The Ghana Real Estate Developers Association (GREDA) and stakeholders in the real estate sector have raised concerns about the cost of financing mortgages in the country.
Consequently, the association is calling for a new law, which they say, is key to regulating mortgage financing across the country.
The President of GREDA, Mr Patrick Ebo Bonful, said “we need some laws to regulate mortgage financing. With this, new guidelines determining how refinancing of mortgages will go a long way to reduce the burden of non-performing loans on the part of the banking institutions.”
The real estate developers made this call at a CEO’s Breakfast Meeting held in Accra. At the program, players in the construction value chain discussed possible ways of making real estate sector more favourable for investors.
Issue of affordable housing is getting pertinent by the day. More so when the population of the country continues to increase.
Although the 2020 census is yet to be conducted, Ghana’s population is estimated to be around 30 million.
What is worrying is that despite the increase in populations there appears to be huge deficit in terms of housing.
According to figures from the ministry of works and housing, Ghana’s housing deficit currently stands at about 2 million.
This worsening situation has given rise to homelessness in the country, with parts of streets in urban centers becoming sleeping places for many people.
For instance, a 2016 report by the Africa Research Institute indicated that of Ghana’s urban population, 5.5 million people live in the slums due to unavailability of affordable housing.
The sustainable development goal 11, that is sustainable cities and communities, talks about the need to make “cities and human settlements inclusive, safe, resilient and sustainable”.
This goal may, however, not be realised if something is not done about the problem.
In a move to reduce the deficit the government recently, in the 2019 Budget, announced a GH¢ 1 billion Mortgage and Housing Finance Fund which offered the lowest rates of between 12 per cent with Stanbic Bank and 11.9 per cent at Republic Bank.
This is far lower than the minimum rate of 24 per cent for non-foreign currency or cedi-denominated mortgages.
Again, the government has partnered with the United Nations Office for Project Services (UNOPS) to deliver 100, 000 new affordable housing units by 2022.