Study on the land price of private real estate projects in Dhaka and its association with physical amenities and environmental elements

Abstract

The price of the residential land is associated with several factors such as accessibility and location, size and shape, physical and environmental amenities, topographical and climatic factors, economic and social security, neighbourhood quality, etc. of the residential land. Among all these features, the physical amenities and environmental elements influence the price of the residential land within the project site. Physical and environmental amenities are a set of local attributes. The wide roads, shopping centres, educational institutions, health care centres, recreational centres, religious centres, city and community centres, bus or metro stations, utilities and services etc. are the physical amenities. However, the environmental elements of the residential land are the rivers, lakes, water bodies, parks, playgrounds, urban green and forests, open spaces, farmlands, the orientations of the plots etc. According to the empirical research, these physical and environmental features enhance the residential quality of life and influence the residential land price within the site of the residential area. Consequently, there are some legal guidelines such as “Private Housing Land Development Rule 2004 (amendment 2015)” which have listed a set of criteria to ensure physical and environmental elements in the real estate projects of Bangladesh. Private real estate companies are developing residential projects besides government agencies in the Dhaka Metropolitan Development Plan area. A wide range of price categories (lakh per Katha) has been found in these private residential projects. However, there is a little variation of plot prices in public residential projects though these projects are also provided with adequate environmental and physical amenities. This research studied the land price in private residential projects and investigated the association of physical and environmental amenities on land prices within the site of private residential projects in Dhaka. This research also compared the land price variations in public residential projects with private residential projects based on the environmental and physical attributes. Out of several large residential projects from the eastern part of the Dhaka Metropolitan Development Plan area, private residential projects ‘Shornali Abashon’, ‘Sun-valley Abashon’ and ‘Malum City’ have been selected as the study projects and Sector-15 of ‘Purbachal New Town’ have been studied as public residential projects. Secondary data have been used in this study. The samples from the study projects are selected at 95% confidence interval and 5% margin of error plots. As sample 246, 239 and 247 numbers of residential plots are selected from Shornali Abashon, Sun-valley Abashon and Malum City projects respectively. Every third plot of the study projects have been selected as sample plots in this research. Secondary data such as list of plot prices as well as the site maps of the study projects have been collected from the projects offices. A database has been prepared with data of each plot price. The maps have been digitized. From the digitized maps the shortest distance in meters between the residential plots and the environmental as well as physical attributes were documented. In this research, descriptive statistics, Correlation analysis, ANOVA (Tukey HSD), and Regression analysis have been conducted. It has been found from the study that the plot price (lakh per Katha) of private residential projects are influenced by environmental and physical attributes, which makes a wide range of categories of residential plots prices within the project sites. The most significant physical attributes on residential land price are the width of the access road, distance from the school, distance from the market. Furthermore, the environmental attributes which are strongly associated with residential land price are the corner plot, distance from the lake, river, playground, and park. On other hand, it has been found that the residential land prices in public projects do not have any linkage with the environmental and physical attributes. There is a flat price for all types of plots in the public residential projects. This research also explained that the price of public residential projects can be increased if the environmental and physical attributes are considered in fixation of the plot price. This research has recommended that real estate companies are supposed to provide better physical and environmental amenities as they calculate and get the economic benefits of the services and amenities through the pricing of land. However, this research also recommended public agencies to incorporate the physical and environmental amenities in residential projects and include the value of these environmental and physical amenities in pricing the residential plots. This will ensure proper justification in residential plot pricing and plot allocation procedure.