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Stephen Debrah-Ablormeti is the Chief Executive Officer of Construction Planners Limited and he has been in the real estate industry for the past 14 years. He gives more insight into the real estate sector in Ghana today.
Jumia House Ghana (GH): Tell us about Construction Planners Limited(CPL)?
Stephen Debra-Ablormeti (S): CPL is a real estate development company that focuses on middle to high earned property development in some parts of the capital – Accra. We have two main target of market – middle and high income earners.
GH: How will you characterise the real estate market in Ghana?
S: The real estate market is doing well. It’s not bad even though it’s not the best. It’s doing pretty well. We are getting most of the things right. Gone are the days properties were not constructed with the proper infrastructure but we are getting there day-by-day.
GH: You have been working in the sector for the past 14 years. Has there been a revolution in the industry?
S: In general, there has been a lot of changes in the real estate market. We have seen a lot of industry players coming in and developing various segments and pitches, in terms of property types, location and prices of property, starting from as low as you think to very high prices.The market is a little volatile,though, with a lot of constraints here and there.
GH: Which opportunities do you identify in the real estate sector in Ghana?
S: I think a lot of opportunities are emerging here in Ghana. We all know about the oil and gas industry which is bringing in investors and we need to provide them with adequate accommodation, so that is really expanding the market.
In the past four years we have seen property investment companies trooping in from other countries to Ghana, getting good locations to put up properties. That is an indication that the property market is getting better and opportunities are numerous. In other countries you rarely see major expansions in an industry in a very short period so it’s a good indicator of the available opportunities.
GH:What are some of the problems facing the industry currently?
S: The problems in the industry cut across four areas and the first one has got to do with the land acquisition process. In Ghana, you can buy a piece of land from as many as four owners just because of litigation issues, which I think it’s not not good for the industry.
Secondly, the government’s nonchalance in assisting property developers in acquiring basic infrastructure, like roads, electricity, etc. I think infrastructure is not supposed to be put together by property developers, this is supposed to be put together by government but in Ghana, all these fall on the shoulders of property developers. At the end of the day, the price of the property goes up and developers are forced to pass the cost to customers which I think is a major problem that I think we need to be working our way to get out of the system. When you compare the property market in Dubai, you realise that all infrastructure is put together by the government so all that the developer does is to put up the property, so the homebuyers at Dubai do not pay for infrastructure, they only pay for the building.
Thirdly, there are more short-term loan facilities in the sector for developers. We all know that properties are not something you can gain over night. They have very long gestation periods where you have to sit back for six to 24 months to get it ready for the market. If you have a facility that elapses in 360 days, you could see yourself in default and you’ve got to think of the 30% interest you’ve got to pay on the loan.
Finally, there are property turn-overs in terms of spillage in properties. If you have a property which has been on the market for some time, it falls off and it becomes difficult for developers to sell them. Elsewhere, we have off-takers which could be the government, who set strategic mortgage prices. They take over every property you develop and turn it over so in that case if you are property developer, you do not need to worry about your property falling off.
GH:What are some of the solutions to the problem you have identified in the sector?
S: The first thing the government should do is to put measures in place to bring down property prices because when that is done, it is going to bring down the developers’ prices.
Government should also make mortgages available across commercial banks. They should try to meet the banks half-way in order for the banks to be able to provide mortgages to Ghanaians for them to buy properties. This will reduce turnovers and spills, and it will help developers to go ahead to roll out lot of new projects.
And the final one has got to do with sensitizing the land commission and getting the people there to be proactive in issuing landowners with proper documentation.
More about CPL
S: At CPL, we do not just run the business to make money in the industry, but we ensure we do the right thing by using the right materials and building our properties to the right specifications. Buyers who are occupying our properties in Cantonments, Airport Residential Area, East Legon Hill can attest to the fact that our properties are built to international standard. They can be compared to any property across the world in terms of their quality. We are currently working towards moving out of Accra to places like the Volta and Ashanti Regions to serve the needs of people in these areas.