The demand for second-hand apartments is growing in the country, thanks to upward movement in land and construction material prices.

Industry insiders said the demand has gone up as old flats are cheaper than new ones. Besides, second-hand flats offer more facilities, including gas services, ready-to-use utilities as well as interiors.

They also said the property market has been flourishing over the last two years since the Covid-19 pandemic struck the country.

Besides, legalization of undisclosed money and bank loan opportunity at low interest for government officials has also contributed to the rising demand.

Realtors think the demand for the old apartments will further go up if the Detailed Area Plan (DAP) is implemented. As new flats have to comply with the instruction of the DAP it will double the prices prompting a section of people to buy old flats and commercial spaces. Middle and upper middle class people key buyers of second-hand flats

Talking to The FP, Bproperty CEO Mark Nosworthy has recently said Bproperty has shifted its core focus on the second-hand property market because of immense demand by middle and upper middle income groups as it’s typically cheaper than newly developed or primary apartments, presenting an opportunity to them to become house owners.

“This in part could be seen during the Covid-19 lockdown period of two years and it is a trend that is continuously developing. Taking into account the last five years, we have seen 38-40 percent growth of this trend in the medium-sized apartment segment,” he added.

Mark also adds that more recently, raw material prices have skyrocketed impacting the final prices of new properties. Furthermore, Russia-Ukraine war created a big negative impact on supply chains and different products.These have definitely helped the demand grow for the second-hand property market that Bproperty is observing.

However, for second-hand properties alone, we receive well over 35,000 enquiries every month. Of them, many are curious people trying to figure out what the market has to offer them and ‘our experts show them the best routes to take’, he added. “We are currently

selling, on average, around 80-100 second-hand apartments per month. We have hundreds more in rental transactions and property related dealings in the form of interior projects and mortgage or legal services,” he informed.

He said a major factor that helped compensate for the slowdown caused by the lockdown periods was the government’s provision of allowing the investment of untaxed money into the real estate scene. This saw an investment of Tk3, 200 crores into the market.

Adding to that incentive, interest rates of home loans by banks were capped at 9 percent along with the reduction of land transfer taxes from 2 percent to 1 percent and stamp duty fees from 3 percent to 1.5 percent, he added. Nearly 30 percent clients are non-resident Bangladeshi (NRB)

Moazzem Bepary from Shariatpur narrated that he had recently purchased an old apartment of 1000 square feet at Tk41 lakh in Mirpur area of the city.

“I used to work in Saudi Arabia over a decade. My family members are living in village but our daughters are in problem as they are studying here in Dhaka to acquire higher education. So, I purchased an apartment here,” he added.

Talking to the FP, Deputy Managing Director (DMD) of Ratul Properties Ltd, sister concern of Rupayan Group, Md. Alinur Rahman said the demand for second-hand apartment is high to middle and upper middle income people.

Around 30 percent of our clients are non-resident Bangladeshis. The recent hiked construction material prices created a negative impact on building new apartments. So, many people now look for second-hand flats, he added.

Alinur informed that a client can purchase old apartment at 20-30 percent less price compared to a new ones. Many clients look for old flats at Bashundhara, Uttara and Banani area of the capital.

“However, we have received good response from clients since 2020.We have transacted 50 units in the last four months this year. Our property transaction was 150 units in 2021 which was 100 in 2020.” he further said. He added that there are approximately 50 companies who have government licenses. Nearly 100 anonymous companies are engaged in the market.

Now the annual market size is around Tk1200 crore which was nearly 900 crore in 2019 in the country. Of them, Ratul properties market share is 20-25 percent. However, second-hand market growth is 10-15 percent,” Alinur noted.

He said they generally transact 10-15 years of old apartments. “As, a flat normally lasts over 100 years, the apartment of 10-15 years is not risky. Gas services, ready-to-use utilities, interiors of old flats attract buyers

Vice-President of Real Estate & Housing Association of Bangladesh (REHAB) Lion Sharif Ali Khan said if apartments are built as per the current DAP rules,the prices of new apartment will be almost double encouraging people to buy old flats.

Generally, now Tk1 crore is needed to purchase a new apartment. Besides, the client’s expenditure will further increase by Tk8-10 lakh for completing registration and other costs. Therefore, people will be encouraged more to buy old flat instead of new ones, he also said.