Asset (e) Sheltech (f) Bay (g) Assurance

(h) Rangs (i) Navana (j) Building for Future (k) Urban (l) Amin Mohammad

(m) Domino (n) none (o) All (p) No comment

Real Estate Sector in Bangladesh: An Overview

4.1 Industry Profile:

Dhaka City, born during the Moghul Empire and grown with the British rule, is expanding rapidly. From the beginning of the 20th Century its growth and latter development is marked with sheer lack of proper and far-reaching planning. The impact is now being felt at the end of the century. Dhaka City is undergoing terrific growth phase throughout the last two decades. While there are so many real estate developers in the market, there are also very few of them who have maintained the quality, safety and customer preference. It is customary in the country that the first day quality and impression is lost after a while when people start getting a bit of familiarity. This happens due mainly to lack of professionalism. Sometimes the consumers here are in a fix to choose a particular brand out of many.

A good number of real estate companies are working under one umbrella association named ‘Real Estate and Housing Association of Bangladesh’ (REHAB). Almost 361 Companies are at present affiliated with this association, while more than 400 companies are working independently. BTI took a leading role in the formation of the industry association and is one of the founder members of the REHAB.

4.2 Real Estate Business: a Positive nation for Bangladesh

1 Rehab profile and its activities in Real estate Sector

Preamble: Urbanization is an outcome of both population growth and rural-urban migration. As urbanization increases, more and more people are becoming city dwellers. Bangladesh is not any exception to that picture. The ever-increasing urban population is catering an increasing demand for shelter. The right of shelter is a fundamental right, which is ensured by both UN declaration and the constitution of Bangladesh. But it is very difficult on the part of the government of Bangladesh alone to ensure housing for all. Here comes the need of private sector real estate development.

It is a recognized fact that the health of the Real Estate Development Sector is the barometer of the National economy. In Bangladesh Real Estate Business started in Dhaka in late seventies. During 1970s there were fewer than 5 companies engaged in this business. In 1988 there were 42 such developers working in Dhaka and now in 2004 there are about 250 companies engaged in this business.

Formation of REHAB: With the number of companies increasing gradually, various problems concerning the housing sector cropped up requiring early solution. At this stage it was necessary to form a trade association of the Real Estate developers to protect the overall interests of the sector. To strengthen the role of real estate sector Real Estate & Housing Association of Bangladesh (REHAB) was formed with only 11 members in 1991. The objective of REHAB was to promote formal private sector Real Estate Development in Bangladesh.

Present Performance: REHAB is the only trade organization of Real Estate Developers with a current membership of 260 Developers. All major institutionalized Developers are members of this organization. REHAB is also the “A Class” member of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). In the recent years REHAB has played a very significant role in nation building through Real Estate Development by its members. The members of REHAB contribute a large amount of revenue to the Government exchequer in terms of Registration Cost, Income Tax and Utility Service Charges.

REHAB organizes its most colorful annual event REHAB Housing Fair each year in Bangladesh for the member developers, financial institutions and building material providers. It has already successfully completed three Housing Fairs during 2001, 2002, 2003, 2004 & 2005 at Dhaka Sheraton Hotel Complex. To foster the growth of Real Estate Sector REHAB plans to organize Housing Fair abroad for the Bangladeshi individuals who are living different countries of the World to buy apartment, land and commercial spaces in their home country. Accordingly, the first – ever Housing Fair abroad organized by REHAB on August 2004 at Quality Hotel Hempstead, 80 Clinton Street, New York, USA.

Accelerating urbanization has become tremendous problem to face for the country. The present rate of urbanization is 5-6% annually1 which is really alarming. About 25% of Bangladesh is now living in urban areas and 34% will be living by 20151 & 50% by 20252. There is acute shortage of housing supply in all urban areas and it’s increasing with current demand of 600,000 to 800,000 units all over the country. Particularly in Dhaka this demand is estimated at 60,000 units of real estate apartments combined with 200,000 units of replacement plus backlogs1. Dhaka is currently growing very fast compared to other.

