By Kwamena Thompson

In the last few years, blocks of flats in Cantonments, Osu, Airport and other ?prime areas? have sprouted like mushroom. Thanks to a previous generous land allocation policy, houses in these areas were sitting on sizeable pieces of land.

With the industry warming up, space per unit has decreased significantly; underground parking and shoe-box swimming pools with wave generators are now de rigueur. A lot of these flats are priced between US$300,000 to US$450,000. Some with Accra Mall views are allegedly priced over US$1million.

And if you want to count the ships waiting to dock at Tema Harbour, or have organic city views, you need to go back to the drawing board. When Mr. Ofori knocked together two penthouses in 2011, I knew we were in serious business. A number of these flats have been purchased for investment purposes.

Presumably, you are able to let them out at rents ranging between US$4,000 to US$10,000 to unsuspecting foreigners attracted by Ghana?s booming economy, fuelled by ever-rising gold prices (never mind that the prices have been falling recently) and our discovery of oil.

Here?s the deal: you charge rent to cover your mortgage and service charges, have some change to support your luxury lifestyle, sit back and watch the English Premier League whilst the price doubles in four years, sell for a tidy sum and move on. Or hold them for rental income in order to keep you in the style to which you have become accustomed in your evergreen years. Last week, I was told a magnate from Nigeria had bought two blocks of flats for cash. Somebody knows something I don?t.

As the economy runs out of gas, is the bubble wobbling or about to pop? Driving through these areas, I notice quite a number of unoccupied flats. Properties that allegedly had ?a few remaining? or ?sold-out? signs are now re-advertising. Still, there are a number of developments on the drawing board, and the flat development trend has moved to East Legon. Maybe I can get on the ladder this time.

Building in Ghana will be expensive in the short-term. Excluding land and sand, everything else is imported — but rents of US$5,000 for the many? Where are the tenants coming from? With gold prices looking south, a stronger US dollar, fracking and some stability in the oil market, I can see some of the bubbles wobbling. As for popping, I don?t know.

Our housing deficit remains huge. With an average monthly household income of US$500, an average house price of US$15,000 seems like where we should be heading. But that is where culture clashes with reality. We have to accept that an average house is not three bedrooms plus a guest room, space to grow plantain, keep chicken and goats and pound fufu. An average house can be one or two rooms with some facilities shared depending on price.

The next few years will be interesting. As China, India, and Brazil slow down, there will be consequences for our economy and invariably the real-estate sector. I still see a lot of brick and mortar, wawa boards that are not re-used and a lot of other wasteful building practices.

Cost is the killer, but the consumer cannot pay. Our approach to construction has not changed since I was a child — and I am in my green years. We must begin to think of how we can make our meagre resources stretch further and further. We must think of local resources. Only by thinking outside the box in these times of quantitative easing will we be able to establish a housing industry that will clock some miles.

The writer is the CEO of Dalex Finance and Leasing Company


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