Business News of Wednesday, 18 February 2015
Source: Graphic Online
The Chief Operating Officer of Ghana Home Loans (GHL), Mr Kojo Addo- Kufuor, has said the inability of developers to meet the excessive demand for housing units in the country has heightened the potential for fraud and non-performance on the part of brokers/agents in the real estate sector.
According to him, most people were eager to own homes and as such tend to settle for any offer they get from land retailers and developers, most of whom are not genuine.
“Due to the excessive demand, land retailers and developer as well as financiers have emerged. As a result, there is the potential for fraud and non-performance. There is that eager demand, but there is no shortcut way to get it,” he explained.
He spoke to the paper on the sidelines of a capacity building workshop organised by the mortgage finance company for journalists in Accra on February 12.
The training was to equip journalists with essential knowledge to improve their understanding of mortgage products and to better inform the public about them.
Many estate developers and land retailers have sprung up recently in the country making all manner of offers to unsuspecting potential home owners.
Many have fallen prey to such characters after dolling out huge sums to these land retailers while others also pay for the land, either in full or instalments only to be denied what should be their property.
Mr Addo-Kufuor said currently there was a lot more demand than supply adding that, “If you look at the nature of the demography of the country there is more demand. We have more people coming out of universities; there are over 1.6 million people out there looking for accommodation against a supply which is not more than 50,000 units a year.”
That, he said was a huge mismatch between what was being supplied by the developers and individuals in various forms of construction.
On what could be done to address the shortfall, he said, “the answer is more of a supply deficit, which calls for more construction funding. Supply is a function of construction funding. The more people are able to access this fund, the more they are able to build. It is all about volumes because we need thousands of units.”
Aside the demand and supply dynamics resulting in fraud, he also explained that it has contributed to price inflation in the sector.
“Price inflation is as a result of demand and supply dynamics; more demand, less supply, prices go up. But at some point that will correct itself when more supply comes on. And what we expect to see is a flight for quality because of more demand and less supply, more people are settling for just anything. But at sometime supply might come and people will therefore want to get more quality units as opposed to what they have to accommodate now.”
When asked if the Ghana Infrastructure Investment Fund could help the real estate sector, he said, “I suspect that if the mandate of that fund is to provide infrastructure then it should go a long way in help the supply of units. Such funds are needed to provide road network, drainage system and all facilities that are needed to make the outer area habitable. That should help because I cannot see it not helping.”