The soaring price of lands in major cities of Accra, Takoradi, Tema, Kumasi and Tamale, as well as other regional and district capitals, has made it difficult for low and middle income earners to build decent houses to shelter their families.
A plot of land measuring 100 X 70 feet on the fringes of Accra—Abokobi, Oyarifa, Amrahia, Oyibi and others–costs an average GH¢ 40,000. The situation is not different in Tema, Kumasi and Tamale.
While individual buyers struggle to raise enough money to purchase plots of land, estate developers have also had to contend with the rising cost of land, the basic component in their operations.
Housing deficit in the country currently stands at 1.7million and is said to be growing by 70,000 units per year, a figure that has been thrown into doubt by experts who contend that is possibly more.
The Ghana Real Estate Developers Association (GREDA) estimates that about 50 percent of Ghanaians live in sub-standard houses and various unsuitable structures.
With population projected to reach 32.2 million in 2020, and about 57 percent living in urban communities, in addition to the ever increasing rural-urban migration.
With this stark reality, GREDA has called for a concerted effort to address the housing crisis.
“We are talking about a deficit of 1.7 million housing units mainly needed to house ordinary Ghanaians. The problem for developers is that the cost of land is too expensive and so it will be difficult for them to reduce the cost of their properties to meet the income levels that the ordinary people can afford,” President of the Ghana Real Estate Developers Association (GREDA), Kwakye Dopoah Dei said on the sidelines at this year’s GREDA CEOs Meeting held in Accra
Mr. Kwakye, therefore, called on government to partner real estate developers in order to bring the housing situation under control.
“If government partners us, it will be very easy for houses to be affordable. If government will do the infrastructure for us, then it is going to help reduce our cost of operations.
For example, if I am a developer and I have about 300 acres of land, and government partners me and provide certain basic infrastructure and amenities like road, water and electricity, and tells the developers to sell the houses within certain range, then definitely, we will comply because our cost of operations have been reduced,” Mr. Kwakye said.
Government, in an attempt to stimulate investor interest and also to make housing affordable scrapped the 5 percent VAT on real estates in the 2017 budget approved by parliament.
Concerns have been raised as to whether this will translate into reduction in the retail prices of houses.
This, Mr. Kwakye said, the scrapping of the taxes will soon reflect in the retail prices of houses. “Now that the 5 percent VAT has been abolished by the government it will have impact on the cost of our properties,” he insisted.