Lower building costs to drive down high housing prices

It is an undeniable fact that correcting Ghana’s housing deficit would require concerted efforts by both the government and private sector.

At Citi FM’s Housing Forum which came off on Tuesday at the Alisa Hotel, discussants identified the systemic challenges facing the housing sector and looked at ways to correct the trend.

These bordered on the future of housing with an emphasis on sustainability, affordability, standards and financing.

With a projected housing deficit of 2 million by 2020, industry players believe there is the need to pin down all stakeholders to quicken the pace of bridging the housing gap.

With a keen interest in how the capital city is planned and structured, the CEO of Apollonia City, Bright Owusu-Amofa identified the complex issues in land acquisition and documentation as one fundamental issue which ought to be rectified immediately.

“The Metropolitan and national governments must be willing and able to either acquire or facilitate the acquisition of bulk developable lands.

We also need to provide the enabling infrastructure for the development of satellite towns and cities,” Mr. Amofa said.

While admitting that Ghana’s relatively high cost of mortgages, prices out a large chunk of prospective homeowners, the Chief Operating Officer of Ghana Home Loans, Kojo Addo-Kufuor impressed on colleague industry players to develop models that will enable everybody to get accommodation despite his daring remarks that, ‘not everybody will own a house.’

Meanwhile, Professor William George Ntsiful of the Department of Architecture at the Kwame Nkrumah University of Science and Technology and a member of the Ghana Institute of Architects believes the continuous pricing of properties in dollars by real estate developers remains as a key constraint to Ghana’s housing challenge.

“… GREDA has apparently moved towards the high end of the housing systems in the country; some of the housing systems that they build, first of all, the cost is in dollars not in cedis and some people do afford and have bought such houses but I don’t think the average Ghanaian can ever dream of buying a house from GREDA,” Professor Ntsiful remarked.

In a sharp rebuttal, the Executive Secretary of the Ghana Real Estate Developers Association (GREDA), Mr. Sammy Amegayibor attributed their decision to the cost of finance which is largely indexed to the dollar bearing in mind the depreciation of the local currency.

“It’s not our fault we don’t actually want your dollar but the problem is we have invested money and most of us also go out there to borrow money.

Real estate is not a supermarket item where you can produce it 24 hours; it takes a long time like two to three years.

How can I borrow money today at 1 dollar to 2 cedis and by the time I finish handing over the project, its one is to four cedis?” He quizzed.

“If I had borrowed 100 or one million dollars at the beginning of the project, I have to pay back at the end of the project with interest.

Where do you expect the developer to find the difference in the exchange rate?

It is not indexing the price to the dollar that will make him survive I cannot invest hundred thousand and reap eighty thousand, my businesses will collapse,” Mr. Amegayibor added.

The forum also climaxed the outdoor events for this year’s Citi Business Festival.

The Real Estate Forum provided the platform to discuss critical issues pertaining to Ghana’s housing sector.