They said Tk 500 would be added to the present rate (per-square-foot) of the flats in up to six-storey buildings and over Tk 500 to the rate of the ones in the high-rise buildings.

The developers however admitted to a drop in sales of apartments in a span of 5 months this year by 65 to 75 percent over the corresponding period last year due mainly to surge in apartment prices.

"Flat prices will go up by 40 percent in posh areas such as Dhanmondi, Gulshan and Banani. Apartment prices in other areas will soar by 20 percent," said Tanveerul Haque Probal, general secretary of the Real Estate and Housing Association of Bangladesh (REHAB), at a press conference in Dhaka yesterday.

Significant price hike in construction materials will force them to up Tk 250 per Sft, Probal explained, adding that the rest of the hike in flat value will be made due to enhanced cost of construction of flats for the owners of lands given to any developer under a deal on certain terms and conditions.

The present market prices of MS rod have marked a rise by 19percent, cement 32percent, bricks 62percent and sand 72percent compared to the prices in 2005.

According to the REHAB estimation, electric wire prices increased by 100percent, aluminum and paint 32percent, labour and materials 28percent, said REHAB leaders.

Per thousand bricks were sold at Tk3100 in 2005, the market price of which now increased to Tk5000. Sand price increased to Tk12 from Tk7.5 per square foot and cement price increased to Tk350 per bag from Tk265 per bag in 2005, according to the REHAB leaders.

They said prices of rod (60 grade) increased significantly in the last three years by Tk7500 per tonne. Presently, rod is priced at Tk47,500 a tonne, which was Tk40,000 in 2005.

The REHAB leaders attributed the high prices of construction materials to electricity and gas crisis and increased transportation costs.

When asked who will bear the increased flat prices, Probal said, "Of course the buyers should bear the costs. But it will be decided through consensus between buyers and sellers. And here the REHAB will act as mediator to settle any dispute."

He, however, said," If a developer demands high price of an under construction flat without showing any rational reasons, it will not be granted by the REHAB."

The present anti-corruption drive also hampers the business of the sector, said S M Anwar Hossain, acting president of REHAB.

He said, "Our clients both home and abroad are showing hesitation to transact huge amount of money at a time."

Syed Sirajul Haque, treasurer, M G R Nasir, joint-treasurer of REHAB and Enamul Haque, chairman of the Building Materials Price Review Committee of REHAB were present at the press conference.