According to Works and Housing Minister, Samuel Atta Akyea, the policy is intended to ring-fence about 30 percent of pension funds as capital for real estate developers to build houses for workers which will be purchased with a mortgage arrangement.

[contextly_sidebar id=”BEZ1r7wiPBpQDuASAoDbWXpHPj187mIL”]The cost of the buildings will be spread thinly for a ten to twenty year period.

Speaking to Citi News, the Abuakwa South MP said government is serious about tackling the housing deficit.

“We need what we call a credible mortgage system in which you can use about 30 percent of your income to service a mortgage loan but you can never get that arrangement in place unless we touch the pension fund.

“I am even submitting that we can touch the first tier, the second and the third then ring-fence about thirty percent of all the monies and give them to the bank at a very competitive administrative rates.”

NPRA, banks discussing effective mortgage system

Affordable housing is a major challenge for Ghanaians as the country’s housing deficit is estimated at about 1.7 million housing units.

In a bid to address this challenge, President Nana Addo had at the State of the Nation Address announced government’s plans of initiating policies required to drive down the cost of mortgages.

The President had disclosed that, deliberations are ongoing between the Pensions Regulatory Authority (NPRA), and banks, to design an effective mortgage system for Ghanaians.

This, he said, is aimed at making access to houses affordable for the majority of Ghanaians in the middle-income bracket.

“Discussions are ongoing between the Pensions Regulatory Authority and the banks to underwrite an effective mortgage system. This will facilitate access to housing for the ordinary Ghanaian,” he said, adding that government is also working to attract private investors into the housing industry.

President Akufo-Addo was optimistic that, creating an enabling environment for the private sector will encourage investors to channel their funds into the housing industry.

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By: Marian Ansah/citifmonline.com/Ghana

The post Credible mortgage system from pension funds coming up – Atta Akyea appeared first on Citi 97.3 FM - Relevant Radio. Always.

As a result, most of them have begun counting their losses as the continuous delay compounds their interests to be paid on loans contracted from banks.

Statistics available to Citi Business News also indicate that four out of every ten houses are occupied within a year.

In the third of our new series dubbed, Ghana’s housing crisis which focuses on the industry’s problems and how they can be solved, Pius Amihere Eduku examines the low occupancy levels among residential properties in the nation’s capital.

Click to listen to full audio report.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Ghana’s housing crisis: High supply outstrips low demand? appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Minister of Works and Housing, Samuel Atta-Akyea, said the ministry would seek Cabinet approval on a proposal to invest between 30 and 40 percent of Social Security and National Insurance Trust (SSNIT) funds in the proposed credible mortgage system to ensure that all workers had access to mortgage facilities.

[contextly_sidebar id=”9Ktph9KReTgcOHbAz2Ewrk4BGk0fag1l”]He was speaking at the celebration of the 2017 World Habitat Day in Accra on Monday under the theme “Housing policies: Affordable homes.”

The UN has designated the first Monday of October every year as World Habitat Day.

The celebration provides the platform for stakeholders and all individuals to reflect on the state of towns and cities and the right of all to adequate shelter.

It is also intended to remind the world that all citizens have the power and responsibility to help shape the future of the world’s cities and towns.

Mr. Atta-Akyea defined a credible mortgage facility as one that allowed all workers, irrespective of their salary income group, to have access to mortgage, and pay off with 30 per cent of their salaries over a period of time, in line with the international definition of affordability.

Considering the challenge of affordability and salary levels in Ghana, he said, Ghana needs a credible mortgage system, saying “that is what we are going to push for.”

He said the ministry is working hard to ensure that low and middle-income earners could access mortgage facilities and pay off with 30 percent of their salaries for an agreed duration.

“Affordable housing is uppermost in the planning of the ministry. We can never talk about affordable housing if we do not address the financing dimension of it to ensure that the low and middle-income group could access mortgage facilities.

“My investigations have established the absence of a credible mortgage system which allows the low and middle-income group to access housing loans,” he said.

He said the government, recognizing low income levels as a challenge on the demand side of housing in Ghana, had decided to focus on making affordable houses which are truly affordable through pragmatic policies such as the credible mortgage facility.

“What we do not understand is the essence of SSNIT. It is a mockery to say that someone contributed to the trust for so many years, but after pension he or she did not have a decent home of his or her own, no matter the type or how small it is, the fund can help or facilitate the purchase of a house.”

