Real estate developers have called on government to set-up a special fund in the likeness of the Export Trade, Agricultural and Industrial Development Fund (EDAIF), to address the country’s housing deficit. Samuel Amegayibor, Executive Secretary of GREDA told the B&FT: “There has to be another way of funding housing.
There has to be some housing fund. Government, instead of going to spend so much money like in the case of the STX insurance, should create a Fund managed by a local company”.
The government, he said, can then say “local real estate companies, go there and borrow for five or ten percent”.
The Ghana Real Estate Developers Association (GREDA) estimates that about 50% of Ghanaians live in sub-standard housing and various unsuitable structures.
Various sources estimate that Ghana’s population could reach 32.2million in 2020, with about 57 percent living in urban communities, a situation that will compound the current housing deficit.
The current housing deficit in the country is estimated at 1.7 million units — a figure that has been thrown into doubt by experts who contend that it’s possibly more — with an annual growth rate of 70,000 housing units.
Many hard-working citizens who don’t own a house, or are unable to afford decent accommodation, have been let down by two main antagonists — the prevailing economic conditions and inimical housing polices.
“If we come up with these innovative measures and implement them well, we can solve the housing problem,” said Samuel Amegayibor, who is also the Managing Director of Homes Direct.
GREDA also wants a review of a 5 percent VAT imposed on houses sold on or after October 1, 2015.
The Association argues that given the present housing deficit, imposition of 5 percent VAT on the sale of housing units will push most of the working class out of the income band required to own a standard home in the country.
“Among the many troubles the VAT will bring is that it will push the retail prices of houses upward; disqualifying many people from accessing mortgages and ultimately threatening the survival of companies operating in the housing sector.“It will also further widen the national housing deficit, which is currently an albatross on the neck of government,” Amegayibor said.
His comments follow similar ones by Tyron Adu-Mfum, Marketing Manager, Devtraco Limited — a real estate company.
“We don’t necessarily disagree with the 5 percent VAT, but what we are talking about is the timing.
The implementation is in October, but we have been asked that any contract we entered into, regardless of when, will have to pay VAT on money they owe.
But we don’t have any agreement of that sort with such clients; so how do we deal with this?” Mr. Adu-Nfum said.
“The company cannot carry this entire burden. A lot of factors are already collapsing our business and so we do not want this in addition.
What this will bring about is clients may pull out of contracts if we try to force it on them, and that will bring about a big loss of revenue to us,” he added.
Source: B&FT Online