WHO HAS THE LEGAL RIGHT TO SELL REAL ESTATE IN GHANA?

Some practitioners operating in the Ghana Real Estate Industry have expressed dislike on their non-involvement in the drafting of the real estate bill. “WHERE IS THE DRAFT BILL? Why is it under the carpet? Ghanaians and stakeholder in the industry need to study this Bill. This is Democracy right? Why is the draft circulating amongst few selected members of GhiS?” Mr. Diawudeen, a member of the Real Estate professional group questioned in an interview i had with him.

Other Ghanaians who had their training and practiced real estate outside Ghana also searched their thoughts and the subject and they believe that real licensing in Ghana is the way forward.

“I believe that the Ghana market could benefit greatly from the development of licensing for Real Estate Practitioners: Agents, Brokers, etc”. Here are some random thoughts on how to move this forward: Partnership with a US-based Real Estate Association (say, State of Maryland) for assistance in developing the following, among others: Legislative Agenda (to help develop legislative support); Institutional Development for Ghana Association; Development of Membership Rules and Regulation, and Code of Ethics; Training & Development for New Licensees; Licensing Examinations; Membership Programs, Development of Multiple Listing System; Etc., etc”. Mr. E.K Torkornoo shared with me on his social media.

The Real Estate Agency Bill is a private members bill initiated by the Ghana Institution of Surveyors (GhiS) somewhere in 2000 or earlier and it seeks to regulate and restore sanity in the Ghana Real Estate brokerage industry. For now the Ghana Institution of Surveyors (Valuation and Estate Survey division) is the sort of formally recognized body in charge of regulating the real estate practitioners in Ghana. But as it has no legislative backing, they can only regulate their members and anyone who claims to be a real estate practitioner would not have to bother themselves about their rules and regulations if they are non-members.

The institution already has most (if not at) of the concerns raised by Mr. E.K Torkornoo in place; a very detailed code of ethics, rigorous training program and high ethical standards and now managed to get the bill through cabinet and is more probably than not, that it would be approve soon. If passed, the law would require that only members of the Institution can legally practice as surveyors, estate agents or anyone engage in the buying or letting or any such activity on behalf of a client.

The Ghana Real Estate Professional Association on other hand believes that the GhiS now want to constitute itself into a defacto monopoly. They are of the view that if the Real Estate Agency Bill should become law, then it will have a legal backing which will make it both the only recognized professional body and the licensing authority at the same time. Investing such powers would not only lead to abuse and inefficiencies but would be of detrimental consequences to the burgeoning real estate industry.

“The bill is currently at Cabinet level, and even at the Cabinet level we have gone very far so the next moment it will go to Parliament.

“At the Cabinet it can take some time; if it doesn’t even happen this year, I’m sure early next year it will come to Parliament,” Information coming from the office of the Director of Works and Housing.

Very soon the bill will be out in the public domain and everybody will know who is qualified to sell real estate in Ghana. Register with www.grepconnect.com for more happenings within the ghana real estate industry.

Over 70% of workers not likely to ever own a home - How accurate is this?

Writing this small piece will give the public its first chance to learn from the real estate professionals in the country. When i use the phrase "Real Estate Professionals", i meant certified, skilled and qualified practitioners who understand the space market very well. This article is also not meant to defy or raze the report by the Housing Data Center, however it seeks to evaluate the accuracy of their research with respect to real estate space market.

The Housing Data Center on the 6 May, 2014 reported that Salaried workers who plan to buy a home but whose incomes fall below GHC 4, 000 may have to find a way to increase their salaries or switch to jobs that will boost their earnings. This is because, the latest report on the real estate industry has revealed that workers whose salaries fall below GHC 4,000 may be unable to qualify for a mortgage. 

I don't want to discuss mortgages in this article, simply because we don't have a vibrant mortgage market in Ghana. I am of the view that both primary and secondary mortgage markets are not functioning properly in Ghana. The primary mortgage market is the market where borrowers and mortgage originators come together to negotiate terms and effectuate mortgage transactions. Mortgage brokers, mortgage bankers, credit unions and banks are all part of the primary mortgage market. After being originated in the primary mortgage market, most mortgages are sold into the secondary mortgage market. These two markets are not functioning in Ghana. Most Ghanaians do not rely on mortgages. They save money to acquire a piece of land and  build in phases till completion without worrying about time lag in construction. Mortgage already is not the thing of the Ghana man. The average Ghanaian does not care how much he earns before he starts building. They save towards it and that is how it has been till today.

