Increased demand due to metrorail pushes up Mirpur apartment prices

In 2021, Sufia Begum purchased a flat of the Nova Holdings in the Pallabi area for Tk5,500 per square foot. Fast forward one and a half years, when she referred a relative, considering a move to Pallabi, to the same real estate developer, the company demanded Tk7,500 per square foot as apartment demand has risen in the area after the opening of the metro rail.

"I am simply astonished that the price has risen by Tk2,000 per square foot in less than two years," said Sufia Begum.

According to online property marketplace Bproperty, apartment demand in Mirpur has increased by 24% and rent increased by 27% while prices have risen by 8.6% on average as the opening of the metro rail which offers improved connectivity is drawing a good number of people looking to settle in a developed neighbourhood.

However, the rise in apartment prices is also due to the higher costs of building materials that has forced real estate companies to increase prices to remain profitable.

Yemad Fayed Ahmed, deputy manager (Public Relations) at Bproperty, said that the demand for apartments in Mirpur is currently the highest in Dhaka. He added that these figures are based on a comparison of the data from 2020.

According to the Managing Director of Nova Holdings Ltd, Md Shahidul Islam, the price points have shifted up mainly due to the rise in building material costs and the opening of the metro rail.

"A building requires over 200 types of materials, and the cost of everything has gone up. So, we had no choice but to increase prices by 10%," he explained.

Then the opening of the metro rail caused the demand for flats in the Mirpur area to increase significantly, leading to most of the projects being sold out – contributing to further rise in prices.

Mohammad Farhaduzzaman, general manager of Eastern Housing, said that Mirpur has been a highly sought-after area for a long time due to lower apartment prices compared to many other parts of the city. The emergence of Pallabi as a posh area has further increased demand for apartments in Mirpur. Then the opening of the metrorail accelerated the demand even more.

He said the demand for apartments in Mirpur has increased by at least 3-5% due to these factors.

He added that all of the demands can be met, as there is enough supply with many companies, including the giants of the sector running or having completed projects in the area. Despite the rise in demand and price, it may not be within the affordability range of all people.

However, the demand for land has not increased accordingly, Shahidul of Nova Holdings said replying to a query.

"This is because the new Detailed Area Plan (DAP) has restricted construction of buildings higher than five-storeys, which makes it infeasible for real estate companies to invest in the area. This has resulted in a fall in land demand and a rise in apartment prices," he explained.

The increased demand for apartments has also impacted the rental market in Mirpur. The owners of newly built houses are now asking for higher rent, citing the high construction cost and the increased demand for housing in the area.

Though it has turned out to be a boon for apartments and rental housing in Mirpur, it has become difficult for many people to afford a home in the area. Despite the availability of many real estate projects, the rise in prices has made it difficult for many to invest in the area. The overall impact of the metro rail on the real estate market in Mirpur has been positive, but it certainly also highlights the need for affordable housing options in the area.