[ 2016-11-14 ]

Mortgage houses dismiss report on low demand for home loans
Information available to Citi Business News
indicate that demand for home loans from mortgage
houses has not declined despite a drop in home
loan application from commercial banks.

Though the mortgage houses admit not all
applications may be granted at any particular
point in time, they contend demand is still
satisfactory.

“There is a demand side and a supply side to the
transaction; the former refers to the number of
people who want mortgages or who want to own a
property and that is not our observation; we see
sustained demand,” the Chief Operating Officer
at Ghana Home Loans Limited, Kojo Addo Kufuor
stated.

A recent report by the Bank of Ghana (BoG) shows
that demand for mortgages has declined this year
despite an ease of access to credit by commercial
banks.

Demand for mortgage loans hit about minus 5
percent in net percentage in July 2016; the lowest
demand recorded within eight months from December
2015.

The figure also reduced between December 2015 and
February 2016 hovering between minus 3 percent and
minus 1 percent.

It however picked up in March this year inching up
to about 4 net percentage points in April, 2016.

Some bankers have attributed this to the slowdown
in the economy and weak purchasing power among
Ghanaians.

But Mr. Addo Kufuor explains to Citi Business News
the slow pace of activities are rather associated
with supply challenges as well as other factors
facilitating the disbursement of mortgage loans.

“The other side regarding supply is whether
there are properties available on the market, how
quickly could a developer deliver that property to
customers…it rather takes too long for
developers to bring houses to the market.”

Meanwhile he is also hopeful prices could reduce
to attract more potential home buyers when
supplies are increased just as to meet the
demand.

“We focus more on the supply side for the market
because once that is done in a meaningful scale,
it will make the demand side come back on track
because people will be able to afford it. More
supplies will also mean prices will normalize and
it moves from there,” Kojo Addo Kufuor added.

Some of the factors that have however accounted
for the apparent delay in mortgage disbursement
include; income levels, the introduction of the
credit reference bureau, as well as the a
requirement that side plans of houses are
presented to the survey department for them to be
bar coded before processing.

Source - Citifmonline

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