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Mortgage houses dismiss report on low demand for home loans

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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.

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

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