Name of the Association: Real Estate &Housing Association of Bangladesh

Year of Establishment: 1991

No. of Member in 1991: 11

No. of Member in 2008 (January) : 508

4.3 Bangladesh Market: some Key Indicators Growing Scenario:

Real estate sector in Bangladesh is in a growing situation. From 1994-98, over the last 13 years, Bangladesh real estate sector grew at an average of 3.64% reaching the peak at 3.87% in 1999-00. Though it had a fall in 2000-01, there was recovery in 2001-02. For the last 6 years this sector grew impressively and showed a smooth rising trend again it fall in 2008

Real Estate Share of GDP – 2004-08 (%)
India 7.00
Bangladesh 8.90
USA 16.00
Malaysia 15.09
Source: Bangladesh Economic Review 2008,

Executive Intelligence Review:” Fannie and Freddie were lenders”:

U. S. Real Estate Bubble Nears Its End,

by Richard Freeman, June 21, 2002

and Department of Statistics, Malaysia

The comparative scenario of GDP shows a steady 6% growth for Bangladesh. The real estate experts have expressed the opinion that as GDP of Bangladesh is still below that of other South Asian Countries, Bangladesh has more to grow which can be fostered by the continuous increase in the share and growth of real estate sector in the country. The contribution of real estate and construction in GDP of Bangladesh was 16.20% in 1994-95, which became at 16.69% in 2000-01 and attained 17.30% in 2006-0. Compared to India, Bangladesh real estate sector economy is contributing more to the country’s GDP. But Malaysia – one of the most rapidly developing countries has the share at 15.09% while USA has about 16%. This picture of Malaysia and USA shows that real estate sector can contribute more to country’s GDP. Therefore the real estate sector in Bangladesh has huge scope to grow.

Real Estate & Construction Share of GDP

The persistent increase in the real estate sector indicates that real estate activities have been rising which strongly supports more future growth.

4.4 A positive notion for Bangladesh Market

The positive trend of the neighboring countries with the global expansion in the real estate sector also shows a growth opportunity. According to the above graph and past record of INDIA & USA we see that the real estate sector market experiences an average rise of 5-10 years if it is started once. In Bangladesh, before 1985 people in Dhaka city never thought to buy an apartment for living. Before 1995 people would have thought twice buying an apartment. But in the last couple of years the interest in apartment buying has increased rapidly. The boom in Bangladesh real estate market took place between 1988-1991. But it faced fall in 1991-1992 gaining rise in 1993-1994. From 1995-1998 there was not so high growth but the market was stable. From 1999 to 2004 it has been growing rapidly caused by huge household demand, lack of enough land, rapid urbanization etc. in Dhaka City.

The present rate of urbanization is 5-6% annually. About 25% of Bangladesh is now living in urban areas and 34% will be living by 2015. Only 40% of the people of Dhaka city have housing facilities with standard or below standard. Thus from the comparative analysis experts assume that according to the trend of the global market & neighboring countries the growth of housing demand will stay for next couple of years more. Main reasons for positive expectation have been presented evidently in the following section.

4.5 Reasons for positive expectation

Increasing Urbanization

Statistics & studies show that in 2000-2015, urban growth rate has been expected to be at an average of 3.7% for Bangladesh. India – one of the most attractive markets for global real estate is expecting 4.9% growth of urbanization.

Moreover where India is estimated to have 36% people living in urban areas by 2015, Bangladesh is expected to have 34%

Thus in South Asia, Bangladesh holds the second position in terms of urbanization rate & proportion of urban population. This scenario tells that, as India is a rapidly growing real estate market for the world, Bangladesh also may attract more real estate investors and have more growth in this sector.

By 2010, Dhaka is estimated to have about 20 million people that show about 55% estimated growth from 2000. With this amount of people Dhaka is estimated to be the 5th largest city in the world by 2015. This fast urbanization needs enough accommodation and housing supply, which is expected to create a huge market for the real estate sector in Bangladesh.

