Bangladesh’s real estate sector is going through a prolonged downturn as apartment sales continue to decline sharply, leaving developers under severe financial pressure. At the same time, the market for construction materials such as rods, cement, tiles, sand, bricks and stones has also slowed significantly.
Industry insiders say the sector is struggling to survive due to high bank loan interest rates, dollar volatility, inflation and soaring construction costs.
According to the Real Estate and Housing Association of Bangladesh (REHAB), monthly apartment sales, which once stood at around 1,000 units, have now fallen to only 250–300 units. Luxury apartment markets in areas such as Gulshan, Banani, Bashundhara and Dhanmondi have been hit the hardest, with sales dropping by 60–70 percent.
Sector stakeholders said prices of rods, cement, bricks, sand and stones have increased by nearly 30 percent over the past few years, significantly raising construction costs. As a result, many middle-class buyers are moving away from purchasing flats. In addition, the reduction in Floor Area Ratio (FAR) has lowered the number of floors developers can build, making landowners less interested in signing agreements with housing companies.
Visits to construction material markets in Banglamotor, Mirpur and Badda found fewer customers in most shops. Traders said sales have nearly halved over the last two years. A tile trader at Banglamotor said daily sales that once reached several lakh taka now sometimes fail to cross Tk50,000, making it difficult to pay bank installments, warehouse rent and workers’ wages.
REHAB Senior Vice-President Abdur Razzaq said the entire housing sector is under pressure, with apartment sales declining sharply and new project launches slowing down. “Not only developers, but also construction material traders are facing serious losses,” he said.
He added that rising bank interest rates have made it difficult for many entrepreneurs to continue operations, while higher construction costs and lower buyer demand are discouraging new investments.
Bangladesh Cement Manufacturers Association President Md Amirul Haque said the cement industry is also facing a major slowdown. “Due to weak demand, a large portion of production capacity remains unused. Easy-term loans and policy support are needed to sustain the industry,” he said.
The steel sector has reported a similar crisis. GPH Ispat Additional Managing Director Almas Shimul said rod demand has fallen alarmingly because of stagnation in the housing market, forcing companies to cut production.
Industry insiders estimate that around 20 million people are directly and indirectly employed in the housing sector, while more than 169 backward linkage industries depend on it. They warn that a prolonged downturn could negatively impact the overall economy.
Bangladesh Bank data show that home loan interest rates rose from 9 percent in 2022 to 17 percent in 2024, and currently remain around 14 percent. Bankers say high interest rates are discouraging middle-class and general buyers from taking home loans.
Mutual Trust Bank Managing Director Syed Mahbubur Rahman said Bangladesh has very limited long-term financing facilities for the housing sector. “The government can help revive the sector by introducing long-term home loans at lower interest rates,” he said.
Experts believe the housing sector is one of the key drivers of Bangladesh’s economy, contributing to employment, industrial production and government revenue. They warn that without quick policy support, tax incentives and easier financing, the crisis may deepen further.