“As for SSNIT, some of its ideas are to make money, for which I don’t begrudge it at all, but it becomes unfortunate when it makes the money out of contributions by ordinary contributors but the contributors are deprived of the investments SSNIT makes,” he said.

He described the situation as diabolic and must stop with all urgency to make SSNIT more relevant to contributors.

He explained that the necessary interventions would be put in place to ensure that the interest on the mortgage loan would be pegged by the government, not through market forces, to ensure reasonable interest rate and accessibility for the target group.

Other interventions

Mr. Atta Akyea said the government is also considering alternative building technologies that could reduce the cost of decent housing to ensure that every worker had access to a decent house to meet his or her needs and financial status.

He said such technologies to be considered were wooden houses, as seen in the United States of America and other developed countries, container houses, brick houses and pre-fabricated houses.

He said the government was also considering public-private partnerships in addressing the more than 1.7 million housing deficit, as it had been established by many stakeholders that the government alone cannot address the problem.

On real estate agency practice, he said a draft policy paper expected to boost and regulate the practice, such as transactions, sale, purchase, rentals, leasing, among other objectives, is ready for approval by the Cabinet.

“Other interventions, which the government is putting in place to enhance the housing sector, include the amendment of the Rent Act to ensure that landlords and landladies charged only three months’ rent advance,” he added.

He also spoke about other measures to include the curbing of encroachment, illegal acquisition of government landed properties and the implementation of the national housing policy.

In her remarks, the United Nations Resident Coordinator, Dr. Christine Evans-Klock, said the UN team in Ghana is committed to supporting the combined and concerted efforts of Ghana to deliver decent houses for all.

She said under the leadership of the UN-Habitat, the UN supported all levels of governments in meeting their commitments under international law related to adequate housing.

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By: Philip Nii Lartey/citifmonline.com/Ghana

The post We’ll invest SSNIT funds in affordable mortgage – Atta-Akyea appeared first on Citi 97.3 FM - Relevant Radio. Always.

With one kid, this young family was thrown out of a house they believed their daughter would grow in and they would not worry about moving from one rented apartment to another.

How did it happen?

The Cedi fell sharply against the dollar, their salaries remained the same and their mortgage repayment which was in dollars grew past their salaries. They couldn’t keep up. Everything came tumbling down!

Ghana’s housing deficit has hit 1.7 million now.

To make it easier to understand, it means spreading it over a 10-year period, a minimum of 170,000 housing units would have to be built annually, according to the Ministry of Water Resources Works and Housing to make sure accommodation in Ghana is no longer a jungle for the survival of the fittest.

It certainly will be a dream to think we can achieve a fraction of this as a country. It won’t happen because the government is busy with something else it considers priority. In fact the scary and ever-increasing housing deficit has never been a priority for many governments over the past 3 decades or so.

As a friend put it, government has been “blowing its dead horns of affordable housing.”

The prices for government’s new State Housing flats at Adenta in Accra is around GH¢300,000 for a 3 bedroom house.

How about that for affordability!

The scary and bitter truth is that, the “vampires” in this unregulated housing industry will suck the vulnerable dry for a very long time to come.

Assuming you acquire a mortgage facility for about GHc240, 000 and a bank gives you a maximum of 80% with an average rate of 29%. Your income should be GH¢14,547.19 to qualify. Down payment for this house is GH¢60,000. How many people can afford this?

Don’t EVER take a dollar mortgage.

In the first quarter of 2015 alone, the Cedi depreciated by about 16% to the US dollar. In the same period last year, it depreciated by over 19%. In the entire 2014, it depreciated by more than 40%.

If you bought a facility for about $80,000 hoping to pay in 20 years, you are looking at a monthly repayment of about $937.36 (40% of net monthly income). The dollar income for this loan amount is about $2,343.15=Ghc8, 903 with an exchange rate of 3.8%. This is only the ideal situation.

With the current depreciation of the Cedi, “Play with the different exchange rates over the period and you will see how worse off the mortgagor will become. The Mortgagor can only be better off if the appreciation rate of his cedi income is perfectly matched with the rate of the cedi depreciation or the appreciation rate of the dollar,” an industry player who pleaded with anonymity said.

This however can never be the case so some banks advise that a component of your income should and must be in USD before you can qualify for a USD mortgage loan.

“Even though we are looking at giving you a place to lay your head, we are also looking at managing risk because the default rate for dollar rate for resident Ghanaians is very high. Foreclosing of properties is not pleasing to the bank. We have had people switching from USD denominated mortgages to Cedis from both externally and internally. It gets quite unbearable for the customer,“ the source noted.

