Some real estate developers have dismissed assertions that the real estate industry may be experiencing a down turn over low purchases due to the high cost of properties.
The widening housing deficit has led to a boom in the real estate sector, in a bid to create opportunities for more people to obtain decent accommodation.
However, the situation rather seems to be hitting a snag as the cost of properties continue to rise; leaving an opportunity for only a select few to purchase.
Though the General Manager for Devtraco Plus, Cyril Tay admits that there has been a decline in purchases, he rather attributes it to the impact from the global economic performance.
“I don’t think there is a recession, I think there is a slowdown in the real estate market and there was a slowdown in the global economy; commodities like cocoa, gold and oil all took a hit and that translated into a slowdown everywhere including the emerging markets like Ghana,” he explained to Citi Business News.
Ghana is currently faced with a housing deficit gap of 1.7 million.
The figure is also anticipated to increase to 1.9 million if the issues go unabated.
The concerns of a possible recession also come on the back of the fact that housing units, predominantly quoted in dollars, are driving prospective home buyers away.
The situation is further aggravated with the high interests on mortgages quoted by commercial banks offering mortgage loans.
For instance, in the nation’s capital, the price of housing units may be from about US$75,000 to about US$650,000.
Meanwhile in other regions, the housing units may be within US$33,000 to about US$80,000.
Giving reasons accounting for the high costs of housing properties, Cyril Tay cited the relatively high cost of land (estimated US$2,000,000) and the high import taxes charged on imported furnishing for such apartments.
He was however confident the situation will normalize as other market players come in to offer relatively less expensive accommodation units to meet the demands of the majority of middle income earners.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana