Advertisement

New housing scheme rolls out -Govt plans to float bonds

Collins Dauda, Minister of Water Resources, Works and HousingGovernment plans to establish a fund for the construction of affordable houses to reduce the chronic housing deficit bedeviling the country.

This is after a botched attempt by the government to build more than 10,000 housing units for low income and public sector workers through the STX deal.

The fund to be known as the Viability Gap Scheme will target affordable housing projects for financial support.

Finance Minister, Mr Seth Terkper said the focus of the scheme was to make long term funds to the housing finance sub sector by increasing bond yields from the current duration of five years to seven years in the short term.

“We plan to increase it further as the capital markets mature”, the minister said at the annual Housing Excellence Seminars and Workshop in Accra.

Ongoing housing efforts

Already, the Security and Exchange Commission (SEC) of Ghana has begun the development of regulations to guide the establishment of a fund meant to help raise money from within the country to finance the construction of houses for the people.

The Director-General of SEC, Mr Adu Anane Antwi, had earlier announced at a day’s seminar for members of the Institute of Financial and Economic Journalists (IFEJ).

The idea, according to the Director-General of the Commission, Adu Anane Antwi, is to reduce the housing-gap in the country.

The country currently has a housing deficit estimated at over 1.5 million units, with an increase in demand of over 70,000 housing units annually.

The real-estate fund will therefore be a vehicle to mobilise funds and will be invested in real-estate projects. The fund will be listed on the stock exchange and will be a closed-end fund to help the managers do the construction of real-estate projects.

Mr Anane Antwi said “we are doing this because we believe that we can use the capital market to raise funds to undertake housing projects that can benefit all of us”.

According to him, when fully operational, there might not be any need for the government to go out in search of funds for such projects.

Mr Anane Antwi said in view of the failed attempts to source funds for housing projects intended to reduce the serious housing deficit in the country; the time had come for the government to look within.

“This fund will not be a unit trust as in the case of many on the market but it will be in the form of shares so that when one sells off his/her shares, there will be another buyer and that means that the fund will not be affected”, he said.

The minister also indicated that government was also reviewing legislation with the view to enabling the insurance sector  to play a more active role in housing finance.

The government is therefore inviting members of the Ghana Real Estate Developers Association (GREDA) to partner it in the working out the modalities for the fund that will deliver benefits to the people and the government.

“We all acknowledge the challenges that confront us in terms of housing delivery, and request all parties to assist in reviewing and resolving these challenges through effective policies and practices”.

“We will continue to work with you and those institutions to lead the process of transforming the housing situation in Ghana”, the minister added.

There have been many attempts in the past by governments to bridge the gap but the challenge had been how to raise funds from donors and other investors to be able to carry out any meaningful housing project.

Since the Social Security and National Insurance Trust (SSNIT) washed its hands off such projects, it has become a major bane for governments.

This, among many others things, is aggravating the housing problem in the country and making those who cannot afford the expensive ones priced in United States dollars, vulnerable in the society.

Subsequently, he said, the reviewed Securities Industry Law meant to bring it up to international standards and best practices was currently before Parliament for passage into law.

Showcasing housing products

Players in the housing industry have also intensified efforts at showcasing the various housing and housing products all in an attempt to meet the housing needs.

Over the weekend, several housing products were on display such as mortgage finance, real estate developers, construction companies contractors, merchants and some insurance companies to participate in a one stop shop for a complete housing solutions.

The fair, which has become the flagship of the company, also provides the platform for industry players to meet and interact with clients as well as exhibit and sell their products.

The October fair, which is the second for the year, saw a lot of potential home owners thronging the venue to get see what the companies have at stake as well as building relations for further interaction beyond the fair.

Some of the exhibiting companies included Obolo real estate and construction limited, Nkrabea royal apartment, Tonoton, Magna Teris, Superlock Technologies, Blue Rose Limited, Salem Estates, NTHC, Lakeside Estates, Legonman Multi-Concept Limited, RSS Developers, Cedars, Kimo Homes, GLIICO, Starlife Assurance, Devtraco and others.

The general atmosphere at the fair was an exciting one. When the GRAPHIC BUSINESS got to the fairgrounds around 1:00pm, lots of patrons were seen walking into the fair and visiting various stands.

A patron, Ms Naa Kordei Vanderpuije, who was there for the first time, could not hide her excitement about the fair, describing it as a “one stop shop for all housing needs.”

At the Obolo Real Estate and Construction Limited, the General Manager, Mr Israel Afor, told the GRAPIC BUSINESS that their team was on hand to provide in-depth information on their products and services they offered to clients.

He also took the various patrons through various procedures on how they can acquire homes from the real estate company.

The Business Development Analyst of Ghana Home Loans, Mr Michael Obeng, said their housing fair was a target focused fair for housing related businesses to help the stakeholders in the real estate industry reach out to their clients better.

He said the company deployed several advertising means to get patrons to patronize the fair which he touted as “the best fair in terms of housing.”

According to him, feedback from exhibitors showed an increase in their client portfolio and was thus optimistic this year’s edition would yield more results than anticipated.

For a country still aspiring, rather equivocally, to reach an average per capita income of US$1,500, family houses in the major cities of the country are typically going for around 100-times that figure, pricing all but the very rich out of the property market entirely.

Even the price of rent is becoming unsustainable; with a shortage of several million houses in Ghana to accommodate our exploding population, landlords freely flaunt the 1966 Rent Act – which prohibits their now-routine demands for payment up-front of more than a year pay advance

By Suleiman Mustaph/Graphic Business/Ghana

Connect With Us : 0242202447 | 0551484843 | 0266361755 | 059 199 7513 |