President Nana Addo Dankwa Akufo-Addo yesterday opened a GH¢45-million estate at Tema Community 22 for nurses and teachers in the community.
The estate, constructed over a nine-month period, comprises a total of 204 housing units, made up of one- and two-bedroom standard and expandable units.
The estate, which forms part of the government’s National Mortgage and Housing Finance Initiative (NMHFI), has water, electricity and drainage systems as well a road network.
The NMHFI scheme, which was two-fold — the National Mortgage Scheme and the Affordable Housing Real Estate Investment Trusts (REITs) Rent-to-own Scheme — was aimed at addressing the deficit in and challenges associated with affordable home ownership in the country.
The President said the goal of the scheme was to stimulate the local currency mortgage finance market and provide decent and affordable housing to the “ordinary Ghanaian”.
He reckoned that home ownership in the country was bedevilled with a myriad of challenges, including lack of adequate long-term funding, high cost of capital and high non-performing mortgage loans.
Additionally, the recent introduction of new banking sector regulations, and high interest rate on mortgage systems had led to the reduction in appetite for mortgage loans, making it more difficult for individuals to own homes through mortgage, he said.
All these, according to the President, had culminated in the approval of the NMHFI scheme in 2018 to address the demand side of the challenges facing lower- and middle-income earners in relation to home ownership.
The President said, “Under the National Mortgage Scheme, mortgages are being underwritten within the range of 10 to 12 per cent by the participating banks, namely GCB Bank, Standard Bank and the Republic Bank respectively.
“This intervention has reduced mortgage rate by over 60 per cent, compared to the average market rate of some 28 per cent.”
The President further stated that the affordable rent-to-own scheme was meant to promote housing ownership with a monthly payment of rates up to a period when the occupants would have the option to own the housing units.
He indicated that the rent-to-own scheme would eliminate two-year rent advance payment system, an intervention designed to give lower-income workers the opportunity to rent and eventually own homes.
Beyond the current projects, the President said, the government intended to scale up the initiative across all districts in the country to promote massive local residential home ownership by Ghanaians during his next tenure of administration.
Meanwhile, the Finance Minister has disclosed that the country’s housing deficit stood at two million as of 2019, implying that it required the provision of about 200,000 homes annually for the next decade to clear it in order not to compound the situation.
He, however, indicated that the government was committed to bridging this gap and had, therefore, provided one billion Cedis to replicate the scheme in other parts of the country in the coming months.
He reckoned that although successive governments had implemented various schemes to address the housing deficit in the country and propel economic growth, often they were not sustainable due to the lack of plans to follow the projects through from one administration to another.
He said the government had, therefore, developed a more sustainable framework which engaged private sector players, including banks, insurance and mortgage finance companies, to effectively cooperate and work together for progress.
Mr Ofori Atta announced that public sector workers, following the opening of the homes, could apply for the mortgage from the GCB Bank within a price range of GH¢170,000 to GH¢210,000 over a period to be stipulated by the bank.
The Minister of Works and Housing, Samuel Atta Akyea, said the housing project developed by the Tema Development Corporation (TDC) would be a “game changer” in housing ownership in the country.
FROM FRANCIS NTOW, TEMA
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