Ghana needs bank to improve housing sector – GREDA
Mr Sammy Amegayibor, the Executive Director of the Ghana Real Estate Developers Association (GREDA), has advocated the reestablishment of a real estate bank to improve the sector.
Mr Amegayibor said the bank is imperative due to the lack of access to affordable capital, adding that such an institution would help bridge the housing deficit.
A statement issued by Mr Fidel Amoah, the Content Manager of Lamudi Ghana and copied to the Ghana News Agency on Wednesday said the defunct Bank for Housing and Construction (BHC), which was established in the early 1990s, provided funding at affordable rates for real estate projects.
It said GREDA was then one of the main beneficiaries of the bank, ensuring that borrowing costs were minimised.
It noted that the Bank was however, liquidated in 2000 due to a downward spiral in financial fortunes, depriving the real estate sector of accessible funds.
Mr Amegayibor highlighted the importance of reestablishing such an institution, adding that the real estate industry needs a combination of accessible funds as well as mortgages to thrive.
“The Bank for Housing and Construction enabled GREDA members to borrow money at a very affordable rate to build houses,” he stressed.
“Together with HFC, whose original mandate then was to provide mortgages for house hunters, they created an enabling environment for the housing sector.
“This is because HFC provided a ready market for developers while paying the lump sum on behalf of homeowners.
“Concurrently, developers would have the requisite funds to pay back the loans obtained from BHC while BHC would be reimbursed to ensure the cycle continues,” he added.
Describing it as a “perfect scheme”, Mr Amegayibor said its resuscitation could expand the country’s housing stock.
He added that the housing deficit would be reduced as a result.
Mr Amegayibor spoke against the practice of awarding public housing contracts to multinational companies.
He stated that it has yielded little dividends for the housing sector while having a negative effect on the country’s local currency and economy.
“Awarding contracts to multinational companies is not the solution to Ghana’s housing deficit. On short term bases, it may add a few houses on the market.
“However, housing is a long term investment and the current status quo is not sustainable for the sector.
“This is why we have to explore establishing housing facility institutions that can provide funding to developers to ensure more houses are built,” he said.
The Managing Director of Lamudi Ghana, Akua Nyame-Mensah said: “The government needs to work closer with GREDA to ensure more affordable houses are built. A financial institution for housing may not be the ultimate solution to the country’s housing deficit but could prove crucial.”
“The country’s land tenure system also needs to be better streamlined to facilitate the process towards more affordable housing,” she added.
Launched in 2013, Lamudi is a global property portal focusing exclusively on emerging markets.
The fast-growing platform is currently available in 34 countries in Asia, the Middle East, Africa and Latin America, with more than 800,000 real estate listings across its global network.
The leading real estate marketplace offers sellers, buyers, landlords and renters a secure and easy-to-use platform to find or list properties online.