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Government must provide the right policies for the real estate industry to address the country’s growing housing deficit, Anita Arkutu -- the Executive Director of Vera Causa Realty Limited, has said.
Ghana’s housing deficit, estimated at 1.7million units, has led to various attempts by central government to address the growing deficit. The private sector, on the other hand, has had very little support from government to address the issue.
The recent imposition of 5 percent VAT on houses sold on or after October 1, 2015 this year, coupled with the poor performance of the local currency against major trading currencies, has pushed house prices well beyond the reach of average workers.
“It is such a shame, in my opinion, that government has imposed 5 percent VAT on the sale of houses. The private real estate companies should be supported with the right policies to enable the private sector build more houses to address the shortfall,” she said.
Initial attempts by government to provide large-scale affordable housing under the STX Housing project fell through, due to boardroom wrangling in the private real estate company despite a sovereign guarantee.
Government in 2011 entered into an arrangement with STX Ghana and its Korean counterpart for the construction of about 300,000 housing units to address the decade-old shortfall in the housing sector. The initiative was seen as the largest-ever government intervention in the sector.
However, the deal fell through following STX’s boardroom wrangling involving the partners. This led to the government of Ghana suspending its initial US$1.5billion sovereign guarantee.
Two and three-bedroom affordable housing units, being constructed by the government for low and middle-income and civil servants as well as personnel of the security services, cost between US$29,000 and US$57,000 respectively.
The price of the housing units has come under intense scrutiny by Parliament, which thinks the selling price is too dear.
“All figures are inclusive of the cost of land, infrastructure and so on. Now, when we are pricing it we will value it and take it off. We are yet to determine the cost. Today we have approved some exemptions for investors; if they had been made to pay all those taxes, they would also slap them on the final consumer. Now that they have been exempted, this will be considered and I believe bring down the cost of the houses,” Sampson Ahi, the Deputy Minister for Water Resources, Works and Housing said.
“We need the right policies to help us construct good houses at affordable prices. We need to take a look at our land tenure system, and other incentives to encourage the private sector build more affordable houses,” Kojo Kwakye Owusu, Managing Director of UT properties said.
Anita Arkutu noted that local companies such as Vera Causa have the capacity, and with the right policies they can help solve the country’s housing problem.
“Vera Causa is a holistic boutique real estate and law firm. Whatever your real estate needs are, we are able to address them. We do constructions. However, for people who don’t want to bring down their house, we are there to support and help them restore it to their desired taste innovatively.
“We make sure that our properties are always safe, functional and structurally sound. We will walk you through the construction process and get you want you want by working with the artisans. We will also provide you with all the requisite documents,” Ms. Arkutu said at the launch of the realty firm in Accra.
