As part of efforts to bridge Ghana’s housing gap, the Minister of Finance, Ken Ofori-Atta, says public sector workers and low-income earners in the country will in the coming months have the opportunity to rent and eventually own homes under the National Housing and Mortgage Fund.
According to him, the intervention will reduce mortgage rates by over 60% as compared to the average market rate of 28%.
Also, the participating banks will offer mortgages at rates between 10 and 12 percent.
“The issue was that the financing costs were too high. So, we decided to create a mortgage and give a type of subsidy to the public or private sector. So that as you pay gradually, you can turn it into a mortgage for you to be able to own it fully. The banks would also step in to help reduce the rate but the blended rate should not go beyond 10 and 12 percent as compared to the current 28 or 34 percent,” he said.
He further noted that based on the building specification, the starting price for houses are GHS140,000 and GHS90,000 for standard two-bedroom and one-bedroom respectively.
The Minister of Works and Housing, Samuel Atta Akyea, also said the project could see the country narrow its housing deficit drastically by as much as 40 percent in the next four years.
“Let’s not project terribly, but we can give you a very strong indication that the deficit will be reduced considerably. If we are able to reduce the deficit by 40 percent, it means we have done fairly well because the deficit is 2 million housing units.”
“If we push very hard in the districts and municipalities, and in the cities where we have teeming crowds of workers, we will give many permanent shelters. The president is seriously committed to reducing the deficit. If we do 40 percent that is a serious breakthrough; a lot of people would find places to rest,” he said.
The National Housing and Mortgage Fund was set up to pilot two schemes; the National Mortgage Scheme (NMS), and the Affordable Housing Real Estate Investment Trusts (REITs) Rent-to-own Scheme to provide extensive construction of residential housing nationwide to promote social equity.
Participating banks administering the NMS are the GCB Bank, Stanbic Bank and Republic Bank.
The Minister of Finance noted that the two-year pilot phase of the rent-to-own scheme was aimed at providing more decent homes for Ghanaians, with the starting price for houses pegged at GH¢140,000 and GH¢90,000 for standard two-bedroom and one-bedroom homes, respectively.
“The affordable REITs will become the off-taker of the property in development by both the TDC and Adom City to revive the affordable housing concept and complete many of the abandoned housing units across the county,” he said.
He also noted that government was excited about the challenge taken up by the Ghana Real Estate Development Association (GREDA) and Adom City Estates to build some 15,000 housing units, of which a pilot of 200 would be done annually.