Reading time: 5 minutes, Category: Finance & Economics
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Disclaimer: This article is provided for general information purposes only, does not consider your objectives, financial situation or needs and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.
Bangladesh is one of the best kept secrets of the emerging world. With a growing population and high GDP growth, it is worth considering investing assets in Bangladesh. However, for an investor the age-old question remains, should they invest in shares or real estate in Bangladesh.
The Case for Investing Shares in Bangladesh
Let’s start with explaining what shares are firstly. Simply put, shares are units of ownership in a company. Shares are listed and traded on public exchanges like the Dhaka Stock Exchange. Household names in Bangladesh like BRAC Bank, Grameen Phone and Bata are publicly listed on the stock exchange. This means that you can buy and sell shares of these companies through a broker who executes the buying and selling of shares.
Investors typically buy shares for capital growth (rise in share price due to the company’s positive financial performance) and to collect dividend payments, which are paid out to shareholders from the company’s earnings and can be paid in cash or reinvested in the same company.
Shares are a popular type of investment because they are very accessible, especially with the emergence of online brokerage companies where trading shares are seamless. There is also not a significant minimum investment required when purchasing shares unlike property, which usually requires a large sum of money to start with.
The other benefit of shares is that they provide investors with access to liquidity, or in other words the ability to turn shares into cash (and vice versa) relatively fast compared to other financial assets like property. Shares can be generally bought and sold in a matter of minutes through given most transactions happen electronically.
However, the biggest challenge when investing in shares is dealing with price volatility (i.e. the frequent fluctuation in the movement of the share price), which can go up and down very frequently and fast is very difficult to predict future short-term prices especially during unforeseen company news, economic and geopolitical events.
Picture of the Dhaka Stock Exchange located in Motijheel.
The Case for Investing in BD Property
what is a good average return on investment? Investing real estate in Bangladesh, on the other hand, provides investors less volatility and a sense of security and ownership in a physical and tangible asset that they can touch, feel, live in or rent out. Real estate in Bangladesh has also proven to be a good performing asset class with capital growth and income from rent.
what is a good average return on investment? Investing real estate in Bangladesh, particularly in the main cities like Dhaka and Chittagong can be a lucrative investment opportunity for those who are interested to accumulate and diversify their wealth.
For example, the average price of a house in Dhaka has increased by 5% over the past year. This is largely due to the growing demand for housing in the city, as more and more people are moving to Dhaka for work or study. As a result, house prices in Dhaka are expected to continue to rise in the future.
A metropolitan city like Dhaka is a popular destination for tourists, with its many historical and cultural landmarks. The city is also a very attractive place to live, with a low cost of living and a wide range of housing options. Lastly, an increase in population size has led to a demand for more housing, which has caused the cost of real estate to go up.
All these factors combined, there are very strong and compelling reasons to consider investing real estate in Bangladesh. However, it can be tricky to navigate issues like registration, loans and taxes which is why you should consider contacting us to arrange an initial complimentary meeting with our property consultants to start your real estate journey.
The Bottom Line – Shares or BD Property?
At the end of the day, the decision to invest in shares or real estate in Bangladesh is a personal one, which depends on your personal financial situation, risk profile and objectives.
what is a good average return on investment? Shares and real estate in Bangladesh have different risks and opportunities. Real estate is not as liquid as shares and tends to require more money to get started. But it does provide solid capital growth and rental income. On the other hand, shares are not the faint hearted due to the volatility and uncertainty it brings given shares are subject to market, economic and geopolitical risks although they don’t require a significant initial investment amount to get started.
In terms of best practice and for those who can afford to do so, it’s good to have exposure to both shares and real estate through a “diversified” portfolio in order to “spread the risk” from both asset classes.
On behalf of BestBari, all the best for finding your flat for sale in Dhaka. BestBari is a leading BD property company in Bangladesh. If you would like to find out more about flat and house sales in Dhaka for investing please contact us to book in a complimentary consultation with one of our property specialists.
