Many real-estate companies continue to close down their business amid a prolonged sluggish trend in the country's housing sector, industry-insiders said.
According to them, at least 200 property businesses have disappeared from the real-estate apex body-- Real Estate and Housing Association of Bangladesh (REHAB)--in the last two years.
Another bunch of 103 companies have not renewed their membership subscriptions until this November.
Association sources said the number of realtors associated with the REHAB now stands at 1,060, including those 103 in limbo.
"As per association rules, if a member does not pay yearly subscription by June, automatically the company's membership becomes vacant," former Vice-President (Admin) of REHAB Sardar Md. Amin told The Financial Express.
He said by the latest count, basically the number of REHAB members now is 957. But there are some others who do business outside the purview of the association.
According to Joint Stock Companies and Firms (JSCF), only 15 companies started up in the business in 2015, while another 2,000 new companies made their entry into the country's real-estate sector in 2011, turning the sector into an overcrowded one.
The number was more than half the total number of companies registered with the government's JSCF last year, with an aggregate paid-up capital worth over Tk 10 billion.
According to the JSCF, 3,669 companies got their clearance from the agency last year with 1,889 registering as real estate and housing firms.
In 2010, the number of newcomers listed with the JSCF was 2,034 -- nearly double the number of start-ups a year before.
This was a year of mad rush into the property business.
Sardar Md Amin said the association had the highest number of members in 2012, totaling 1,300.
"I can say though not all (discontinued members of REHAB) of them but most of them quit their business permanently," he said, terming sluggish trend in the business as the main reason.
Mr Amin said though interest rate on loans has come down to single-digit level in most of the private commercial banks, there is no visible improvement seen in the sector owing to rise in cost of living, high inflation, uncertainty etc.
According to REHAB, there are around 8,000 flats unsold and very few new projects are coming into the sector.
Executive Director of Policy Research Institute Dr Ahsan H Mansur is not surprised about the continuation of sluggish business in the sector.
He said conditions are improving gradually but the sluggish trend will last few more years.
"The flat price was too much inflated during last few years and these huge numbers of members contributed to the bubble," he said.
He thinks 600 to 700 companies are enough on the market.
But Sardar Md Amin said the price is okay. The reason is people's buying capacity has decreased tremendously.
He also thinks if government lends single-digit-interest loan, people will be interested to buy flats. They can't rely on private commercial banks as they may increase their interest rates anytime.
According to REHAB official sources, an apartment in Mirpur, which was selling at Tk 5,000-Tk 6,000 per square foot about five years ago, is now available at Tk 3,500-Tk 4,500,
Similarly, the prices of a flat in Dhanmondi have dropped as low as Tk 10,000 per square foot from the peak of Tk 22,000 four years ago. The prices have also dropped in other areas.
The apartment prices have fallen 20 to 30 per cent over the last couple of years from its peak in 2011-12.