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Mortgage sector upbeat about $1bn investment

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Players in the mortgage industry have described the government’s decision to support the industry with a billion dollars as a step in the right direction.

The players are confident the action will help address the housing deficit while revamping the sector.

The Finance Minister, Ken Ofori Atta earlier disclosed to Citi Business News Ghana’s maiden thirty year bond will be channeled into reducing the country’s rising housing deficit.

According to him, this will be achieved through the provision of mortgages and the completion of the government’s affordable housing unit projects.

Reacting to this, the Head of Business Development, mortgage at the Republic Bank, Frank Oppong Yeboah said,

“It is a step in the right direction and a stitch in time because we have so much backlog of housing deficit in this country so if we can get the government of Ghana to come up with a package, then it is a relief.”

Ghana’s housing deficit currently stands at 1.7 billion, with industry watchers predicting the figure will escalate to 2 million by next year.

The thirty year bond, a maiden one to be issued by Ghana, attracted a billion dollars from investors.

The country is expected to pay back investors at a rate of 8.62 percent.

The Finance Minister attributed the investor response to a turnaround in the economic fortunes of the country.

“It’s basically an indication of trust that people would want to go that long with your country… usually when you are creating mortgages, you benchmark them against twenty to thirty year paper.  So now we are beginning to get a sense of such type of pricing, as we create instrument to support the mortgage industry,” he stated.

Mr. Frank Oppong Yeboah further said he is confident of a turnaround in the industry with the new development.

“So if this bond comes to full operation, I hope that it is going to fuel economic development and also solve banks mortgage deficit problems that the country has been facing for some time now” he added.

By: Jessica Ayorkor Aryee/citibusinessnews.com/Ghana

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