By Kwaku Boakye Karikari
The Executive Secretary of Ghana Real Estate Developers Association(GREDA), Mr Samuel Amegayibor, has disclosed that the cost of housing will reduce significantly in coming months.
He expressed this view to Goldstreet Business following government’s decision to establish a housing bank.
“With the introduction of the housing bank and some tax waivers, we, the real estate developers, are not going to borrow from banks at commercial rates that hover around 32 percent any longer and are also not long term financing. This means that cost of developing will reduce making housing cheaper for Ghanaians,” Amegayibor opined.
The Executive Secretary of GREDA was hopeful that the bank will understand the dynamics of the business thus supporting GREDA to effectively compete with foreign developers.
“GREDA would have easier access to funding which has been our main challenge when it comes to competing with foreign developers who are financially far stronger,” he averred.
Checks reveal that the price of housing units keeps rising with units in prime areas like Airport residential Area, Osu R.E, Dzorwulu and many others averaging above a million dollars and commercial rentals going for between US$1000 and $2500 per square metre.
With the proposed scrapping of the five percent real estate tax, rent tax and VAT on raw materials, which the current government has described as nuisance taxes, the cost of housing units in these prime areas could decrease significantly.
GREDA believes a drop in prices of housing will boost demand thus incentivizing GREDA members enough to increase the Association’s current annual output estimated at 4,500 units.
Mortgage companies estimate that most Ghanaians can only afford houses with prices ranging between US$10,000 and US$18,000 given average income levels.
However, looking at the prices quoted for prime areas, and also, the amounts estimated for the least expensive outlying areas including, Abokobi, Kwabenya, Medie among others which ranges between US$55,211 and US$67,633, it would be difficult for the average Ghanaian to own a house.
Amegayibor also renewed his call on government to take a second look at the land tenure system in Ghana.
According to him, real estate developers have complained about the cumbersome and dysfunctional processes they go through before acquiring lands for development.
The Executive Secretary stated that all lands should be vested in the state and when this happens the state becomes the only one that would be empowered to sell, and individual owners wanting to sell land would inform the state as and when they want to sell and to whom.
This he says would go a long way to solve the rising land disputes and land guard menace in Ghana.
Currently shortage of affordable residential units is said to be acute, with the current deficit estimated to be about 1.7 million units and is expected to hit two million by 2018.