In the real estate industry, information rest with the brokers or the brokerage firm. Brokers have a way of managing their business. They keep records of how much a deal was closed in a particular location. This information give them a fair idea on who much a particular property type within a particular geographical location may cost. That price at which both the buyer and the seller agreed on is what we term as Actual/Nominal Price. What you see on the listing, quoted by the property owner/ his agent is the Asking Price. In real estate we use the Actual Price in our analysis and not the asking price. Example a property can be listed for rent at 5000GHC per month and may closed at 4500GHC. The price at which the deal was closed is what we consider in our space market analysis.  

To confirm that the Housing Data Center used the wrong information, lets read and analyze the example extracted from their report;

"For example, in the first quarter of 2013, a two-bedroom semi detached house at Kantamanso was going for USD 69,500 while a three bedroom detached house in the same area was going for USD 180,000. The same houses are now going for USD 98,000 and USD 220,000 respectively, an increase of 23.5% and 18.5%".

I need not to throw any light on the example above, but i will touch on it briefly for the sake of those who are not real estate inclined. The example above means that prices of houses which have been in the market and nobody seems to be interested have been increased. The question is why should you increase the price of a rotten tomatoes? Real Estate like any other product reduces or maintain its price when demand is low and vice versa. A property which has been on the market from the first quarter of 2013 till now mid of 2014 has a low demand hence should reflect its pricing. Landlords in some economy's where demand for real estate is low give concessions in the form free utility bills or two months rent free just to attract tenants. It would be prudent to attribute any increment in prices to the depreciation of the cedi against the dollar since owners and their agents have listed their houses in dollars. Its doesn't make sense to increase from USD 98,000 to USD 220,000 in this current market.  

"The Housing Data Centre further warned that the situation could worsen if interest rates, fuel, electricity and transport cost continue to rise" - Economic factors affects real estate decisions, however we shouldn't forget that the space market is segmented by type as well as location. Each type is unique on its own and each location differs from the other hence you cannot rely on one location and generalize your findings. They may be misleading. 

Ghanaians  are tired of financial experts giving advice on real estate, especially when they do not actually have anything to do with real estate. Let me conclude by asking the Housing data center these few questions;

1. what is the supply of housing stock in the chosen location found in their report?
2. What is the vacancy rate in these location?
3. how much did a 3 bedroom house sold for in the same location within the last 6 months?
4. What is the percentage of salaried workers who acquired a house through mortgage within the last decade?

GHANA REAL ESTATE PROFESSIONALS ASSOCIATION

The effort to bring santity to the real estate industry and bring dignity to players in the industry is beginning to see a green light. 

GREPA is a Non-Profit, Non-Governmental, Non-Religious and Non-Political Entity and our members consist of Real Estate Professionals in Ghana. 

GREPA Members are involved in preserving the right to buy and sell property; to lease and improve property and to work with the community to ensure that fair housing is available to all. 

Professional Members
Registered Real Estate Brokers/Agents, Property Marketing Executives, Property Managers etc

Associate Members
All other professionals not directly related to the Real Estate Industry; Lawyers, Insurance Brokers, Financial Advisors, Mortgage Consultants, Engineers, Quantity Surveyors, Architects, Home Inspectors, Contractors, Licensed and Certified Artisans etc. Painters, Plumbers, Electricians etc.

Academic Members
Persons involved or retired from full-time teaching/research in Real Estate and Allied areas at accredited research institutions of higher education or government agencies.

Student Members
Full/Part-time students studying Real Estate and related courses at accredited institutions of higher education

Corporate/Sponsorship Members
Any Corporate Body interested in being part of the Association

Honorary Members
Individuals of high standing may be elected as life-time honorary members by vote of the Board of Directors.

GREPA members are reliable and exhibit high level of professionalism. We edge the general public to look out for these professionals to satisfy their real estate needs. 

WELCOME TO THE NEW REAL ESTATE BLOG.

This is a blog to provide information about things happening in the Ghanaian Real Estate Industry. Feed you with information on Residential and Commercial Real Estate Services; Sales, Rentals, Consulting services, Project management and development, Valuations, Renovations, Expatriate Relocation and Settlement Services in Ghana.

This Blog Hopes to build a reputation as a top rated real estate Blog in Ghana for her Viewers in the market seeking to buy or lease residential and commercial property as well as investment opportunities. 

It also seeks to be a trusted partner recognized for its depth of knowledge in providing the best real estate information on the Ghanaian industry.

The Blog will also serve as a platform to help Buyers, Sellers, Landlords, and tenants achieve their real estate goals by connecting you to the best and well trained brokers in the country.

We will provide you with thought-provoking and cutting-edge real estate news and happenings in the real estate industry.

 

Please Contact Blogger via email at niilanteyboye@gmail.com or call : +233249730133.