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Real Estate Finance

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Arman Hossain Ab
Arman Hossain Ab

This document analyzes and compares the real estate financing features of 5 major financial institutions in Bangladesh. It finds that Standard Chartered Bank offers the highest maximum loan amounts and loan-to-property value ratios, while Bangladesh House Building Finance Corporation offers the longest loan repayment tenures. The document concludes by recommending steps for Bangladeshi financial institutions and the government to further develop the country's primary and secondary housing finance markets.

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“Features of Real Estate Finance in Bangladesh” -A Study on Five Financial Institutions Presentation : Presented By: MD. ARMAN HOSSAIN A.B. (30006) HAFEZUR RAHMAN (24084)
Sample Financial Institutions that provide Real Estate Financing  Bangladesh House Building Finance Corporation  Delta-Brac Housing Finance Corporation Ltd.  Dhaka Bank Limited  Bank Asia Limited  Standard Chartered Bank of Bangladesh Our Key Focus was on the Comparison of Different Features, Area of Specialization, Terms & Conditions and Recent Performance in the Real Estate Sector of Bangladesh
Comparison of Offered Features and Terms-Conditions BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 2013 2851.8 26603.5 3947.28 193.9 7702.18 2014 5392.5 24689.3 5123.09 284.13 6790.88 2851.8 26603.5 3947.28 193.9 7702.18 5392.5 24689.3 5123.09 284.13 6790.88 0 5000 10000 15000 20000 25000 30000 TakainMillion Comparisons of Housing Loan Sanctioned in 2013-2014
0 20 40 60 80 100 120 BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 20 20 75 120 100 TakainLakh Comparison of Maximum Loan Offer 64% 66% 68% 70% 72% 74% 76% 78% 80% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 70% 80% 70% 70% 80% Percentage Comparison of Loan to Property Value
6% 12% 13.50% 12% 13% 0% 2% 4% 6% 8% 10% 12% 14% 16% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Percentage of Interest Rate Comparison of Minimum Interest Rates of Housing Loan in 2014 0 5 10 15 20 25 30 35 BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 32 30 15 15 25 No. of Years Comparison of Loan Repayment Tenure
0.20% 0.50% 0.50% 1.50% 1.50% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Percentage of Processing Fees Comparison of Loan Processing Fees of Housing Finance Comparison of Loan Processing Fees Comparison of Prepayment Charges Comparison of Actual Recovery
500 1000 3500 2000 3000 0 500 1000 1500 2000 2500 3000 3500 4000 BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Prepayment Charge in TK. Comparison of Prepayment Charge of Housing Finance in 2014 84.22% 89.23% 95.00% 92.00% 98.00% 80.00% 82.00% 84.00% 86.00% 88.00% 90.00% 92.00% 94.00% 96.00% 98.00% 100.00% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Percentage of Loan Recovery Comparison of Actual Recovery of Housing Finance in 2014
Key Suggestions: The banks and non-banking financial institutions can launch ‘Contractual Housing Savings Scheme,’ as suggested by the World Bank in its workshop on ‘housing finance market’. The existing legal, regulatory and taxation frameworks should be facilitating the primary and secondary housing finance market development. Three rates of taxes: lower tax for low-cost housing, moderate tax for semi-luxury apartments and higher tax for luxury apartments have to be introduced. Government should restructure the House Building Finance Corporation, the state-owned mortgage lender, for supporting both public and private housing schemes so that major cities, including capital Dhaka, could be saved from proliferation of slums. The government has to ensure availability of land, major cost of housing beside the construction, and suggested public-private partnership with funds from multilateral lending agencies
Real Estate Finance
Real Estate Finance

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Real Estate Finance

  • 1. “Features of Real Estate Finance in Bangladesh” -A Study on Five Financial Institutions Presentation : Presented By: MD. ARMAN HOSSAIN A.B. (30006) HAFEZUR RAHMAN (24084)
  • 2. Sample Financial Institutions that provide Real Estate Financing  Bangladesh House Building Finance Corporation  Delta-Brac Housing Finance Corporation Ltd.  Dhaka Bank Limited  Bank Asia Limited  Standard Chartered Bank of Bangladesh Our Key Focus was on the Comparison of Different Features, Area of Specialization, Terms & Conditions and Recent Performance in the Real Estate Sector of Bangladesh
  • 3. Comparison of Offered Features and Terms-Conditions BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 2013 2851.8 26603.5 3947.28 193.9 7702.18 2014 5392.5 24689.3 5123.09 284.13 6790.88 2851.8 26603.5 3947.28 193.9 7702.18 5392.5 24689.3 5123.09 284.13 6790.88 0 5000 10000 15000 20000 25000 30000 TakainMillion Comparisons of Housing Loan Sanctioned in 2013-2014
  • 4. 0 20 40 60 80 100 120 BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 20 20 75 120 100 TakainLakh Comparison of Maximum Loan Offer 64% 66% 68% 70% 72% 74% 76% 78% 80% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 70% 80% 70% 70% 80% Percentage Comparison of Loan to Property Value
  • 5. 6% 12% 13.50% 12% 13% 0% 2% 4% 6% 8% 10% 12% 14% 16% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Percentage of Interest Rate Comparison of Minimum Interest Rates of Housing Loan in 2014 0 5 10 15 20 25 30 35 BHBFC DBH Bank Asia Dhaka Bank Standard Chartered 32 30 15 15 25 No. of Years Comparison of Loan Repayment Tenure
  • 6. 0.20% 0.50% 0.50% 1.50% 1.50% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Percentage of Processing Fees Comparison of Loan Processing Fees of Housing Finance Comparison of Loan Processing Fees Comparison of Prepayment Charges Comparison of Actual Recovery
  • 7. 500 1000 3500 2000 3000 0 500 1000 1500 2000 2500 3000 3500 4000 BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Prepayment Charge in TK. Comparison of Prepayment Charge of Housing Finance in 2014 84.22% 89.23% 95.00% 92.00% 98.00% 80.00% 82.00% 84.00% 86.00% 88.00% 90.00% 92.00% 94.00% 96.00% 98.00% 100.00% BHBFC DBH Bank Asia Dhaka Bank Standard Chartered Percentage of Loan Recovery Comparison of Actual Recovery of Housing Finance in 2014
  • 8. Key Suggestions: The banks and non-banking financial institutions can launch ‘Contractual Housing Savings Scheme,’ as suggested by the World Bank in its workshop on ‘housing finance market’. The existing legal, regulatory and taxation frameworks should be facilitating the primary and secondary housing finance market development. Three rates of taxes: lower tax for low-cost housing, moderate tax for semi-luxury apartments and higher tax for luxury apartments have to be introduced. Government should restructure the House Building Finance Corporation, the state-owned mortgage lender, for supporting both public and private housing schemes so that major cities, including capital Dhaka, could be saved from proliferation of slums. The government has to ensure availability of land, major cost of housing beside the construction, and suggested public-private partnership with funds from multilateral lending agencies