Real Estate Companies in Ghana are Operating at 30%

real estate companies in Ghana

The Daily Graphic has indicated that real estate companies in Ghana are currently operating at 30% of their capacity due to the COVID 19 pandemic. Here is the full article from the Daily Graphic.

The real estate business is at a standstill now with sales of properties at a record low, servicing of mortgages deteriorating and most developers rolling back their sleeves and packing out of sites.

The situation has led to a spike in the housing glut although official data put the national housing deficit at more than two million units.
At the receiving end is the real estate developing companies, the mortgage lenders and their individual and institutional clients, who are either struggling to service their mortgages or get market for existing properties.
Representatives of the Ghana Real Estate Developers Association (GREDA) and mortgage financiers told the GRAPHIC BUSINESS in separate interviews that demand for houses and mortgages had collapsed, following the outbreak of the raging novel Coronavirus (COVID-19) pandemic.
They said the pandemic had led to estate developers operating at a maximum capacity of 30 per cent, with more than 50 per cent of potential mortgage deals being cancelled or put on hold while the servicing of existing ones had been distorted.
They explained that the development had affected both domestic and non-resident mortgage clients and had resulted in a credible threat to the creditworthiness of the real estate companies and the individuals whose mortgages were now facing delinquency.

Imminent collapse

The President of GREDA, Mr Patrick Ebo Bonful, told the GRAPHIC BUSINESS on June 7 that beyond the liquidity strain that the virus was imposing on members, the association was troubled that the virus would worsen the plight of the developers and increase business failures in an area of the economy that was already suffering from weakened demand prior to the viral outbreak.
“It is obvious that some of the companies will go down.”
“Some of our members have already given up and when they go down, they will go down with substantial bank loans and investments,” he said.
The construction sector, of which the real estate business is a key component, accounted for 8.3 per cent of the banking sector’s loan book (GH¢45.9 billion) as of February this year.
To enable them to cope with the challenges, the GREDA President explained that majority of the member companies had already laid off their staff and left behind a skeletal size just to maintain a semblance of existence.
“It is terrible,” Mr Bonful, who manages the PS Global Estate Company, added.

Non-active demand

Like the other sectors, the current challenges from the COVID-19 are additional pains to the real estate business, where majority of their potential consumers were already wishful clients.
Although many people in the country need houses, only a handful of them have the financial power to purchase the houses, resulting in the developers being unable to find active buyers for completed and ongoing properties.
This explains why most developers complained about low sales when the country had a housing deficit that has been pegged at two million housing units, the GREDA President said.
Consequently, he said “things were not great” in the businesses prior to the emergence of the raging COVID-19 pandemic.
“Now, it is worse,” he said, citing low levels of activities within member companies.
“There is almost no activity at all in the construction sites because already, nobody was buying the stock of houses in the market prior to the disease.”
“Because of that there are defaults by the companies here and there and the banks are withdrawing credit to the sector,” he said.
He added that an internal survey found that most companies were currently operating at a maximum capacity of 30 per cent, with plans to shut down completely should the situation not improve in the coming months.

Loan book

A source at Republic Bank Ghana, who did not want to be identified, said demand for conventional mortgage had virtually collapsed, with nobody making enquiries on new deals while more than half of potential clients had asked that their transactions be put on hold.
The source said majority of the bank’s mortgage clients in the diaspora had experienced various degrees of difficulties in servicing their loans as a result of them either losing their jobs or having their salaries reduced in the wake of the virus spread.
It added that developments in the mortgage space were a credible blot to the bank’s loan book but said a six-month loan repayment moratorium that the bank introduced in March was proving helpful to both borrowers and the lender.

Source: The Daily Graphic

READ ALSO: Top 30 Real Estate Companies in Ghana

Share with a friend

Related posts

mortgage housing

Government to Partner BOG for Affordable Mortgages

  • 29 October, 2020
  • News

Finance Minister, Ken Ofori-Atta says government will work with the Bank of Ghana to introduced special-priced mortgages as part of efforts to bridge the housing deficit.

READ…

Share with a friend
Read More

Real Estate Agency Bill, 2020

Parliament Passes the Real Estate Agency Bill, 2020: What You Need to Know

Great news for the general public and real estate industry players: The Real Estate Agency Bill has been passed by Parliament!

The Ghana…

Share with a friend
Read More

borteyman affordable housing

Affordable Housing Scheme in Ghana to be revived with 200 Units annually

  • 23 October, 2020
  • News

The government has revived the affordable housing scheme to deliver at least 200 housing units for public sector workers annually in a…

Share with a friend
Read More

Join The Discussion

Search

October 2020

  • M
  • T
  • W
  • T
  • F
  • S
  • S
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31

November 2020

  • M
  • T
  • W
  • T
  • F
  • S
  • S
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
0 Adults
0 Children
Pets
Size
Price

Compare listings

Compare