The President, Nana Addo Dankwa Akufo-Addo, has inaugurated a newly developed housing estate at Community 22 in the Ashaiman municipality aimed at addressing the housing deficit in the country.
The project, a collaboration among the National Mortgage and Housing Finance Initiative, the Tema Development Corporation Limited (TDCL) and GCB Bank, has delivered the first phase, comprising 204 units of one-bedroom semi-detached, two-bedroom semi-detached and two-bedroom detached expandable homes.
Situated on 20.8 acres which has been developed as a gated community along the Tema-Akosombo road near the Michel Camp in the Ashaiman municipality, the estate becomes one of the success stories of the government after two years of the establishment of the National Housing Mortgage Fund (NHMF) to provide decent housing units for public sector workers at affordable rates.
Three banks are providing mortgages for interested public sector workers at rates between 10 and 12 per cent to own houses under the National Housing Mortgage Scheme. They are GCB Bank, Republic Bank and Stanbic Bank.
The government, in 2018 introduced the National Mortgage and Housing Finance Initiative to stimulate local currency mortgages.
President Akufo-Addo said ordinary Ghanaians had to grapple with the problem of multiple sale of lands, land guards, the high cost of building materials, high interest rates, among others, that made home owning very difficult.
He said others had to deal with the payment of high two-year rent advance, coupled with a lot of problems, and that informed the rationale behind the government’s initiative.
He explained that under the National Housing Mortgage Scheme, the mortgages had been reduced by about 60 per cent, compared to the average rates of 28 per cent on the market.
He noted that under the scheme, with only monthly payments for some time, the occupants could take the option of owning the house under the rent-to-own option.
He said the scheme would be replicated throughout the country to complete all the uncompleted houses which were started by the Kufuor administration.
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The President noted that the scheme was also designed to ensure that with a successful offtaker being created, the government was not burdened with offering sovereign guarantees that put an excessive debt burden on it.
He said the Ministry of Works and Housing would partner other institutions to speed up work in the delivery of houses under the National Housing Mortgage and the Affordable Housing Rent-to-Own schemes to get investors to increase affordable houses in the country.
Over the years, President Akufo-Addo said, the housing sector had seen slow development as the land tenure system, the lack of effective regulation, as well as legal frameworks, had hindered the sector’s growth.
“Evidence suggests that Ghanaians spend a considerable part of their incomes on rent since the cost of housing on the market has seized the means of many ordinary workers, with no hope of them ever owning homes during their working lives,” he said.
The alternative, therefore, he said, was for most workers to acquire land at the outskirts of the city, which they used an average of seven to 10 years to put up their own houses, amidst dealing with multiple sales, as well as intimidation from land guards.
The front view of the housing project at Community 22 in Tema.
The Minister of Finance, Mr Ken Ofori-Atta, in his remarks, indicated that the government had, over the past two years, provided seed fund of GH¢80 million to the NHMF, which helped to deliver the model community houses at a cost of about GH¢45 million, thereby supporting nurses and teachers to rent and own houses in Tema.
The mortgage market, he stressed, remained relatively underdeveloped, hence the need for appropriate policies to improve the attractiveness of the mortgage market in the country.
Presently, he said, only about 6,000 mortgages had been underwritten in Ghana over the past two decades (2000-2019), with the country’s mortgage debt outstanding (MDO)-to-GDP in 2019 standing at 0.5 per cent.
“This measures the depth of the mortgage market in Ghana, which is relatively low, compared to about 2.2 per cent in Kenya,” he said
Mr Ofori-Atta said the government was, therefore, committed to increasing funding to the NHMF to about GH¢1 billion to enable the development of similar model communities in other districts across the country.
“This scheme will deepen the local currency mortgage and housing finance market, while leveraging the banking and capital market and also providing access to cheaper mortgage loans for households at lower rates to ensure the promotion of social equity,” he said.
The Minister for Works and Housing, Mr Samuel Atta Akyea, indicated that in spite of the challenges, the government had made considerable progress in delivering on housing.
“I know 2021 to 2025 will be the President’s legacy years where the deficits will be reduced marginally, where we can have a constituency having at least four flats if the financial space is enlarged,” he said.
The Deputy Secretary-General of the Trades Union Congress (TUC), Mr Joshua Ansah, appealed to the government to ensure that the houses would go to benefit public sector workers and not government officials and their allies who might end up as beneficiary owners of the homes which they would turn around to rent to workers.
The President of the Ghana Real Estate Developers Association (GREDA), Mr Patrick Ebo Bonful, reminded the President of the need to review the Mortgage Act, 2008 (Act 770), the Lands Commission Act, 2008 (Act 767), as well as the Land Title Registration Law 1986, PNDC Law 152, to effectively provide financing for mortgages and housing delivery in the country.