The growth in outstanding housing loans in Bangladesh slowed to 7.51% in the 2023–24 fiscal year, down from 12.61% a year earlier, reflecting a cautious lending environment, according to Bangladesh Bank data.

Despite the deceleration, total housing loans rose to Tk 1.283 trillion by the end of June 2024, primarily driven by private commercial banks (PCBs), which held Tk 734.2 billion—up from Tk 681.5 billion in FY23.

State-owned commercial banks followed with Tk 320.7 billion, while specialised housing finance institutions, including the Bangladesh House Building Finance Corporation (BHBFC), contributed a combined Tk 149.1 billion. BHBFC alone accounted for Tk 48 billion.

The figures suggest a steady demand for home ownership in urban and semi-urban areas, though experts say housing loans still represent a small portion of total private sector credit.

Liakat Ali Bhuiyan of the Real Estate and Housing Association of Bangladesh (REHAB) attributed the loan growth to improved disbursement and easier access. However, he warned that the Detailed Area Plan (DAP) introduced in 2022 is holding back the sector by restricting building heights, discouraging landowners, and stalling over 200 connected industries.

Dr Masrur Reaz of Policy Exchange Bangladesh said the slower growth points to “structural and market constraints” that require policy attention to unlock further potential in housing finance.