Residential plot sales up as owners reel from Covid woes

Sales of residential plots have increased markedly during the pandemic, but the trend is not what it sounds like – the sellers, in most cases, are those who bought the property in the pre-pandemic time.

According to information provided by the Directorate of Registration, buying and selling documents of about 1.46 lakh residential plots were registered across the country in the first six months this year. The figure is 41,000 and 18,000 less compared to the entire 2020 and 2019, respectively.

Speaking to The Business Standard, a number of sellers said they were forced to sell their plots to save their businesses or to bear family expenses in the wake of income losses induced by the pandemic.

Take for example Hasan Sumon, a US-returnee Bangladeshi expatriate who bought a 5-katha plot in the Uttara Housing Project (third phase) in 2011 when he was in the United States. He returned to Dhaka permanently in 2016 and started contracting and transporting businesses.

As business slowed down due to the Covid-19 pandemic last year, Hasan sold the plot to keep the ailing business alive as well as to run his family.

"I started my business in 2016 by buying two covered vans for roads and highways contracting, bridge construction and transportation of goods. Everything was going well until the pandemic. Work on my six ongoing projects came to a halt amid the pandemic due to various reasons including worker shortages," he said.

Hasan said he had a lot of debt too and no money in hand to pay some previous arrears of construction material and equipment purchase. "I could not collect my due bills from the government. I applied for a bank loan but did not get any. At last, I was forced to sell the plot," he added.

Land owners and officials of housing projects say since there are not enough buyers amid economic slowdown from the pandemic, the owners are selling their land at prices much lower than the market price, even, in some cases, incurring losses.

Thus the same pandemic that has become a bane for the sellers has turned into a boon to potential buyers as they see it as an opportunity to buy land at bargain prices.

Nipendra Nath Sikder, assistant inspector general of registration at the Directorate of Registration, told The Business Standard that almost all the plots, if not all, that have changed hands in the past one and a half years have been sold to third parties by people who had bought them from various public and private housing projects earlier.

An official of the Purbachal New Town project, the country's largest government housing project, said, "All 26,000 plots of the project were sold a few years ago. But, many plot owners are now selling their plots. This trend has increased amid the pandemic.

"Compared to 2019 and 2020, the authorities have provided the highest number of no-objection certificates this year for selling or handing over plots."

In a sharp contrast, direct sales by residential projects have come down drastically.

Acknowledging this, Humayan Kabir, executive committee member of the Bangladesh Land Developers Association (BLDA) and director of Pioneer Holdings Ltd, told TBS that many project owners are not even able to recoup the investment even after offering discounts on plot prices.

In a project in the Bosila area of the capital's Mohammadpur, Pioneer Holdings sold a 3-katha plot at Tk70 lakh in 2018. "Some plots under the project are still unsold, but we have not found any buyer even after offering Tk2 lakh discount on each plot amid the pandemic. The situation is the same in most projects."

Most plots are in and around the capital

According to the Directorate of Registration, more than 89,000 plots worth Tk27,000 crore have been registered in Dhaka, Narayanganj, Gazipur, and Narsingdi this year.

Most of these plots are in different housing projects of Ashulia, Savar, Keraniganj, Dohar, Kalampur, Mirpur, Mohammadpur, Demra, Badda, Khilgaon, Shampur, Dhanmondi and Uttara in Dhaka.

In the Purbachal New Town project, 3,624 plots were sold in the January-June period this year for Tk1,899.2 crore whereas 2,338 plots were sold last year for around Tk2,000 crore.

According to people concerned, about 600 plots have been sold in the Jhilmil Housing Project run by the government in Keraniganj this year. About 2,000 plots have been sold in the Uttara Residential Project (third phase).

Compared to last year, different plot owners have sold more plots this year, they said.

In Chattogram, 26,000 plots have been sold in government and private housing projects in the first six months of this year.

ASM Raihanul Ferdous, chief engineer (project and design) of Rajdhani Unnayan Kartripakkha (RAJUK), told The Business Standard, "Five government housing projects are still being developed in the capital and its adjoining areas. There are also about 250 private housing projects. All the plots in the government housing project have been sold. However, many owners in the private projects are selling their plots."

An official of Amin Mohammad Land Developments Ltd, one of the leading real estate companies in the country, said, "We have about 35 housing and real estate projects underway. The sale of plots is very low amid the pandemic. Many buyers are also selling their plots to third parties."

He said that although the sale of plots is low, the sale of flats has increased more than before.

The Business Standard talked to five more people who have sold their plots due to Covid-19 induced financial crisis.

One of them is Mosharraf Hossain, owner of Tamanna Restaurant in the capital's Malibagh area. He sold a 3-katha plot in Aftabnagar.

"Restaurant business was completely closed for about a year due to Covid-19. But I continued paying the salaries of 15 employees of the restaurant regularly," he said.

"All five members of the family contracted the virus in April this year. My mother died. The condition of my cancer patient wife became critical. Doctors advised me to take her abroad for better treatment. That is why I was forced to sell one of the two plots I had bought in Aftabnagar about 16 years ago," he added.

Southeast Bank official Sohail Mahmud bought the plot of Mosharraf Hossain.

"My wife and I had a plan to build a house in Dhaka. We have been trying to buy land or plots for several years in various residential projects or in the suburbs of Dhaka. At last, we bought the plot of Mosharraf Hossain for Tk1.8 crore. We could not buy a plot like this even with Tk2.20 crore two years back," he said.

He said another colleague of his bought a plot like this at the same rate in Aftabnagar a month later.

Medical equipment importer Abdul Qayyum Russell has bought the plot of Hasan Sumon in the Uttara Housing Project. He said, "I live in a rented house in Sector 10, Uttara. My office is also here. During Covid-19 I have had a good business. I was looking for a plot in Uttara for a long time. I have bought the plot now as the price is lower than other times."

Ali Habib, chairman of King Estate Agency, a company that mediates buying and selling of plots in different housing projects, said, "We have dealt with more plot selling in 2020 and 2021 than the previous years. Last year, about 1,100 plots were sold through our company. This year, we have been involved in about 600 plot sales."

Mostafa Kamal Mohiuddin, executive chairman of Bangladesh Land Developers Association (BLDA) and chairman of Magura Group, said, "The business of land developers fell in risk during the pandemic. Now it's getting a little better again," he added.