Currently a two bedroom house stuck in the corner of the outskirts of the city will be between $50,000 and $120,000. According to some of these people who are in the industry; they do not even spend a quarter of that amount to build the facility. Add the risk, cost of credit, cost of the land plus litigation, they are still fleecing people but they are desperate to find a decent place to put their families.

The weakening of the Cedi against the US dollar in Ghana is like a weather pattern. It happens every year and the authorities seem to have accepted that it has to happen. The implications on businesses, imports, transportation, even the entire economy seems to be lost on them.

Don’t ever hope that the Cedi will be stable against the dollar for a long period of time. If you buy a house in dollars, in just about two years if you are lucky, the repayment plan will either double or quadruple, depending on how fast the currency falls.

Find a Cedi mortgage

The Cedi mortgage is usually hinged on interest rates. True, interest rates in Ghana are high but it’s certainly better than the dollar which can depreciate by an average of about 20% in just three months.

I have heard people say it is practically impossible to find a cedi mortgage. It is not true! Even some of the mortgage companies offer cedi mortgage but their interest rate is incredibly high too.

But look and ye shall see.

Seek and ye shall find

Reality check

Affordable housing is a mirage. There is a public sector home owner scheme between the Ministry of Finance and a bank, the maximum loan a public sector worker can get is GH¢55,000.  The interest rate for this is subsidized at 15%. Only a handful of developers participate in the delivery of homes matched to this loan amount but they build extremely basic homes.

Cedi interest rates can only go down if the government stops competing with banks for funds in the market. It is killing!

For the future outlook, it would be difficult to project but truth be told, a dollar mortgage is a bad idea, I think.

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By: Nana Boakye-Yiadom

Email: [email protected]

The post The ‘monster’ in Ghana’s dollar mortgages appeared first on Citi 97.3 FM - Relevant Radio. Always.

The group painted  the party’s regional office and other offices with graffiti in protest against the sacking of the regional minister.

Giving the details of the incident, Citi News Upper West Regional Correspondent, Latif  Mahama said “when Citi News visited the Upper West Regional Office of the NDC, the aggrieved supporters had defaced the entire building with inscriptions such as ‘No Bede, No JM’, ‘JM why Hamidu again’ ‘JM why'”

According to Latif Mahama, the situation was not different  at the Wa Central Constituency Office.

Speaking to Citi News, the Security Man at the Office, Osman Mahama said “I am a watchman here. I was in the room when I heard noise here so I came out and I saw some people destroying the properties.”

Meanwhile, Citi News’ checks at the Wa Central Police Station indicated that no arrest had been made so far.

Sources at the NDC regional executive office disclosed that the incident is the beginning of a series of demonstrations yet to hit the Wa Municipality in support of Bede Ziedeng.

The President in his recent Ministerial reshuffle, replaced Mr. Bede Ziedeng; former Minister of Upper West region with Alhaji Amin Amidu Sulemani; former Minister of Roads and Highways.

By: Marian Efe Ansah/citifmonline.com/Ghana

The post Wa NDC youth go on rampage over sacked Minister appeared first on Citi 97.3 FM - Relevant Radio. Always.

This was disclosed to the Regional Minister during a consultation meeting held in Bolgatanga in the Upper East Region.

The Chairman of the Conference of the Heads of Assisted Schools in the region, Patrick Tangoyiri said though some schools in the area have improved, indiscipline is on the increase.

“We have problems with students bringing mobile phones and causing all the problems that are associated with the use of mobile phones; looking at pornographic pictures instead of studying and when it comes to exams, they want to use their phones to whatsapp questions to their friends,” he lamented.

“The next problem is the time they pay the feeding grant. This is another problem that is affecting our work as head  teachers because when we don’t have the feeding grant, the boarding schools will not be able to open on time,” he added.

Commenting on students’ accommodation, he noted that the dormitories are crowded because the schools don’t have enough dormitory blocks for either boys or girls.

By: Marian Efe Ansah/citifmonline.com/Ghana

The post Quality of education under threat in U/E – Head Teachers appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Upper West Region is renowned for the quality of its pito– a local alcoholic beverage brewed from fermented guinea corn. All the same, there is another liquid that has also become very popular though in bizarre circumstances.

The post Upper West: Petrol sold in bottles appeared first on Citi 97.3 FM - Relevant Radio. Always.