Covid-19 halts real estate sector’s turnaround

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The pandemic has put a brake on the country’s real estate sector turnaround, which sector insiders say may lead to joblessness for at least 35 lakh people

It is not always easy to overcome a long-standing recession in business. But if and when it is, the entire credit goes to those working with patience and dedication, to revive the dying field of business they are engaged with.

Such has happened to the country’s real estate and housing sector. It overcame an inordinately long period of losses from 2007-08 until 2018, only to encounter another potential loss-making period arising out of the coronavirus pandemic. 

The pandemic has put a brake on the country’s real estate sector turnaround, which sector insiders say may lead to joblessness for at least 35 lakh people. 

A statement from Real Estate and Housing Association of Bangladesh (REHAB), issued by its president Alamgir Shamsul Alamin on April 5, noted that the coronavirus pandemic might lead to a loss of jobs for at least 35 lakh people directly or indirectly involved in the real estate business.

The job losses would have a trickle-down effect on other sectors as well, the statement added.

REHAB vice president Liakat Ali Bhuiyan said the housing sector and other related businesses were facing massive financial losses due to the novel coronavirus.

“From 2007-08, the housing sector began to sustain losses, which we were able to turn around from 2018. But now realtors are again facing losses due to Covid-19. It is not yet certain how much damage the sector has sustained,” he added.

Talking to Dhaka Tribune, Sayeed Ullah Koyel, managing director of Reefa Properties Development Ltd, said the biggest concern was that at least 50% people in this sector could lose their jobs if the crisis deepened.

However, if banks exempted loans given to the sector, the job losses might not happen, he said.

Other sectors such as steel, cement and ceramics, associated with this sector, had also been affected, he added. 

REHAB president Alamgir Shamsul Alamin Kajal said that the joblessness of workers employed in the sector would have a trickle-down impact on other sectors as well.

Prime Minister Sheikh Hasina announced a Tk72,750 crore stimulus package on Sunday to help mitigate the impact of the coronavirus on the country’s economy.

Taking the anticipated impact into consideration, the government should allocate funds for the housing sector immediately from the stimulus package, Alamgir said. 

He proposed that interest on existing loans taken by housing businesses should be suspended till December this year. At the same time, there should be a relaxation of loan rescheduling facilities.

 Launch of a refinance scheme, as was launched in 2007-2008, for the housing businesses, had become vital to save the sector from a long-term crisis, he said.

According to data from the Bangladesh Bureau of Statistics (BBS) for 2019, the real estate and housing sector contributed Tk1.41 lakh crore, or 7.8% of the country’s gross domestic product (GDP), to the national economy.