Best Time to Buy Home in Dhaka
The housing industry in Dhaka is always in motion. The industry does stable business throughout the year. However, the price of the property often fluctuates with time. As a buyer, it is important to keep a close eye on the market to find the best house at the cheapest rate. While no one can predict the housing market industry with 100% accuracy, if we plan and approach carefully, we may find optimum deals. To understand the best time to buy a home in Dhaka, we need to keep a close eye on a few indicators that affect the housing market.
Demand & Supply
The basic rule of the economy states that when the supply is higher, the price will go down. The same applies in the housing market industry as well. To find the best time to buy a home, we need to figure out when the market has an abundance of properties that are ready to sell. Usually, August and September are the months when the housing industry faces a surplus in the market. Hence, the period of August to September is the best time to buy a home in Dhaka. It is important to note that if the demand for houses also rises during this period, the price will not go down.
Interest rate is a crucial factor in the housing market. A large chunk of the buyers takes home loans to buy their first home in Dhaka. Hence, the interest rate has an inverse relation with the price of the housing market. For example, when the bank interest rate for home loans goes down, more people become willing to buy home. Consequently, they start taking a loan at a lower interest to book their home. However, as more and more people want to buy houses, the demand for houses rises. As the demand for houses rises, the price of the houses also begins to soar.
So, when we take the interest rate into consideration, both high and low-interest rate benefits the different class of buyers. To further elaborate, if the buyer wants to buy a home in Dhaka with his or her own fund, the high-interest rate will benefit him. Since, with a high-interest rate, the number of people willing to buy a home with a home loan will decrease, and the demand for houses will decrease as well. The decreased demand will pull down the price, and the buyer will find a home at a lower rate. On the contrary, if the buyer is willing to buy a home with a home loan, he or she should take a close eye on the bank interest rate. As the interest rate fluctuates very often, regular scanning is necessary. It is important to lock the deal immediately after the drop in the interest rate. Otherwise, the interest will go up again with increased demand for a home loan which was generated from the earlier drop in interest rate.
The Health of the Economy
The housing market is directly related to a country’s economy. If the country’s economy is flourishing, the housing market will become vibrant as well. Hence, the buyers must be aware of these factors. The economic growth of the country will positively affect the housing market. For example, if the economy of Bangladesh substantially grows in the coming years, it will mean more and more people are gaining more purchase power. As more people obtain purchase power, more people will want to buy a house. Then, the demand for houses will increase. As per the rules, with increased demand, the price of the houses will also increase. The opposite will occur during the time of recession. When the country is not doing financially well and the economic growth is declining, it will stop the housing market from blooming. Rather, during a period of recession, the housing market industry usually suffers greatly. Because when the economy is in decline, people are losing their purchase power. As the people lose buying power, the demand for houses drastically goes down. As the demand goes down, the prices for the property fall as well. Hence, if the buyer has funds available, the period of recession is the best time to buy a flat in Dhaka.
Condition of the Real Estate Industry
The real estate industry controls the housing market. The overall condition of the real estate industry will tell dictate the future of the housing market as well. As a buyer, it is important to notice how many players are in the market that are selling houses. The more the number, the better for a buyer. If the industry has lots of players competing against one another, the buyer will enjoy a competitive price. On the contrary, if the market has a few players in the industry, it is usually bad news for the buyers. Because, with fewer competitors in the industry, the real estate companies will not feel any pressure to lower their prices. Rather they are likely to create a syndicate and fix a price that will only benefit them.
So, for buyers, it is essential that the industry has lots of competitors in the market. It will not only bring down the cost for the buyer but will also give the buyers ample options to choose from. Currently, the housing market in Bangladesh is booming. Since 2015 the number of real estate companies has grown substantially. According to REHAB (Real Estate & Housing Association of Bangladesh), there are 941 listed real estate companies in Bangladesh. Over 900 real estate companies are operating in Dhaka. This indicates that the housing market of Dhaka is highly competitive. A competitive market will set a competitive price for the buyers as well. Hence, the buyers of homes in Dhaka are likely to enjoy a competitive price for their preferred houses in the current market.
The Best Time to Buy a Home in Dhaka Depends on The Buyer
The economic indicators such as interest rate, country’s growth, and industry’s growth impact the housing market industry and move the prices of the houses in the industry. However, these indicators may not be helpful to everyone. To buy a home is a very expensive decision. More importantly, it is an individual decision. Meaning the right time will greatly depend on the financial ability of the buyer. When you, as a buyer, are in a sound financial condition, that is the best time for you to buy a home in Dhaka. Here’s how you can realize you have the financial strength to purchase a home:
It is never a good idea to purchase a home when you are carrying the burden of debt. Before purchasing a home, you should clear all your previous debt. If you are willing to take a home loan, the existing loan will drastically lower your chances to get the loan. Even if you obtain a home loan, the bank will charge a much higher interest rate. Hence, it is always better to clear out your debt before purchasing a home.
Whether you take a home loan or buy a book a house with an installment payment clause, you must pay the down payment. If you are taking a home loan, the bank will only give you a loan up to 80% of the total price of the house. The rest, 20%, is what you have to pay as a down payment. It is important to save enough funds to pay off the down payment for the house. If you have a larger fund, you can pay off the larger chunk of the price with your own money. It will bring down the loan cost, and you will have to bear the interest payment for a shorter period of time. The fund is also necessary to register the house in your name. The registration process is very expensive in Bangladesh, and the bank will not cover it with a loan.
Your income is another crucial factor determining your financial stability. Your monthly mortgage payment must not be more than 20% of your monthly income. Living in Dhaka is already very expensive. You must manage your income carefully so that you can live your normal life while paying the mortgages each month. The bank will take this into account. If you apply for a home loan for a house that will cost more than 20% of your income in monthly mortgages, the bank will not approve your loan.
If you are willing to buy a home in Dhaka, your future goals should include living in Dhaka for a great amount of time. Because, after expending such a great amount of money on the property, if you are not planning on living in that house for many years, the purchase will not add any value. Hence, before buying the property, the buyer must thoroughly think about his or her future After thoroughly considering these personal factors, a buyer may realize whether or not he or she is ready for purchasing a home in Dhaka.
A buyer can determine the best time to buy a home in Dhaka by analyzing certain economic and personal factors. While the economy plays a great role in determining the price of the houses, the ultimate ability to purchase the house solely depends upon the buyer. Only when there is a synergy between both the economic and personal factors the buyer will figure out the best time to buy a home in Dhaka.
How can I know when the home loan interest rate drops?
Ans: There are certain websites that track the movement of the interest rates of our country. These websites may help you. You can also check the bank’s website regularly to check any fluctuations in the interest rate.
How can I know which real estate company offers the best price?
Ans: You have to contact different real estate companies to learn about their price points and compare them yourself. You may also appoint a real estate agent who will help you to find the best price in the market. Currently, Mir Real Estate is offering the most competitive price for its buyers.
How Can I realize that the country’s economy is booming?
Ans: There are few economic indicators to determine a country’s economic growth. These indicators are GDP (Gross Domestic Product), GNP (Gross National Product), and GNI (Gross National Income).
At what age one should buy a home?
Ans: If you are 18 years old, you are legally eligible to purchase a home. However, when it comes to buying a home, financial stability is more important than age. Once you are financially stable enough to carry the cost of buying a home, you can purchase your dream home.
How to pick the right real estate company among numerous names in the market?
Ans: The best real estate companies comply with all the government regulations, uphold all the agreements of the deals, and provide customer satisfaction. Mir Real Estate has been maintaining all these criteria and established itself as one of the most esteemed real estate companies in Bangladesh.