Urban growth Rate Projection Population Projected Annual Average Growth
(%) 1975 2000 2015 2000-2015
Bangladesh 9.0 25.0 34.0 3.7
India 21.0 28.0 36.0 4.9
Nepal 5.0 12.0 18.0 2.7
Srilanka 22.0 24.0 32.0 3.1
Source: Making Cities Work, Urban Fact Sheet, USAID
Urbanization Data of Bangladesh (In ‘000)
1970 1980 1990 2000 2010 2020
Urban Population 5,059 12,713 21,750 34,354 52,223 74,432
% Urban 7.6 14.9 19.8 25.0 31.1 37.7
Urban Annual Growth Rate 7.8 5.8 4.7 4.3 3.7 3.0
Area Based
Dhaka 1,474 3,257 6,621 12,519 19,393 *
Chittagong 693 1,332 2,265 3,651 5,389 *
Khulna 325 632 973 1,442 2,081 *
Rajshahi 108 238 517 1,035 1,676 *
Source: Rural and Urban Development Case Study- Bangladesh, Oxford Policy Management, June 2004

Rising House rent

House rent has been increasing in Bangladesh since 1994 at high rate. In 1994 and 1999 the inflation rate in house rent was around 25%. Though in the recent times this inflation has been a little bit lower, still in 2008, statistics shows increase of house rent at about 10% in the country.

According to the real estate participants, the inflation in the house rent is encouraging to people to buy apartments not bearing the increasing expenditure of house rent.

Source Consumers Association of Bangladesh (CAB) Research Report 2008

Easy and Available Financing:

· Financing the apartment purchase for individual has become more easy and available. In 1952 Bangladesh House Building Finance Corporation (BHBFC) was established as government organization to finance the middle-income household civil servants which were the first housing finance institution in Bangladesh.

· Interest rate is competitive ranging from 14% to 16%. Maximum amount can be financed is BDT 5 million to 6 million with maximum 20 years repayment option, which varies with the different financing institutions. Loans can be taken to buy apartments or for construction purpose in any part of the country.

· Now there are a number of private specialized housing finance institutions, financial institutions and banks, which provide housing, finance facility up to 70% to 80% of the value of the house or apartment.

Inadequate and costly land:

· Researches indicate that only 30% population in Dhaka city has occupied already more than 80% of residential areas with human settlements and supportive infrastructure1

· Economists and real estate experts states it as highly significant and thus land is becoming increasingly inadequate to provide individual housing solutions. Moreover land is quite unavailable in Dhaka at suitable location for individual housing fulfillment.

· For huge demand and inadequacy of land, price of land is very high in the urban area according to the real estate participants.

· This is making more people inclined to build and share apartments.

Targeting the middle class:

· Studies reveal, in Dhaka city only 5% of the population is in high-income group. Thus 45% of the total population falls into the middle-income group and the rest 50% in the low-income group.1

· Economists and real estate participants see the middle-income group as a huge market for the real estate sector. Builders have started building apartments for middle-income class of 600-900 sft.

· The large unsatisfied middle-income class is expected to be boosting market for the real estate business.

1. Asian City Development Strategies, Fukuoka Conference 2000

Encouraging in Remittance Flow:

· The Government of Bangladesh has declared the foreign remittance inflow through banking sector as tax-free and any purchase of fixed assets by Non Resident Bangladeshis will not require producing any Tax Identification number. It increased remittance inflow in Bangladesh in the recent years.

· According to the economists, non-resident Bangladeshis are vital investors for the real estate sector in Bangladesh, which is continuously supporting it to grow.

Other Issues:

· There is hazards customers face in purchasing lands, which encourages them to buy apartments rather than lands.

· Construction & maintenance of buildings require spending huge time and energy, which make the people reluctant from building houses.

· The influence of western culture & housing design is attracting people more to buy apartments

· These reasons also are contributing to the decision of individuals to buy apartments.

Population growth trend and Demand Analysis

Now in Bangladesh the demand for residential real estate unit is rapidly increasing. The current urbanization rate is 5-6% and 50% people will be living in cities by 2025 according to experts. In the Dhaka City from 1991 the urban population density has increased by about 79% to 2004. It was 4795 persons/sq. km in 1991 and 8573 persons/sq. km in 20041. The population growth in Dhaka city is shown below in Graph.

Population is increasing rapidly in Bangladesh. Dhaka – the mega city is in very faster rate in population increase. This rapidly increasing people need more housing facilities. In the above graph it is noticeable that the house rent in Bangladesh in an increasing condition. More and more increase in house rent implies that people would become less interested to stay in rented house and would try or tend to buy own home. This is also increasing the demand of apartments in Bangladesh especially for the middle or upper middle class group of the society.

