Though plagued by a number of challenges from lack of financing to unclear land claims to high interest rates, Ghana’s real estate market is now poised to show significant growth as both a rise in the standard of living and the demand for housing coincide.
The country is currently registering a gap between demand and available housing that experts calculate at nearly a million units, indicating that roughly 60% of the national housing requirements are currently unmet. Now, as new oil wealth begins to flood into the country, this demand is set to coincide with a population that boasts growing purchasing power.
Local real estate developer Manet
Homes will be well situated to benefit from this growth. After more than a decade of filling the low-income housing segment in Accra, and with a track record of more than 1,000 housing units constructed at various residential communities, the company has positioned itself at the top of its field.
In addition to providing the opportunity to buy a home for families that may not have otherwise had the chance, Manet’s developments, which include Manet Cottage, Manet Gardens, Manet Ville, Manet Palms and Manet Court, have proven to bring real value to homeowners, appreciating 100% roughly every five years, thus contributing to wealth building and the gradual rise of Ghana’s middle class.
The company’s efforts and dedication have brought it industry recognition with a collection of notable awards such as the Ghana Real Estate Developers Association’s Award for Best Developer (1998) and the Millennium Excellence Award – Shelter Category (1999).
Today, in addition to Manet Homes, Manet Group also comprises the Manet Paradise Hotel in the coastal resort of Ada (now being refurbished), a civil engineering and construction firm, and commercial office properties. This year, in addition to the official opening of its Ada resort and various residential projects, the group will begin construction on a US$22-million twin office complex in Accra.
|manet’s various developments have proven good investments, appreciating 100% roughly every five years or so|
Group president Dr. Theresa Oppong-Beeko says that it has not always been easy establishing her company at the top of the Ghanaian real estate industry, and she is critical of the government’s recent US$10-billion housing deal with South Korea’s STX Group, which will see that company construct 200,000 homes in Ghana by 2015.
As part of the deal, the Ghanaian government has provided free land, access to bonds to help fund lower interest rates, and marketing and infrastructure support. It has also pledged to buy 45% of the homes at US$50,000 each. These are incentives that Dr. Oppong-Beeko finds ‘shocking’, given the challenges that Ghanaian developers have faced unaided over the years as they struggled to build up the country’s market, including lack of access to long-term financing, considerable red tape in processing land title documents, and high interest rates.
“For the past 15 years, private individual real estate companies have built all their estates without any assistance from the government. We have had to work with very high interest rates, sometimes as high as 48%,” she explains.
“We have had land issues and court problems left and right. We have been forced to buy the same land three or four times just to have peace, and build. We have had to do all this on our own without any help. You can imagine how we feel, not having been offered assistance by the government, hearing about the STX deal and the land provided by the government.”
Dr. Oppong-Beeko says the industry needs a new government policy that will help companies with access to long-term financing and which will address the backlog in land titles as these are the most pressing issues facing the industry today. If the government can address these two facets, Ghana’s real estate developers can “handle the rest.”
She adds, “Ghana does not have a shortage of medium to high-end homes. It has a shortage of low-income housing. I have produced US$25,000 homes with my own resources. If I had the kind of support the government is offering in the STX deal, I could do a lot more. We could fill the home shortage with low-income housing developments.”
Dr. Theresa Oppong-beeko:
Cheking to see if the
Arterial toll road-Phase 1 started construction from Kumasi-Accra roadway in Ghana? Will there be land available for low-income housing? What is the STX deal? I have a client with a funding source. email@example.com, New York Corporate Realty.