By Bernard Yaw ASHIADEY

The real-estate sector in the country is growing, but its potential cannot be fully realised unless bottlenecks are tackled, Andy Asamoah, A&C Development Company Limited Chief Executive Officer, has said.

He cited the difficulties in obtaining funds to undertake developments, conventions governing mortgages, and the acquisitions of land to undertake developments as the major factors dampening growth of the industry.

Mr. Asamoah said real-estate requires long-term finance, such as 15-20 years — but local banks are not prepared to give facilities beyond five years.

?It is not easy. You go to the bank today and you want GH?20million for a project and they want you to pay back in five years. That is one of the problems.

When we are able to access long-term financing, we can solve part of the housing deficit problem.?

Mr. Asamoah said it is becoming increasingly difficult to acquire large tracts of land to undertake major real-estate developments, adding that easy access to land reduces the cost of construction and price of the finished facility.

He added that he prefers a situation whereby government has control of all lands to help ease the acquisition of lands by real-estate developers and large-scale farmers.

?In Ghana, the government has not taken over all the lands in the country. The land still belongs to the chiefs, individuals and families; therefore acquiring big tracts of land is a major problem,? Mr. Asamoah said.

Citing the case of Nigeria as an example, he noted that with the Land Use Act, the government of Nigeria controls all lands and allocates them to developers and businesses that need them.

?If you are a chief who oversees a land, all that the government does is to sell the land and give the chief and his people compensation — but the chief has no right to sell the land directly.

?But in Ghana, the opposite is what is happening. Chiefs sell land and the government can do nothing about the situation. Once you go to the lands registry and you can prove that it belongs to you, you can sell it.

?In certain countries, all that you need is your plan and how to go about the development and then land will be allocated to you.?

Mr. Asamoah also said the convention governing mortgages in the country, whereby a lender can only foreclose a piece of property by the order of a court, is not in the interest of banks and mortgage lenders.

?In most countries, once you give or mortgage your property to a bank for a loan or facility, the interest in the property goes directly to the bank. So if you do not fulfil the condition of the loan, the bank has every right to possess the house. But in Ghana, even though you have given your house as collateral, the bank can never sell your house until it goes to a court to get an order to sell. The system therefore favours the individual home owner. So looking at all these issues, the banks are not ready to give out loans.?

The A&C Square owner also worries about excessive government borrowing domestically, which is crowding out private sector borrowers.
?If the government, which has sovereign guarantee, takes money from me and gives me 20 percent, why should I give the money to an individual for a business that may or may not survive? And on top of that I have to go to court and pay high legal fees before I can collect my money when there is a default.

?All these things account for what is happening to us. If the government does not go for loans, then the banks have to find a way to give loans to people because that is the work they are supposed to do.?

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