Rising Rents Squeeze Dhaka Tenants as Demand Surges

The property market in Dhaka continues to navigate a period of significant pressure, as the convergence of supply constraints and rising construction costs alters the dynamics for both property owners and those seeking housing. With annual demand for housing currently estimated at 120,000 units, and a substantial 40% of that demand remaining unfulfilled, the market remains characterized by persistent scarcity, according to data from Starpath Holdings.

The Impact of Construction and Market Growth

For landlords, the climate is one of sustained capital appreciation. According to market insights, Dhaka's property market is forecast to grow by approximately 6% in 2026, with long-term projections suggesting annual growth could reach 7-8% by 2030. These figures are underscored by the rising costs of development. Reports indicate that construction costs have climbed by 30-40% over the last five years. This elevation in development expenditure is pushing new property prices upward, a trend expected to contribute to further price hikes throughout the remainder of 2026.

Zone-Specific Trends for Residents

Market performance varies significantly depending on location, creating distinct realities for tenants and investors across the capital. In prime residential zones such as Gulshan, Banani, and Baridhara, property prices have shown a degree of stabilization, currently ranging between BDT 18,000-28,000 per sq ft. These established areas remain highly sought after, though they are seeing different growth patterns compared to the rest of the city.

Conversely, upper-mid zones like Dhanmondi, Uttara, and Bashundhara are experiencing some of the strongest activity in 2026, with annual appreciation rates noted at 10-14%. Meanwhile, those looking toward the outskirts of the city will find that peri-urban corridors in high-demand areas are seeing a 12-18% growth rate. This peri-urban expansion is notably outpacing the 7-10% average land price growth observed nationwide.

Navigating Future Housing Conditions

For tenants, the primary challenge remains the scarcity of inventory, which continues to drive long-term price appreciation regardless of affordability hurdles. As the market moves forward, participants are closely watching how the gap between supply and demand influences rental negotiations. While the national average for land price growth sits in the single digits, the accelerated growth in specific urban and peri-urban sectors suggests that residents may continue to face sustained upward pressure on housing costs in the near term.

Produced with AI assistance and reviewed against our editorial standards. Sources are linked where available. Spotted an error or need a correction? Contact [email protected].

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.