Dhaka Renters Spend Over 30% Income On Housing Costs

In Dhaka, nearly 40% of renters spend more than 30% of their income on housing, according to a recent survey by the Bangladesh Bureau of Statistics. This exceeds the commonly cited threshold for affordable housing, prompting concerns about the sustainability of the city's rental market.

The issue of rent affordability matters now because Dhaka's real estate market is booming, with prices rising rapidly in popular neighborhoods like Gulshan, Banani, and Dhanmondi. As the city's economy grows, more people are moving to Dhaka for work, driving up demand for housing and pushing prices higher. However, wages are not rising at the same pace, leaving many renters struggling to make ends meet. The 30% rule, which suggests that housing costs should not exceed 30% of income, is a widely accepted benchmark for affordability, but it's clear that many Dhaka residents are exceeding this limit.

In specific neighborhoods, the problem is even more pronounced. For example, a one-bedroom apartment in Gulshan can cost upwards of 25,000 taka per month, while a similar apartment in Dhanmondi might cost around 18,000 taka. Organisations like the Dhaka Chamber of Commerce and Industry and the Bangladesh Real Estate Association are working to address the issue, but so far, progress has been slow. The Dhaka North City Corporation has also launched initiatives to increase the supply of affordable housing, including a program to build 10,000 new apartments in the next two years, but it remains to be seen whether these efforts will be enough to meet the demand.

Affordability In Numbers

According to data from the Bangladesh Bank, the average monthly rent for a one-bedroom apartment in Dhaka is around 20,000 taka. However, the average monthly income for a Dhaka resident is only around 35,000 taka, according to a survey by the Bangladesh Institute of Development Studies. This means that many renters are spending more than 50% of their income on housing, far exceeding the 30% threshold. In fact, a report by the World Bank found that in 2022, nearly 60% of Dhaka's renters were spending more than 30% of their income on housing, with some spending as much as 70% or more.

So what happens next? For renters, the key is to carefully consider their budget and prioritize affordability when searching for a place to live. This might mean looking for apartments outside of the most popular neighborhoods or considering shared housing options. For policymakers, the challenge is to increase the supply of affordable housing and implement policies that protect renters from excessive price increases. The Dhaka City Corporation has announced plans to introduce rent control measures in the coming months, which could help to alleviate the pressure on renters. In the meantime, organisations like the Bangladesh National Housing Authority are working to provide affordable housing options for low-income families. As the city continues to grow and develop, finding a solution to the rent affordability crisis will be crucial to ensuring that Dhaka remains a livable and sustainable city for all its residents.