Housing loans are booming


After the outbreak of the coronavirus, the real estate business slowed down, but now the sector is back on track. Not just turning around, but more flats are being sold now than ever before. The demand for loans to buy flats in the capital Dhaka and the divisional cities is higher than ever. As a result, real estate loans are booming. The real estate traders and banks and financial institutions are happy with this.

The happy reason for banks and financial institutions is that now there is less credit in other sectors. And real estate loans are relatively secure. This loan does not default soon. And the flat cannot be fully registered in the name of the customer before repaying the loan. So customers are more aware of debt repayment.

Officials at banks and financial institutions say many of those whose incomes have not been reduced due to the corona, and whose travel expenses have been saved, are buying flats. Because, now the interest on housing loan is relatively low. Again, many people are buying or booking flats in a hurry for fear that the price of flats may go up.

It will be a flat of its own – a big dream for the middle class, employees and businessmen. Banks and financial institutions of the country are now clapping their hands to fulfill their dream. For this, almost everyone has come down to give long term housing loan to the customers. Some institutions are approving the loan within 48 hours of receiving the customer’s application. However, most of the banks and financial institutions know the identity of the customer well and verify the quality of his employer before giving the loan.

After the interest rate became effective at 9 percent in April 2020, the competition between banks and financial institutions to reduce it further began. At the same time, the interest in lending in the housing sector increased. As a result, the interest rate on loans given by most banks and financial institutions has come down to 6.5 percent. However, lately, the trend of raising interest rates has been noticed, but it is limited to 9 percent. Some banks are giving loans themselves but also buying loans from customers of other banks. Since all the processes are completed, the interest is taking a little less in that case. Banks and financial institutions as a whole are emphasizing on disbursement of housing loans, which is creating interest among people of different classes and professions to buy new flats.

According to the information received, IFIC, Dutch-Bangla, Prime, BRAC, The City, Bank Asia, Mutual Trust, Standard Chartered Bank, etc. are among the top banks in disbursement of loans in the real estate sector. Among the financial institutions, Delta BRAC Housing (DBH), IPDC, IDLC, National Housing, LankaBangla are ahead.

When asked, Mominul Islam, managing director (MD) of IPDC Finance, told Prothom Alo: This is because the interest rate is a bit lower. Money has also accumulated in the hands of people. Many are now buying flats for fear of rising prices. As a result, the distribution of loans has increased. In the last two years alone, we have disbursed loans of around Tk 2.5 billion.

Mominul Islam further said, “We have set a target of lending Tk 60 crore per month in Dhaka and Chittagong next year and Tk 30 crore beyond that. If it succeeds, our debt in this sector will reach two thousand crore rupees.

The private sector IFIC Bank has come up with the first major discussion in the country by reducing the interest rates on housing loans. In early 2015, the bank reduced interest rates on home loans from 11.95 per cent to 9.99 per cent in December. At that time the interest rate in the banking sector was above 15 percent.

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