A new housing scheme christened ‘Decent Homes, Better Life’, that is designed to provide decent and affordable housing to bridge the large housing deficit in the country has begun, Finance Minister Ken Ofori-Atta has said.
Presenting the Mid-Year Fiscal Policy Review of the 2019 Budget Statement and Economic Policy & Supplementary Estimates of the Government of Ghana, Mr. Ofori-Atta said funds have been released to three participating Banks – GCB Bank Limited, Stanbic Bank and Republic Bank – to commence the Housing and Mortgage Finance Scheme’s pilot phase.
Public and civil servants are expected to be the first beneficiaries under the ‘Decent Homes, Better Life’ housing initiative.
“Mr. Speaker, I am happy to announce that two schemes – the National Housing & Mortgage Scheme (NHMS) and Affordable Housing Real Estate Investment Trusts (REITs) – under our ‘Decent Homes, Better Life’ initiative have commenced. This initiative will provide quality affordable housing for Ghanaians, starting with public and civil servants,” he said.
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 probably more – with an annual growth of 70,000 housing units.
With a housing deficit of 1.7 million, the country needs to provide about 170,000 homes annually for the next 10 years in order to bridge the existing gap.
Many people are homeless, or live in inadequate shelters they call home, in large urban centres and many commercial districts of the country.
The Ghana Real Estate Developers Association (GREDA) estimates that about 50% of Ghanaians are living in sub-standard housing and various unsuitable structures.
Various sources estimate that Ghana’s population could reach 32.2million people in 2020, with about 57 percent living in urban communities.
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 (or lacking) housing polices.
Indeed, an Institute for Statistical Social and Economic Research (ISSER) report early last year cited the lack of a coherent plan and short-sightedness of policymakers as the main causes of housing challenges facing the country.
Barring a measly attempt by successive governments over the past two decades to address the housing deficit, governments have largely been bystanders in the efforts to house their own people.
Mr. Ofori-Atta, however, has in the Mid-Year Budget review announced a comprehensive plan to address the housing challenges.
“Government has started the National Housing and Mortgage Finance Initiative. The objective of this initiative – ‘Decent Homes, Better Life’ – is to provide quality housing to all citizens starting with public and civil servants. Two of the schemes under this Initiative, the National Housing and Mortgage Scheme (NHMS) and Affordable Housing Real Estate Investment Trusts (REITs), have commenced.
“Mr. Speaker, under the NHMS, funds have been released to three participating Banks (GCB Bank Limited, Stanbic Bank and Republic Bank) to commence the pilot phase of the Housing and Mortgage Finance Scheme. The NHMS in collaboration with the Ministry of Employment and Labour Relations is building a pipeline of potential home owners to participate in the scheme,” he said.
Hard-working Ghanaians who are not able to pay outright for decent houses under the ‘Decent Homes, Better Life’ initiative, the Finance Minister announced, can benefit under the Affordable Housing Real Estate Investment Trusts (REITs) through a rent-to-own arrangement.
“Mr. Speaker, government is also intervening in the housing market through Affordable Housing Real Estate Investment Trusts (REITs) to serve as a vehicle for rent-to-own schemes. The intention is for the REITs to buy properties and lease to public sector workers over an extended time and sell at predetermined values.
“The rental payments will count as equity; this will help new entrants into the workforce own properties without the initial huge down payment. Work on the REITs has started in earnest with GCB Securities, a subsidiary of GCB Bank,” he said.