Any hope for a turnaround by the sagging real estate business in the near future may not be misplaced if the leverages it has received are taken into consideration. But appearances may be deceptive as well. Here the reduced rate of bank loan on offer for customers, particularly the favourable government terms of 50:50 payment of interests, for about 1.2 employees in public service, is thought to be the driving force behind an expected upswing in housing business. When the allocation of subsidy for payment of interest on the part of the government is as high as 3.0 billion this year alone, it should trigger an accelerated interest in owning a flat or plot among government employees. Then there is a clause in the income tax, added five years ago, allowing people to purchase flats with undisclosed incomes. Clearly there is a definite advantage for those possessing black money to buy flats and who does not know that there are so many such people in this country?
Economic theory is definitive to spot that people invest in housing when the same in other ventures is unprofitable or unsafe. When a government has to take the extraordinary decision to encourage investment in housing, it is not a rosy picture of the economy. Distribution of favour is the other name of this game. Here the interests of the people living or willing to have a permanent shelter in urban areas, particularly in and around the capital, have been the prime concern. Government employees and owners of black money will be favoured disproportionately. What about the middle class people who are actually the backbone of any society? If the middle class is further pushed to the sideline, the social discrimination will leave a yawning chasm.
A report carried in a Bangla contemporary has reviewed the price escalation of lands and flats in the capital over the past 18 years to show how the prices have shot up and to add to the problem in a discriminatory manner. Area-wise price escalation in the capital has been as high as 12 times in posh areas but it has been no less than four times in areas where the rise has been the least. In some of the cities abroad, the authorities plan for construction of cheap flats right beside the palatial housing of the rich so that communities are not divided on the line of rich-poor classes. This is done in order to avoid breakdown of social order and cohesion. Here the discrimination has apparently been encouraged.
Against this archaic housing policy, a real estate boom is unlikely to be there in the offing. Owners of black money are now more interested in 'second homes' than in living in this country. They are familiar with all the legal loopholes and other means to launder money. Many government servants are not lagging far behind. Their sons and daughters are sent abroad for studies and they do not miss the opportunity to help them settle there. Thus a mass exodus of the upper class is taking place. It is mostly the disadvantaged who are staying home and suffering.