Friday, February 10, 2017

Expectations from The New Ghana Government on The 1.7 Million Housing Deficit

Expectations From The New Ghana Government: Affordable Housing For All?

If the promise of the current government of Ghana, in its 2016 manifesto, is anything to go by, then it can be projected that this year and the subsequent years will be good for the real estate industry; specifically, for the private individuals in the real estate development and prospective homeowners when the government starts to implement its policies. The new government of Ghana seeks to work with the public and private investment entities to provide quality and affordable housing for all Ghanaians.

Their vision is to blend public policy with private investment “to deliver quality affordable social housing and private housing solutions that meet the needs and financial capacity of the ordinary Ghanaian.” In effect, they identified some challenges in this sector including a housing deficit of about 1, 700,000 units, undersupply of annual requirements of housing units and the high cost of buying or renting a home. These constraints in the housing sector in Ghana are not new to most Ghanaians. It has been estimated that about 50% of the Ghanaian population live in substandard houses, slums, uncompleted buildings, shops or kiosks and in extreme cases on the streets.

To help realize the dreams of the ordinary Ghanaian to acquire a decent building for rent or on purchase, the NPP government promised to adopt “a novel way to the construction of homes and institute creative financing schemes”. They hope to use these means to first improve the general affordability and access to decent homes for all working Ghanaians and their families, develop housing units targeted at the vulnerable and marginalised in society, develop financing schemes to assist home buyers to acquire units, improve the quality of infrastructure in existing communities and use public policy to develop the entire housing value chain.

It is evident from the above that the Ghanaian is the focus of this vision. Therefore, whether your aspiration is to own or rent a house, the government wishes to help you realize these aspirations in order for you to make a decent living. Consequently, it is expected that there will be an increase in demand for housing, all things being equal, with respect to the vision of this administration.

As a prospective homeowner, start your journey with us. Check out our House Plans here and take the first step toward building your dream home.

Monday, February 6, 2017

Real Estate Developers Expectations from The New Ghana Government

A new government is in place in Ghana and already stakeholders in the real estate industry are agitating for the fulfillment of some promises made before the general elections in 2016.

One of such promises was the abolishment of the 5% VAT which affected commercial and residential properties developed by real estate developers.

 In January 2015, the previous government introduced a 17.5 percent tax on real estate. The industry players were not happy about the tax and after deliberations and negotiations between the Ghana Real Estate Developers Association (GREDA) and the government, the 17.5 percent was replaced with a flat rate of 5%. In October 2015, a statement from the Ghana Revenue Authority was issued to inform the general public, and in particular mortgage providers and operators in the Real Estate and Construction sector, that The Value Added Tax (amendment) Act, 2015 (Act 890) obliges real estate developers to charge and account for VAT on taxable supplies of immovable property at a flat rate of 5% on the value of each taxable supply; and that estate developers engaged in the sale or supply of immovable property are required to charge and account for VAT.
  Coat of arms of Ghana

Though there was a reduction, many real estate developers were not happy and requested that it be scrapped. They reasoned that the imposition of this tax meant that many low-income earners will not be able to access mortgages since there will be high mortgage rates and eventually purchase a house. Also, prospective house owners may be scared away looking at the striking increase in prices of houses since the 5% will finally be borne by the new home owner.

Following the above explanations, operators in the real estate and construction sector are eagerly anticipating for the total scrapping of the 5% tax introduced in 2015. Accordingly, many prospective house owners and industry players expect the new administration to live up to expectation by ensuring that they fulfill their promise to bring relief to developers and consumers. This will encourage spending; thus, there will be an increase in sales. It will reduce the burden on estate developers resulting in an appreciable growth rate in the economy and allow more people to access or qualify for mortgages.

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