Decent accommodation continues to be the biggest headache among many Ghanaians.
As the housing deficit goes up, the debate continues whether Ghanaians prefer buying a mortgage house or build their own house looking at the cost, time and terms involved.
Ahead of Citi FM’s Housing and Real Estate Forum on Tuesday, 27th June,2017, Citi Business News has been speaking to some industry players on what the critical challenges facing the housing sector.
It appears that obtaining a decent accommodation is perhaps the most of the pressing needs facing the average Ghanaian.
“I will prefer building my own house because of all the problems associated with mortgage coupled with long term payment,” one worker asserted.
Another said, “It depends on my financial position at the time but I will prefer to build my own house. Mortgage I feel that if you are not a salaried worker or a business person who is earning quite a substantial income it will be difficult to repay the loan.”
Studies suggest that Ghana’s housing deficit is currently at 1.9 million.
This is expected to escalate to 2 million by 2020.
With this, the government needs to identify pragmatic solutions to the problem.
According to the Executive Secretary of the Ghana Real Estate Developers Association (GREDA), Mr. Sammy Amegayibor, the figures are alarming.
“The projection here is that between 2010 and now because we have not done well and we are only doing just about only half of what was required of us, we have increased the deficit and we think that we have hit around 2 million and we could be worsening over the years because we don’t seem to have put in any measures to actually confront the situation.”
In spite of the deficit, the high operational cost is also starring in the face of developers.
These have been influenced by complex land tenure and registration issues, high cost of mortgages which comes at an average of 32 percent.
With this, it is nearly impossible to secure a mortgage loan if you earn a monthly salary of 2000 cedis or less.
The real estate industry players are also grappling with competition from imported materials and even labour.
But for those who are looking forward to buying a house but shiver at the mention of the name, the Business Development Analyst at Ghana Home Loans, Amy Ankrah says this is largely due to misconception by prospective buyers.
“The income brackets are not the same anywhere in the world but for Ghana Home Loans as an institution, we have products tailored to suit every category so you don’t walk in here and not qualify for something and be turned away. It is beneficial though because we are helping people realize their dreams of home ownership which otherwise will probably have taken someone an entire lifetime” she stated.
Mr. Sammy Amegayibor, however believes efforts to reduce the interest rates for developers to between 5 and 10 percent will quicken the pace of providing affordable housing.
“The interest rate is astronomical. We have been paying from 32% interest rate from the banks so if we don’t do something about it will be worse for our business. So our recommendation here is that for businesses, we all go onto the open market to borrow and I don’t fault anybody for charging interest. The only problem here is that if we all agree that housing is a necessity and that there are no affordable housing in place then there has to be something special done for financing and so we expect that maybe there could be a fund somewhere that developers can access at a much cheaper rate. Maybe between 5 and 10 percent will not be bad to start with.” he said.
But the decision to build or to buy notwithstanding, one thing is clear; affordability of the facility is of priority to the Ghanaian.
At Citi FM’s Real Estate and Housing Forum, the critical questions will be asked while panelists provide practicable solutions to them.
The forum will take place at Alisa Hotel at 3 pm today.
To be a part of the forum, call 0302226013.
By: Jessica Ayorkor Aryee/citibusinessnews.com/Ghana