Why Dhaka’s workforce can no longer afford an apartment
Developers say they are not making profits, while the middle class—the largest segment of Dhaka’s population—say they can no longer afford apartments. Then, who are actually buying these flats?
What does it mean to have a secure life in Dhaka? A stable income, a safe neighbourhood, some access to greenery, and the ability to send children to a good school. These aspirations are closely linked. In practice, they hinge on a single condition — the ability to own an apartment.
However, for thousands of young, skilled graduates entering the workforce today, that condition is no longer attainable. What was once achievable through steady employment has increasingly become dependent on inheritance. As apartment prices continue to outpace income growth and entry-level wages stagnate, homeownership in Dhaka is slipping beyond the reach of even securely employed middle-class families without access to family wealth.
Faria Zohora, a Dhaka-based mother of three who works remotely for a Canadian firm, earns enough—along with her husband—to maintain a stable middle-class life. Buying an apartment, however, remains out of reach.
"Realistically, an apartment in Dhaka is out of reach for us. Even with long-term planning, we would have to buy land instead. Purchasing a flat on a fixed salary is almost impossible," she said.
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High-end neighbourhoods have long been inaccessible to the middle class. But even in relatively cheaper and poorly serviced areas such as Bosila and some other parts of Mohammadpur, prices now stand at around Tk5,000 per square foot.
Even a modest two-bedroom apartment typically costs close to Tk40 lakh. Developers usually require a down payment of at least Tk15 lakh, with monthly instalments varying based on interest rates and loan tenure. For households earning between Tk30,000 and Tk50,000 a month, meeting these upfront and recurring costs is virtually impossible without external financial support.
"How long can one remain burdened by a housing loan? If a significant portion of income goes toward repayments, there is little left for savings, healthcare, or children's education. I am now considering leaving Dhaka altogether, possibly even moving abroad," she added.
This experience is increasingly common among young professionals in the city, many of whom now want to move abroad because Dhaka no longer promises them basic housing security. Even when some people manage to save enough to buy a flat, they increasingly choose to invest that money in moving abroad instead.
In the early 2000s, a mid-level professional could buy a modest flat in Dhaka with seven to ten years of income. Today, the same flat demands the equivalent of 25 to 30 years of earnings.
What does the market look like today?
As affordability plummets, so does the sale of apartments. Developers have been on a rough patch ever since Covid-19. Flat sales and bookings in the capital have plummeted by approximately 35% over the past one year, impacted by inflationary pressures, rising construction material costs, and political shifts triggered by the July-August revolution.
"Most of these flats are bought by corrupt officials, bureaucrats, and wealthy elites. High-end buyers are typically large business groups that also evade substantial amounts of tax. As a result, demand for luxury housing remains strong, while mid-range and middle-income housing projects continue to stagnate."
The information was disclosed by 25 real estate developers at the Real Estate and Housing Association of Bangladesh (REHAB) Housing Fair held at Agargaon on 25 December, last year. They reported a 25% increase in construction costs, primarily due to the higher prices of raw materials like steel and cement, and the Detailed Area Plan (DAP) that limits flexibility for construction.
According to Naimul Hassan, the Managing Director of a development company named Hassan and Associates, the market is currently shrinking and the demand for apartments and commercial spaces have largely declined too.
"Apartment sales have clearly declined. In Bangladesh, real estate is not a profitable business anymore. Political instability is a big factor here. Even small instability makes people cautious. They want to preserve their savings rather than invest or break that savings for a flat purchase. Also, construction costs are rising. The prices of construction materials keep increasing, which adds pressure," Hassan told TBS.
However, as the prices of these materials are largely determined by international markets, the government has limited control over their cost.
But this raises a fundamental question: if developers say they are not making a profit, and if the middle class—the largest segment of Dhaka's population—can no longer afford homeownership, then who is actually buying these flats?
A structurally distorted market
Kamal Mahmud, former vice president of REHAB argues that the current crisis stems from a structural failure in the housing market, marked by a shortage of affordable apartments and widespread corruption.
"Most of these flats are bought by corrupt officials, bureaucrats, and wealthy elites," Mahmud said. "They often purchase multiple units, sometimes under the names of relatives or employees. High-end buyers are typically large business groups that also evade substantial amounts of tax."
As a result, he said, demand for luxury housing remains strong, while mid-range and middle-income housing projects continue to stagnate.
"The government has no serious focus on this issue. If land allocation were transparent, prices would come down," Mahmud added. "Thousands of acres of prime land have been allocated to powerful groups. Many of these plots were leased but never developed. If there were a law requiring development within three years—or cancellation of leases—the crisis could ease."
Instead, he noted, land ownership has become increasingly concentrated among wealthy individuals, industrial groups, banks, and large corporations.
"Look at high-end projects like Jolshiri," Mahmud continued. "Flats sell for Tk2–3 crore and construction continues rapidly, while projects in Purbachal remain stagnant."
Over time, he argued, housing assets have increasingly flowed upward. Many plots were originally allocated to lower-income individuals at subsidised rates but were later sold to wealthier buyers, accelerating the transfer of wealth to the top.
Mahmud believes there is a relatively straightforward regulatory intervention that could cool the market.
"If the government took one key step—integrating flat registration directly with the NBR tax filings—things would change," he said. "The moment a flat is registered, the NBR should automatically verify the buyer's income source. That would significantly reduce speculative and illicit purchases, easing price pressure."
Until such structural reforms are introduced, Dhaka's housing market is likely to remain tilted toward the wealthy—leaving the city's young workforce locked out of homeownership and increasingly uncertain about their future in the capital. Even if solutions are not immediately implemented, it is important that people at least understand where the problem lies.
