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Covid brings Sylhet’s housing sector to grinding halt

Sylhet’s housing sector crisis began when the income of expatriates in Europe declined and third generation Bangladeshi expatriates lost interest in investing in the sector, according to businessmen

A large real estate company, Royal Homes, has built a residential project named Royal City in the South Surma area of Sylhet. But, business at the firm has come to a standstill since the start of the Covid-19 pandemic. Buyers are not paying the installments of the plots sold earlier.

Foysal Ahmed Chowdhury, chairman of the company, said, “For eight months, there have been no sales. We are not even getting the old installments. It seems that this situation will continue for a long time.”

Abdul Jabbar Jalil, chairman of Ananda Tower in Zindabazar of Sylhet city, echoing this, said though the business has remained closed for several months, they have to repay the bank loan.

“We are now on the verge of bankruptcy,” he said.

Almost all the real estate businesspeople in Sylhet have expressed the same fear. Many of them are considering winding up their businesses in the face of continuous losses.

The managing director of a housing project in Sylhet’s Sadar upazila said, seeking anonymity, that the housing sector in Sylhet had been in a recession for a long time. Land prices have been reduced to half, and there are no sales of flats and plots.

“In this circumstance, we have to pay the bank loans and interest. Somehow I have survived. But, now it will not be possible to survive any longer after the Covid-19 pandemic. We are thinking of winding up our businesses,” he said.

According to the Sylhet Apartment and Real Estate Group (SAREG), an association of housing companies in Sylhet, the organisation had 110 members in 2010.

However, due to the global recession, more than half of the companies have already closed down their businesses.

The association now has about 50 members.

Its leaders said many more companies will shut down this year due to the losses caused by the pandemic.

Shafiul Alam Chowdhury Nadel, president of SAREG, said, “The customers of Sylhet’s housing sector are mostly expatriates, especially UK [United Kingdom] expatriates. They are suffering the most due to the Covid-19 pandemic. As a result, our new sales have stopped.”

“Even those who bought plots or flats before are not paying the installments. If this situation continues, many real estate companies will close. The remainder will not be able to hand over their plots on time,” he added.

Depending on the UK expatriates, more than a hundred real estate companies were established in Sylhet towards the beginning of this century. There were a lot of investments by the expatriates in the sector.

However, the global recession hit the housing sector in Sylhet first. The expatriate investors stopped investing and buying new flats and plots.  As a result, the housing sector in Sylhet has been limping for more than half a decade, and now the novel coronavirus has hit the last nail in its coffin.

The crisis in the housing sector in Sylhet began due to the declining income of the expatriates in Europe, including in England, and the lack of interest by the third generation of Bangladeshi expatriates, according to the businessmen.

After the first wave of the pandemic, the second phase of the novel coronavirus infection is now underway in the UK. The lockdown has begun. The country is in turmoil and expatriates in the UK have also been hit hard by the virus’ continued spread. Many have lost their earning sources. It is assumed that the crisis will continue for a long time.

Therefore, it is uncertain when UK expatriates will be able to invest in Bangladesh, said the real estate businessmen.

Hasin Ahmed, former president of SAREG, said the crisis was exacerbated by Covid-19, but the housing sector in Sylhet had already been in a recession for a long time. He said that despite the investment of several thousand crores of taka, the housing business in Sylhet developed without a plan.

Moreover, many people took out loans in the name of housing and used the money in other sectors, he continued.

Unable to make profits there, they failed to repay the bank loans, he said. These aspects are also contributing to the decline of the real estate business in the region, added Hasin.