General News of 2014-05-06

Over 70% of workers not likely to ever own a home

Salaried workers who plan to buy a home but whose income fall below 4, 000 Ghana cedis may have to find a way to increase their salaries or switch to jobs that will boost their income, as the latest report on the real estate industry reveal that they may be unable to qualify for a mortgage.

This is according to a report by the Housing Data Centre.

According to the Housing Data Centre, which draws data from the real estate and housing sectors in Ghana and survey data from mortgage players and other sources, prices of houses are likely to go up by at least 50 percent this year alone, if the current economic challenges continue.

The Housing Data Centre further warns the situation could worsen if interest rates, fuel, electricity and transport cost continue to rise

According to the report, prices of houses started soaring last year and this continued into the first quarter of this year.

For example, in the first quarter of 2013, a two-bedroom semi detached house at Kantamanso was going for USD 69,500 while a three bedroom detached house in the same area was going for USD 180,000.

The same houses are now going for USD 98,000 and USD 220,000 respectively, an increase of 23.5% and 18.5%.

The price hikes run through other areas including Dawhenya in Tema, Kasoa in the Central region and Dodowa in the Greater Accra region, where prices of houses have risen between 18 and 25 percent.

The Housing Data Centre attributes the rising cost to the continuous depreciation of the cedi against major foreign currencies and hikes in fuel prices, leading to increases in general goods and services.

It also attributes the increase in the price of houses to cost of labour, material and infrastructure cost, import duties, overheads, interest rates, difficulties in acquiring litigation free land, and the additional introduction of 17.5% VAT in the sector.

Meanwhile, if you have plans to get a mortgage this year, you may have to brace yourself; according to the report, mortgages have become extremely difficult to access. Salaried workers with an income lower than four thousand cedis may find extremely difficult to have access to a mortgage.

For example, in the first quarter of this year, a worker needed a monthly repayment of Ghc1,820.00 for a one bedroom house with the qualifying income of Ghc4,000.00 while the monthly repayment for a two bedroom house at Kuntunse costing Ghc142,000 was Ghc2,872, with a qualifying income of Ghc6,000.00; also, a monthly repayment for a three bedroom house costing Ghc180,000 at Amasaman is Ghc4,000 with the qualifying income of Ghc12,000.00.

The Housing Data Centre fears the continuous depreciation of the cedi, as well as the introduction of the 17.5% VAT charge in the sector will make it more difficult to purchase a house.

Source: citifmonline.com
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