Bangladesh’s real estate sector is facing one of its deepest downturns in recent years, driven by a wave of booking cancellations, rising construction costs, and mounting financial pressure on developers.
Industry insiders say the crisis intensified following the political shift on 5 August 2024, which triggered a sharp decline in investor confidence. Many high-net-worth buyers either left the country or adopted a cautious “wait-and-see” approach, disrupting the advance-payment model that developers heavily rely on.
At the same time, global instability—including the Russia-Ukraine and Middle East conflicts—has pushed up the cost of key construction materials such as steel, cement, and fuel, further squeezing the sector.
Defaults Surge, Sales Collapse
According to central bank data, default loans in the real estate sector surged to 26.70% in 2025, a dramatic increase from around 8% in 2022, reflecting growing financial distress among developers.
Apartment sales have also dropped sharply. Industry estimates suggest that sales declined by 30–35% in 2024, with conditions worsening further in 2025.
- Mid-range apartment bookings in Dhaka fell by 20–25% year-on-year
- Luxury segment sales plunged by up to 50%
- Monthly sales dropped from 5–8 units to just 1–2 units
“Only those with urgent needs are buying now. Most people are holding back due to economic and political uncertainty,”
— Mezba Uddin Maruf, Director, Green Hat Real Estate
His company currently has over 30 ongoing projects with around 200 unsold apartments, highlighting the broader slowdown.
Smaller Developers Under Severe Pressure
The downturn has hit smaller developers the hardest, many of whom are struggling to sustain operations amid falling revenues and rising costs.
“Our Rampura project is in trouble. Buyers who booked flats are not paying instalments, and we are unable to attract new customers,”
“We have already exhausted our capital just to keep operations running.”
— Mohammad Ayub Ali, Chairman, Oishi Properties
A senior official at JCX Developments said about 10% of booked clients disappeared after the political transition, forcing project suspensions.
At Sheltech, 25% of bookings have been cancelled since August, while new sales dropped by 15–18%.
Costs Soar, Financing Tightens
Construction costs have risen by around 25%, driven by higher prices of raw materials and regulatory changes.
- Cement prices increased to Tk520–550 per bag
- Rod prices climbed to Tk105,000–108,000 per tonne (from below Tk80,000)
- MS rod prices rose by Tk20,000 per tonne in just two months
“Steel and cement prices have increased sharply due to global instability… developers are forced to rely on the spot market at higher costs,”
— Tanvir Ahmed, Managing Director, Sheltech
Access to financing has also become more difficult as interest rates rise.
“Developers have taken large loans, but projects are now stalled midway. Interest costs are mounting, creating a vicious cycle.”
— Senior industry executive
Mixed Signals from Larger Firms
Despite the overall downturn, some larger and compliant firms are showing limited resilience.
“Our sales have improved somewhat since the beginning of the year, and none of our projects is currently stalled,”
— Sabbir Hossain Khan, CEO, Rupayan Asset Limited
However, he noted that raw material prices remain high, and the recovery is still fragile.
Risk of Future Housing Shortage
Developers warn that the sharp decline in new project launches could create a future housing supply shortage once the market stabilizes.
“Many investors and buyers are holding back. New project launches have declined, which may create a supply shortage later,”
— Mamunur Rashid, Managing Director, NZAC Design and Development
Wider Economic Impact
The real estate sector contributes about 8% to Bangladesh’s GDP and supports approximately 3.5 million jobs, with linkages to over 250 industries.
The slowdown is already creating ripple effects:
- Steel manufacturers reported losses of around Tk3,500 crore in three months
- Nearly 90% of cement factories are operating below capacity or have halted production
Calls for Urgent Policy Support
Industry leaders are urging immediate government intervention to stabilize the sector.
Liakat Ali Bhuan, Vice-President of REHAB, called for a Tk3,000 crore special fund to help developers complete ongoing projects.
Stakeholders also recommended:
- Low-interest, long-term housing loans
- Simplified loan approval processes
- Allowing investment of undisclosed money to boost short-term demand
With cancellations rising, costs surging, and financing tightening, the sector now faces a prolonged period of uncertainty—one that could reshape Bangladesh’s housing market and its broader economy.
