BY MUNTALLA INUSAH & PRINCE ESSIEN
THE EXECUTIVE Chairman of JL Properties Limited, Dr James Orleans Lindsay, has said most Ghanaians cannot buy so-called affordable houses now because of low incomes.
Mr Lindsay said this in reaction to some views expressed by the President of Ghana Real Estate Development Association (GREDA), Mr Patrick Ebo Bonful, when members of the association paid a working visit to Mr Lindsay’s outfit in Accra last Friday as part of GREDA Executive Council’s mission to visit members to interact with them to find out their challenges and what could be done together to make lives better.
Mr Bonful, in proffering some suggestions that could help estate developers sell their houses, said the association was trying to champion the idea of the module package to attract people to buy houses in addition to calling for the review of the mortgage law
“We will do our best to sell, but you and I know that for every significant sale to happen, you will need a module package.
“We also hope to get the mortgage period extended beyond 15 years to 30 years so that the monthly payment will be more flexible and affordable and more people can come and qualify and patronize the houses.
“I have said and I will keep saying that we need realistic mortgages at very good interest rates, at 12% for the cedi and so on”, he said.
In his counter-view, Mr Lindsay said, “I have a different view front what my president is saying. As it stands now, we cannot do affordable housing. We need to be frank and hit it right on the head. We can’t. Until such times that the lower to upper middle class has expanded, until such time that there is more money in the system, developers like GREDA association will not be able to do affordable housing, because you ask yourself, how affordable is affordable?
“A trained teacher gets a GHc1,400 per month, a trained nurse gets GHc1,200 a month and the definition of affordable is a house that you will not use more than 30% of your income to finance. Nobody is going to take GHc400 as a mortgage payment in a month,” the Executive Chairman JL Properties explained.
He said many real estate houses had been constructed by developers and left at the mercy of the developers all because Ghanaians can’t afford them, adding that the country had failed to deal appropriately with housing challenges over the years.
“If you join forces, it will not work. So we need to look at it holistically, the government need to sit down, then decide that they are going to set aside a certain fund for real estate or housing fund, to start with to fund homes for government employees. Once a parson has a house, he has something that he can built wealth on and you will say 0% interest. Then you create a certain amount of wealth in the system..
“In Ghana, we have over-emphasized owning houses and that is becoming a burden to some. Most Ghanaians cannot afford to buy houses. When you speak to real estate developers, you’ll get to understand that most of the houses are not sold because people cannot afford to buy them. We’ve been having housing deficits a long time ago. We have been unable to control it,” Dr Lindsey explained.
While supporting Mr Lindsay’s position, the GREDA president said complaints from the housing market were bad in that “Those giving the mortages are also saying that when they give the mortgage to people, they default it and they [the givers] find it difficult to recover their houses.”
Mr Bonful added that although GREDA had been championing the idea of recovering of properties, it had also sent a proposal to the government since November last year to have the mortgages law reviewed to reflect best international practices in terms of recovery and protection.
“We want the law to be quick in protecting us from defaulting customers and not what is happening now. In Europe, it takes short time to recover properties as soon as you default. We have also stressed that as it stands now there is room for lawyers to play around, so we want a stand-alone law for the whole mortgage finance to draw the law down,” he said
He added that the Executive Council of GREDA was trying to do this so that their members could get mortgages that are good for their business and give protection to developers.
Land acquisition and Litigation
The GREDA president said that developers needed to be protected in a situation where a land had been bought or sold to developers by families and other chiefs come to demand or claim ownership.
“We are suggesting for the land acquisition bid. If government can go ahead and move away from the existing system where a person retrieves and sells lands on their own behalf.”
The president made a passionate appeal to the government to consider registering the lands for the individual and take portion of those registered lands as feed so that the developers will in turn buy it directly from government for their projects.