This huge lift up in the urban density & rush of the people to Dhaka city has created great demand of accommodation and housing services. Moreover the real estate developers have started targeting the middle-income groups in the last few years to sell apartments. As the major portion of the society is in this group the demand has got to be high. According to REHAB there is demand of about 60000 residential units plus 200000 units of backlogs and replacements every year. But REHAB members can supply only 5000 to 6000 units each year. Now in this intense situation of rapidly growing demand the existing number of developers cannot satisfy the current demand. This scenario ensures us a rising demand oriented situation in future as the gap between demand and supply is increasing.

5.1 Reasons for Development of the Industry :

The main reasons why real estate business developed in Dhaka city are as follows:

1. Scarcity of open space in the important areas of the city.

2. Hazards of purchasing land.

3. Hazards of construction of building.

4. Rapid increase in population of Dhaka.

5. Decrease in the rate of bank interest.

6. Price of land and apartments is increasing day by day.

7. Rent of the apartments is comparatively higher than the rent of privately constructed flats.

8. Open Market Economy. Remittance of foreign currency is very easy.

9. Security.

10. Service facilities such as garbage disposal, central satellite TV connection, apartment’s services saves time, roof top facilities, lift and so on.

5.2 Size and Contribution of the Real Estate Sector:

The size of the real estate sector and its contribution to the economy in terms of employment generation, accrual of investment, contribution to exchequer, output trends and linkage contribution of this sector are stated bellow:

i) Employment Generation

The real estate sector at present employs about one million people, either direly or indirectly involved about 30 lac people in the sector. According to the Labor Force Survey (LFS), in 2006 5.5% of the labor force was engaged in construction where as for 1999-2000 it was 2.1% and 1995-96 it was 1.8%.

ii) Investment

Recent information concerning investment in the housing sector shows steady growth both absolute terms and as a percentage of total private investment and GDP. During the first three years of the fifth Five Year Plan period, the investment in housing and construction was US$ 1273.65. According to this trend till 2007 the investment I housing & real estate sector will be more than 2500$USD. (CPD).

iii) Contribution to Exchequer

The keynote paper indicated that the contribution of the real estate sector to the exchequer is a substantial one. Various revenues like VAT, registration fees, utility connection fees etc. generated in the real estate sector amount to about Tk 36 crore per year. Regarding payment of corporate income tax of the real estate companies no ready information was available.

iv) Output Trend

During the peak years of the early 1990s, over 3,000 apartment units were built by developers every year. Today around 10,000 units are built, but recent time this trend has declined due to delayed delivery of apartments by an average of six months, economic downslide, global recession, and the poor law and order situation.

v) Linkage contribution

The real estate sector has also made substantial contributions to the growth of a host of backward and forward linkage sectors which include Rod, Cement, Bricks, paints, ceramics, aluminium, furniture, consultancy and many others. In this context, he provided examples of catalytic influence of the real estate and housing sector in development of linkage industries whereby the sector is immensely contributing to employment and the GDP. Those include Bangladeshi state-of-the-art ceramic industries, Thai and Kai aluminum, More than a dozen paint industries, A large number of furniture making and interior design companies, An exponentially growing cement sector, which is helping the country to attain self-sufficiency in this important input.

5.3 Market Structure :

About the market concentration in the real estate sector Real Estate business, especially apartment projects, took off in the Dhaka City in the late 1970s. From the early 1980s the business started to flourish and showed robust growth. At present, more than 400 companies are active in the real estate business in the country. About 95 per cent of this business is still dominated by the top 10 companies. The market is highly segmented, primarily based on location, price of the land and size of the apartments. We stated that the main reasons for the development of real estate business in Dhaka city were:

· Scarcity of open spaces in important parts of the city.

· Hazards of purchasing land.

· Rapid increase in the population of Dhaka.

· Fiscal-Financial incentives such as the decrease in the rate of bank interest.

· Restriction of remittance flows which financed the sector.

Rent of apartments had been relatively high compared to the opportunity cost of privately constructed flats. Service facilities which are enjoyed collectively, such as garbage disposal facilities, central satellite connection, security, roof top facilities and lift, save time and reduce costs. Legal and Regulatory Framework.

