Executive Secretary of Ghana Real Estate Developers Association (GREDA), Samuel Amegayibor, has revealed that Ghana’s housing market is beset with high cost of materials for building.
According to him, the country’s housing market is still bearing the brunt of the pandemic’s impact coupled with high freight charges at the ports. Mr Amegayibor indicated that developers are still feeling some of the shocks as a result of these variables.
“The prices of materials have surged high lately. If you look at material such as iron rods, cement and most of the major materials that we import especially. Because of the freight charges… most of us are paying a lot more for the building materials than we used to pay for since COVID. Already we are feeling it and iron rods went up by over 40% as at early last year and we haven’t seen any adjustment or any effect of anything that is going to bring the cost down at the moment”.
Samuel Amegayibor
Mr Amegayibor explained that the Association, to address the issue, has had stakeholder engagement with “government officials” and meetings with parliamentarians to discuss how best the challenges can be resolved.
“But I’m not aware of measures or strategies that have been put in place to bring these prices down as we speak”.
Samuel Amegayibor
Commenting on the impact of the high cost of materials on housing estimate and pricing, Mr Amegayibor expressed that the percentage increment of houses is dependent on “what the effects are”. He explained that materials for instance, constitutes the percentage for the price build-up for every developer.
“So, the effect of that will be calculated based on that and all the others also. For example, the electricity, even though it’s a small marking compared to the ones that we know, it will have some impact. So, every developer is going to look at the various price build-upon items and see where the cost increment is and then do the corresponding adjustment to it”.
Samuel Amegayibor
Impact of ECG service charges on housing industry
The Electricity Company of Ghana in January announced an increase in charges for consumers effective Tuesday, February 1, 2022. Contained in a statement, it indicated that among ECG staff, the company, is now charging GH¢1, 020.00 for a single phase meter, instead of the existing GH¢400.00.
Commenting on the impact of ECG’s increased service charge on the price of rent and sale of houses, Mr Amegayibor intimated that its impact in terms of its significance, may not be “too much” for developers to bear. He noted that although most of the Association’s developers believe the charges are high, they insist it may not significantly affect them.
That notwithstanding Executive Secretary of GREDA disclosed that if there is any increment in production, whatever product we are dealing with, if there’s any cost in the total cost of products during production, it has some “marginal effect” on the product.
“But because it is one of the expenditures, it may be managed. The honest truth also is that, when I did my check, most of them told me that in actual fact, they’ve been paying even more than this amount to subcontractors of ECG to get their connections done. You know ECG has some subcontractors who have been given the mandate to help in these connections. But some of them are either extorting or charging more than the regular fees”.
Samuel Amegayibor
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