Bangladesh’s housing sector is facing one of its worst downturns in over a decade, as political instability and prolonged economic unrest have driven away both new buyers and investors. Sales of flats-from high-end luxury apartments to budget-friendly units-have plummeted in the past year, with industry insiders warning that the crisis is spilling over into related industries such as steel and cement. According to leading developers, sales of luxury flats in Dhaka’s upscale neighbourhoods have dropped by 80% compared to last year. Mid-range flats have seen a 40-50% decline in sales, while even low-cost housing projects have suffered a 20-30% drop.
Many customers who had previously booked flats or commercial spaces are now struggling to make installment payments, leaving small and medium-sized developers in severe financial distress. Several companies are reportedly unable to sell units even after offering price cuts.
Industry veterans note that in the past decade, the main buyers of urban flats were government officials, doctors, lawyers, university faculty members, and corporate executives. However, the change in the political scene in August 2024 has altered the buyer landscape. The uncertainty has made people wary of making long-term commitments such as purchasing property, leading to widespread hesitation in closing deals.
One senior housing company executive told Prothom Alo, “Even clients who were ready to buy are now saying they will ‘wait and see’ until the situation stabilises. This is freezing the market.” 
The slowdown in housing has had a direct impact on industries that depend on it, particularly steel manufacturing. According to Bangladesh Trading Corporation (TCB), the price of 60-grade MS rod-the most widely used construction steel-has fallen by 12% over the past year, currently trading between Tk 85,000 and Tk 89,000 per ton. This is not only a sharp drop from mid-2024’s Tk 100,000 per ton, but also lower than March 2022 levels.
Bangladesh Steel Manufacturers Association (BSMA) data shows that before the political upheaval, the country consumed 6.5 lakh tons of rod per month. That figure has now plunged to 4 lakh tons, a 35% decline in demand. On July 27 alone, the price of rod dropped by 9% within minutes, an unprecedented fall that has alarmed industry players. “It has become almost impossible to do business in such a volatile market. Many small mills have already halted production because of pressure from bank loans and rising production costs,” said BSMA Secretary General Sumon Chowdhury.
The liquidity crunch in the housing sector is squeezing small and medium developers the hardest. Many had borrowed heavily to finance projects, expecting steady sales to cover repayments. But with sales collapsing, they are now struggling to service bank loans, leading to stalled construction sites across Dhaka and other major cities. The crisis has also impacted employment, with construction companies reducing their workforce and delaying new hiring. This slowdown in one of the country’s largest job-creating sectors is adding further strain to the already fragile economy.
Real estate analysts and business leaders agree that unless political stability, accessible financing, and a business-friendly investment climate return, the housing crisis will deepen. High interest rates and tight bank lending policies are further discouraging buyers who rely on home loans.
“What we’re seeing is a chain reaction,” said a senior urban economist. “When people lose confidence in the economy, they stop buying property. That hurts developers, which in turn affects steel, cement, tiles, furniture, and a range of service providers. The housing sector is interconnected with dozens of other industries.”
For the country’s aspiring middle class, owning an apartment has long been seen as a key milestone. But with the market in turmoil, the dream is slipping further out of reach for many families. Developers are now focusing on damage control rather than launching new projects. Unless confidence returns and sales pick up, the once-booming housing sector-a major driver of urban growth-could remain in recession well into 2026.