The legal and regulatory framework concerning the housing and real estate development includes laws such as Building Construction Act (1952), Town Improvement Act (1953), Dacca Master Plan (1959) and Building Construction Rules (1984). These laws are not adequate to facilitate resolving habitation problems. Other limitations of these rules included a lack of appreciation about the differences between planning and building rules, the outdated nature of such rules and the inability of the rules to address the demands of an expanding city and targeting only the middle and high-income groups. There is no standard housing plan for Metro Dhaka. The Master Plan (1959) was, in general, prescriptive in nature, with particular public provision proposed on an individual basis for specific places, with exceptions made for schools and open spaces for which generous standards were proposed. The rigid land use zoning of the Master Plan (1959) is out of date as a basis for development management. The Bangladesh National Building Code (1993) which was intended to ensure safety in construction has not been made mandatory. The Building Construction Rule (1984) demands a great deal of information from the applicant, but imposes very few compliance requirements on him. The procedures involved in the enforcement of law such as taking permission before development and construction were felt to be cumbersome. It was found that a developer has to apply to eight different authorities including WASA, DESA, Titas, Fire Department, civil aviation authority and ward commissioner for permission, which costs money and time. Moreover, the information solicited by the agencies relate mainly to ownership, rather than providing guidance for strategic and development control. Since the housing plans are not detailed, there is ample scope for breach of rules. Lack of adequate staff capacity of the oversight agencies limits monitoring and leaves scopes for non-compliance with the rules and regulations. Two laws which were expected to be enacted, namely Private Housing Policy – 2002 and Multi- Storied Building Construction Policy –2002, will ensure risk-free construction.

Financing the Housing Sector is not found adequate because of high interest rates and limited sources of funds. This is true both for the financing of the developers and the purchasers. The state-owned House Building Finance Corporation (HBFC) is burdened with bad loans, and loan disbursement has tended to be low in recent years. Delta-BRAC Housing came into this market as private-NGO collaboration, but their interest rates are as high as 16 per cent which is higher than even that of the HBFC by one per cent. The major financing organizations for housing are the HBFC and the Commercial Banks while financing by other organizations like Delta-BRAC, National Housing and Micro credit lenders are insignificant. Budgetary Measures in FY2003 Budget Unlike the past fiscal budgets, the government through the FY 2002 – 2003 budget provided a number of incentives to boost the real estate sector of the country. These measures include exemption of registration fees on land development, land sale and apartment transfer which is expected to bring down the overall tax in this sector to the level of 13.5 per cent, waiving of registration fees in cases where the apartment is resold within 5 years of buying and halving of property transfer tax at source. Estimates show that these measures have saved an average buyer about Tk 5 lac on a Tk 45 lac worth apartment. Dr Bhattacharya observed that if tax is paid at a flat rate per square feet of apartment, unaccounted for funds can be mainstreamed.

Reflecting on the response of the sector to these new measures, after a protracted slump these measures have been able to infuse new hope. He also appreciated the reduced registration cost and other related costs, which resulted in the recent increase in the number of apartments which were registered. Estimates showed that in the first six months of Fiscal Year 2003 budget 1,500 apartments were registered over and above the normal number. Though these apartments were purchased earlier, many of the buyers did not get them registered because of the high cost involved. Thanks to the increase in apartment registration, the government could mobilize an extra amount of about Tk 41 core as non-NBR tax. He, however, mentioned that though the provision to allow investment of unaccounted money generated half of the additional income from registration fees, amounting to about Tk 20 core, the incentive itself has raised questions as regards the ethics of such measures. Whilst appreciating the beneficial measures taken in the budget, a number of additional budgetary interventions which include:

1. To keep up the impetus, the current tax breaks may continue.

2. Registration fees are perceived to be still high and can be reduced by making provisions for realistic land price disclosure.

3. Fiscal support for linkage industries can lead to reduced raw material cost.

5.4 Impacts of Private Real Estate Developments on Patterns of Urbanization Findings & Recommendations :

Actually the private real estate entrepreneurs are providing residential facilities for the higher income group. Profit maximization is their only motto. Hence, huge lack of services and facilities are observed in the recent real estate schemes. Consequently, several unexpected and disastrous impacts are observed. In observed land use composition with to the standard are stated in the table.

Land Use parameter % of planned total land area % of actual land use area
Residential 40-65 80-85
Community Facilities 5-10 2.5-3.5
Road & Streets 20-30 10-12
Open Space (parks and playground) 5-10 0
Shopping 5-10 0

Here it is seen that for maximizing the profit the private developers are selling more than 80% of the total project area.

