Ghana is jointly ranked 12th with Madagascar, out of 50 countries on the African continent with the high mortgage interest rate in acquiring a house, the 2021 Centre for Affordable Housing Finance in Africa Report has revealed.
This is coming despite the cost of a standard 2 bedroom house in Ghana is about $30,000, and as a result places the country in the 23rd position with the cheapest price of housing on the continent.
However, the report said the prevailing mortgage interest rate in Ghana presently is about 17.5% on the average, and ranks it among African countries with the expensive bank loan to purchase a house.
Though interest rate on housing financing increased from about 29% in 2018 to 33% in 2019, it has since fallen consistently in 2020 and 2021.
The report further said while developers are increasingly recognising the need to make more affordable housing, the scale at which they’re delivering is insufficient to meet the potential scale of demand.
“So, while developers are increasingly recognizing the need to make more affordable housing, the scale at which they’re delivering is insufficient to meet the potential scale of demand. At the same time, the capacity of the demand to access supply is curtailed – finance is expensive, and often inaccessible to the lower income earners at whom affordable housing is targeted, given the informal nature of their employment.”
“Meanwhile, the capacity of the state to step in and fix it, providing land, infrastructure, or other subsidies to assist households overcome affordability constraints, or expediting development processes to enable housing investment, is more constrained than it ever has been”, it said.
Presently, the housing deficit in the country stands at about two million housing units.
In West Africa, Ghana trailed The Gambia and Sierra Leone who are placed 1st and 2nd respectively. However, Zimbabwe is ranked 1st with the expensive mortgage financing in Africa followed by Zambia and Angola in the 2nd and 3rd positions respectively.