The supply of new real estate in Dhaka is expected to decrease further in the coming days as the number of applications for new building plan approvals from Rajdhani Unnayan Kartripakkha (RAJUK) continues to decline.

Stakeholders attribute the drop to the country’s challenging economic situation, rising living costs, political uncertainty, and the impact of the new Detailed Area Plan (DAP) 2022-2035.

According to data from RAJUK, the number of building approval applications fell by almost 50 percent in FY 2023-24 to 4,695, compared to 9,339 in the previous fiscal year. In FY 2020-21, there were 10,812 applications, and the number rose to 11,706 in FY 2021-22 before the recent decline.

The new DAP, which took effect in August 2022, has been identified as a major factor behind the slowdown. The plan imposes restrictions on building height based on plot location and adjacent road width. RAJUK officials report that many landowners are waiting for amendments to the DAP that would allow for more floor area ratio (FAR) in new constructions.

Real Estate & Housing Association of Bangladesh (REHAB) Senior Vice-President Liakat Ali Bhuiyan said, “The new DAP is solely responsible for the decline. Unless the DAP is amended, it will create a huge impact on housing supply in the capital city.”

REHAB Vice-President Abdul Latif warned that the long-term effects of the declining trend would become more visible in the coming years. He noted that only a small number of applications for new buildings are being submitted for central Dhaka, with peripheral areas remaining less popular due to a lack of facilities.

The slowdown in real estate activity is expected to impact various sectors linked to construction, including home loan providers and material suppliers. “The sluggishness in the real estate sector will affect not only affordable housing but also the overall economy,” said Mr. Latif.

Urban planner Dr. Adil Mohammed Khan emphasized the importance of prioritizing peripheral areas like Purbachal and Uttara to ease pressure on central Dhaka. “If you continue to build more structures in a city like Dhaka, its situation will be exacerbated,” he said.

Dr. Khan also warned against undue influence in amending the DAP, stressing the need to uphold proper urban planning to secure the city’s future. “It is imperative to follow urban planning guidelines to ensure sustainable development,” he added.