In Bangladesh the housing problems is basically for the lower income people, but the private real estate developers are developing the land for the higher income people. Due to poor load bearing capacity of soil, high-rise buildings are very difficult to build in places being developed by real estate companies at present. Hence, low density of residential area is resulting in the form of inefficient utilization of the land resources. Urban area is expanding horizontally without maintaining any guidelines.

Where selecting the potential land for private land banking, the urban expansion zone was given utmost priority. The expansion zone is the potential urban area where services and utility facilities are supposed to expand within short period of time. When this area is facilitated with the utility and services, the land price also increase substantially. This is a land speculation process may be called private land banking which has created a belt around the city. There are several impacts of this process:

To accommodate the incoming rural to urban migrants, the city needs to expand. But this belt is creating hindrances for the city expansion. The Inner city is facing tremendous pressure of migration. Due to the skewed distribution of land, people are forced to live in slums and squatters. At the same time the land value is also increasing. The result is a potential land price bubble in this area.

People are purchasing the land, keeping them vacant for a few years to get more benefit while selling the same. Hence, city is expanding with rural nature and rural areas are losing its identity.

City is forced to expand to a direction in a linear nature through the gaps of the private land banks which is not either expected or planned before.

Several questions can be raised regarding the positive impacts of this process. Through creating tremendous pressure on the core area of the city whether or not this process can maintain equity in the distribution of land. Unfortunately the answer would be negative as the land ownership pattern is really skewed and complex. Moreover large parcels of lands are occupied by the government organization like Cantonment, Bangladesh Railway etc. at the heart of the city which is either left vacant or under utilized.

Of course urbanization is always essential for economic diversification and country’s long term sustainability. From this point of view, these real estate developers are patronizing urbanization alternatively helping Bangladesh in its economic sustainability. But where urbanization is itself a burden for Bangladesh; how far this process can create diversification that is questionable.

The unexpected and unplanned growth of residential areas is creating extra problems for the city managers. There is no link between the existing structure plan and the real estate developments. Consequently these projects are creating sheer stress on the planned development of the city. This is also creating polarization in the demand of services facilities.

5.5 Findings & Recommendations

Right to Housing for all

The rich people housing is not a problem. If strengthening is the purpose, middle and low income groups should be targeted. Due to the high price of land, most of which is privately owned, it has become very difficult to include middle and low-income people in any housing scheme. Thus providing shelter for low-income people without subsidies has become quite difficult. Though provision for middle and low-income people is possible in government owned khas land, this process in many cases became unsuccessful because it was observed that even if quality shelter is provided for low-income people, ultimately those facilities are enjoyed by the high-income group. Inclusion of relevant experts in decision-making is required in this regard and the private sector should also be involved in this process.

The real estate sector should incorporate the idea to set an example in the world by providing housing for the poor. He also regretted that there are many examples of allocating land at nominal prices but such examples are not available for low-income people.

In the absence of a land policy it can not be made clear how land can be made available for new uses and how sharply increasing land prices can be controlled. For low and middle-income people the problems of land scarcity and high prices were of continuous concern. The price of one katha (i.e. 720 sft) of land being around Tk. 50 lac has put low and middle-income people out of the housing market.

Though 30 per cent of people living in Dhaka are slum dwellers there is no housing policy for them. The developers develop for profit. If proper attention is not paid, the number of slum dwellers will increase rapidly. In the eastern fringe of Dhaka all the lands up to the Balu River are being grabbed, and whatever development is taking place in that area is not for low-income people. The purchasers are constrained by their capacity especially because of the high cost of borrowing.

Primary Data Analysis Customers:


Question- 5.5.2

In your opinion, at present which company is ensuring superior product quality?

Votes casted against the above question from 100 customers are shown as following

Name of the Real Estate Company Number of votes obtained
Advance 7
Asset 16
Sheltech 8
Bay 6
Assurance 9
Rangs 10
Navana 7
Building for Future 7
Urban 6
Dom ino 5
Amin Mohammad 6


Which company’s brand name is easier to memorize?

Votes casted against the above question from 100 customers are shown as following

Name of the Real Estate Company Number of votes obtained