Bangladesh’s real estate sector is facing a severe downturn, with booking cancellations surging and default loans rising to nearly 27 per cent. The crisis, triggered by political uncertainty since August 2024 and compounded by rising costs and weak demand, is straining developers and threatening broader economic stability. Developers are facing acute cash flow shortages, leading to stalled construction and mounting loan defaults.

The downturn has been intensified by a roughly 25 per cent rise in construction costs, driven by global conflicts and supply chain disruptions that have pushed up prices of steel, cement and fuel. Higher interest rates and tighter bank financing have further compounded the crisis, creating what industry players describe as a “vicious cycle” of stalled projects and rising debt.