Housing is crucial

While there are no readily available reliable statistics on the Ghana’s housing deficit, conservative estimates put the figure above 1.5 million housing units.

It is imperative to note that the housing deficit does not necessarily mean that there is a shortage of actual housing units. While it has something to with the supply side, the cumbersome means of home ownership generally expressed in costly financing does not make things better.

Mortgage financing is perhaps the most popular way of home ownership in many parts of the world. In Ghana, the mortgage market while still growing faces a number of challenges that make it unattractive.

Generally, due to their long-term nature, people seeking mortgage prefer a lower yield financing. But the relatively high interest rate in Ghana make this nearly impossible with people rather preferring to explore other painstaking alternatives to home ownership.

Indeed, many believe that unless there is a strategic government policy to making mortgage a mainstay, the status quo would reign for a long time.

It was not surprising seeing government begin to take active role to encourage home ownership with the introduction of the National Mortgage and Housing Finance Initiative two years ago.

After being piloted for the last two years, government has declared its interest of scaling up the initiative to other regions which is a very laudable thing to do.

The National Housing and Mortgage Fund (NHMF) was set up under the initiative to pilot two schemes—the National Mortgage Scheme (NMS) and the Affordable Housing REITs (rent-to-own) scheme.

The mortgage scheme works with participating banks—GCB Bank, Stanbic and Republic Bank—to provide mortgages at reduced rates of 10-12 percent compared with the market average rate of 28 percent.

This paper supports that plan to expand the housing financing scheme to other regions to afford everyone an opportunity to own decent houses which are gentle on the pocket.