Juned Ahmed, an official of a private bank, bought a 1,525 square-feet used flat in the Sector 10 of the capital’s Uttara at Tk 83 lakh. Had he wanted to purchase a new one, he would have to shell out at least Tk 1.20 crore, an amount that would have been tough for him to manage.
But he is overjoyed.
“The flat is almost new, and without any hassle, the owner has handed over the possession of the property.”
Like, Ahmed, Awry Ehsan Chowdhury bought a flat in Mohammadpur at a reasonable price. She declined to disclose the price.
Ahmed and Chowdhury are two of a growing army of buyers who are showing an increasing interest in the secondary property market in the capital city as the properties are cheaper and spacious and come with utility services, especially gas connection, according to realtors and home loan providers.
”The demand for the secondary flat is growing,” said FR Khan, managing director at Building Technology & Ideas (bti), which sells brand new and secondary flats.
There are two reasons: they can be bought at lower prices, and they are roomy.
According to the new regulations on buildings, owners cannot use around 400sft of a 2,000sft flat although they have to pay the price. But, the owners of used flats can use the entire available floor space and rooms were spacious.
“If we sell 30 flats per month, five will be the used ones,” Khan said.
In some cases, buyers will have to renovate the flat. In some cases, they will get a flat in excellent condition, he noted.
According to a recent assessment of Bproperty, a property solutions provider, the ready flat market segment or the secondary property market have always been at the forefront of Bangladesh’s real estate industry.
“This high demand for secondary properties is reflected everywhere, all the time,” according to the company.
Data on property demand in the last 14 months showed the requests for secondary properties in Dhaka averaged 76 per cent of all queries.
Even during the peak of the pandemic in April and May, when the entire real estate sector experienced a slowdown, about 65 per cent of all property demand in Dhaka was for ready flats.
The highest percentage of query for such a category of properties was experienced in August last year when it accounted for a staggering 86 per cent of nearly 5,000 property requests.
The momentum continued in the last six months as Bproperty received more than 20,000 new requests for secondary properties.
A significant portion of people contacting the firm for secondary market properties looks for houses in Mirpur, Uttara, Dhanmondi and Bashundhara residential area.
Mahzabin Chowdhury, head of marketing of bproperties.com, said the demand for secondary properties was solid.
Every month, 4,000 to 5,000 real estate hopefuls reach out to Bproperty in search of such properties.
More and more people are showing interest in Mohammadpur, Badda, Banasree and Dakshin.
Even though there hasn’t been an adequate supply of secondary properties compared to demand, popular areas such as Mirpur, Uttara and Mohammadpur have plenty of ready flats available, according to bproperty.com.
Among the secondary properties currently available on the website, about 21 per cent of all the units are located in Mirpur, 9.7 per cent in Uttara and 6.4 per cent in Mohammadpur.
One of the major reasons people search for homes in Mirpur, Badda or Dakshln Khan is affordability, Mahzabin Chowdhury said.
“Even, some parts of Uttara can be great locations to find affordable secondary properties,” she noted.
The average price of ready flats in Mirpur in the last six months was Tk 4,921 per square feet, with certain places such as Pirerbag and Section 11 offering flats at Tk 3,100 per square feet, Chowdhury said.
As for Uttara, the average price of ready flats in the last six months was Tk 6,503 per square feet, though the inner sectors are more affordable than the outer ones.
Dhanmondi can be complex in terms of the price of ready flats. The average price of recently added properties can be Tk 10,000 per square feet. Properties in West Dhanmondi and Shankar were, on average, are sold at Tk 6,500 per square feet.
Sirajus Salekin, head of mortgaging at IPDC Finance, said secondary flats were comparatively cheaper than the new ones, so the middle-income groups that couldn’t spend a big amount purchased used properties.
The non-bank financial institution provides home loans against secondary flat, and the segment’s share in the loan portfolio is more than 20 per cent.
The number of loan files for secondary flats is increasing gradually, Salekin said.
“People like to purchase suitable secondary flats due to availability of gas connection, while there is no guarantee that new flats will have the connection.”
According to the loan assessment of IPDC Finance, the price of a 1,200sft to 1,500sft flat is Tk 60 lakh to Tk 70 lakh, depending on the location.
Kamal Mahmud, vice-president of the Real Estate and Housing Association of Bangladesh, and managing director of Skiros Builders, said the demand for secondary flats was good, but products were not available.
He said the REHAB had urged the National Board of Revenue to reduce the registration cost for secondary flats to help expand the segment of the housing market.