Investment environment, positive growth in property market, the shift to online for the real estate market, growing demand among local and international buyers, high growth – and optimism – these are just some of the developments that are on the cards for frontier real estate markets in 2015, especially in Bangladesh.
Rajesh Grover, Co-Founder & Managing Director, Lamudi Bangladesh said: “Nowadays the younger generation is getting more involved in the decision making process when it comes to property, which will have a significant positive impact on online property search trend in 2015.”
As 2014 draws to a close, global property portal Lamudi looks at five key trends to watch out for in emerging market real estate in the New Year.
1. Investment environment
The real estate and housing sectors contribute between 12 to 15 percent of national GDP, according to the national real estate association. Political unrest in late 2013 has dented the country’s economic condition and this caused lower consumer and investor confidence. But another positive factor is, the foreign direct investment (FDI) inflows increased 24 percent year-on-year to reach $US 1.6 billion.
In a recent survey conducted by Lamudi, real estate agents commented on the investment environment that Economic development is 73% and Infrastructure development is 45%. Dhaka is the world’s most densely populated city with the population of 14.8 million. Gross domestic product (GDP) growth is forecast to 5.6 percent for the 2014 financial year. All these key factors indicate a friendly environment for the consumers to invest in real estate and investor to expand the horizon.
2. Positive growth in property market
The property market has been an important driver of the country’s recent economic growth. Consumers are becoming more educated and conscious in investing in property market. Research shows that the standard of living is rising to 73% in Bangladesh. The customer survey showed a clear trend towards apartment living has emerged in Bangladesh. Nearly 80 percent of visitors to the Lamudi website are looking for apartments to buy or rent. The market is big and demand is high. There is also a gap of quality product in the market. So for the real estate developers this is the time to regain the trust of the consumer and deliver the right product to the right target.
3. Property industries go online
Across the emerging markets, more and more people are switching online every year. But the internet revolution in emerging countries has been different to the digital wave that already swept the developed world. In 2013 there were 33 million Internet users in the country, or about 22 percent of the total population, according to data from the Bangladesh Telecommunication Regulatory Commission (BTRC). Within the real estate sector, the Internet is becoming a popular tool among house-hunters.
Recent Lamudi site data shows that 72 percent house hunters often used Internet for hunting their houses. While online search has been becoming increasingly popular in this region, newspapers and real estate fairs remain popular among agents looking to advertise their properties. The recent study shows that 82% of real estate agents use online medium to advertise their projects. For those working in the real estate industry, this means their focus for 2015 to online and mobile marketing their properties and reaching the maximum number of potential customers.
4. Growing demand among local & international buyers
Bangladesh has a significant growth in middle-class. If the economic growth meets its forecast level then the number of middle class and affluent Bangladeshis is projected to increase by 2020. The impact of this trend cannot be underestimated, as it continues to be felt in 2015. As people have become more affluent, they have also become better educated, more career-minded and have more purchasing power – including within the property market. They buy houses earlier and more often, leading to increasing turnover and demand for property. Lamudi web report shows that around 32 percent of traffic comes from outside the country such as – USA, UK, Saudi Arabia, Singapore, and Malaysia. This also gives an indication of growing demand among international buyers.
5. High growth – and optimism – continues
In a recent online survey conducted by Lamudi, real estate agents across the emerging markets predicted high growth for their national property sectors in the coming year. The factors reliability, safety and security are the main concern for the property buyers. In Bangladesh, more than 80 percent of local property agents surveyed by Lamudi said investment in the property sector had increased over the past five years. According to industry experts the market will get much bigger than what it is at present. The country’s economic development and rising standard of living were the key drivers of this change, according to brokers. The survey also recorded high levels of optimism among property agents, with 55 percent brokers describing their outlook as positive for 2015.
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