Housing deficit a growing concern

Ghana's rapid population growth, urbanisation and economic development have led to a severe housing challenge.

And it has been more pronounced by a significant shortage of affordable housing units, high prices of land and building materials. The country’s population has grown from 24.6 million in 2010 to 30.8 million in 2021, representing a 25 per cent increase.

However, the nation’s housing stock has not kept pace with the growing population, resulting in an estimated deficit of almost three million housing units.

This deficit is particularly pronounced in urban areas such as Accra, Kumasi and Tamale, where the demand for housing far exceeds the available supply.

For us, the barrier to housing accessibility is often linked to the difficulties in the acquisition of land in these urban settlements, which make single-family housing expensive.

The issue can be more complex as urban plans are poorly implemented, infrastructure is stretched and land is often unavailable. These issues make serviced, well-located and titled land prohibitively expensive, forcing households to live in precarious areas without access to safe drinking water or security of tenure.

The high cost of housing is a significant barrier to homeownership for many Ghanaians. The average price of a two-bedroom house in Accra is around GH¢500,000, which is out of reach for many low- and middle-income households. Additionally, high interest rates and limited access to mortgage financing make it difficult for many citizens to access the housing market.

The Daily Graphic, therefore, agrees with the call by the President of the Ghana Real Estate Developers Association (GREDA), Patrick Ebo Bonful, for a reduction in Value Added Tax (VAT) on the real estate sector.

At the launch of the Graphic-GREDA Housing Fair in Accra, Mr Bonful said the industry was facing challenging times, and that removing the five per cent VAT would provide much-needed relief.

"Our industry is going through a tough time and it is our only wish that we could get some bailout from somewhere, from government especially, if we could do away with the five per cent VAT that has been imposed on real estate.

It is only making the matter more difficult. We humbly plead that they do so, and they do it expeditiously," he said. He argued that reducing the VAT on real estate would stimulate growth and benefit both developers and buyers.

It is a fact known to all that the challenges in the real estate sector are further fuelled by poor urban planning and regulation, leading to inefficient land use and uncontrolled development.

Again, limited access to affordable land and infrastructure makes it difficult to develop new housing projects. Other challenges include inadequate financing options for low- and middle-income households, limited availability of affordable housing materials and high construction costs due to imported materials and labour shortages.

o address the housing affordability challenge, policymakers must adopt a comprehensive approach that addresses the root causes of the problem. Indeed, the government, private sector and civil society must work together to increase the supply of affordable housing units through initiatives such as subsidies, tax incentives and public-private partnerships.

We must also work to implement effective urban planning and regulation to ensure efficient land use and access to affordable housing while improving access to financing and credit for low- and middle-income households.

Encouraging community-led housing initiatives and cooperative housing models and implementing rent control measures to protect tenants from exorbitant rent increases can also help address the issue.

The government must also provide support for informal settlement upgrading and slum rehabilitation programmes. The housing challenge requires a comprehensive and multi-faceted approach that addresses the root causes of the problem.

By working together and implementing these solutions, Ghana can ensure that all citizens have access to safe, affordable and decent housing, in order to build a more equitable and prosperous society for all.