Home sales dip post COVID, but cost of materials distress realtors

By Wisdom JONNY-NUEKPE

The Ghana Real Estate Developers Association (GREDA) says the industry is yet to recover to pre-COVID levels of home sales and demand, and is now facing a fresh challenge—rising costs of building materials, which are further constraining growth and affordability in the housing market.

GREDA’s president, Dr. James Orleans-Lindsay – who described the situation to the B&FT as challenging, said home sales after COVID-19, have dipped by almost 60 percent, adding that “home patronage was great before the pandemic”.

He said the sector, which is yet to fully recover from the pandemic, is currently being confronted with multiple setbacks inhibiting home sales – key among them being the cost of building materials, adding “major sectors of the economy have fully recovered from the pandemic, but realtors are still in the woods”.

“We are appealing for government to assist with any little help in sustaining the industry to enable real estate developers survive. The current cost of materials is biting harder than COVID,” . Orleans-Lindsay said.

While acknowledging that price control can damage confidence in a free market economy, he said government can help convince stakeholders to reduce prices of building materials.

Data from GREDA show that apart from iron rods, which price has reduced significantly from GH¢9,000 to GH¢7,700 per tonne, the price of cement is still the same at most sales points across the country.

Currently, most brands of cement sell between GH¢105 to GH¢118, a situation GREDA lamented must be reduced further in line with the cedi’s recent appreciation.

Though government has assured that it’ll engage suppliers and manufacturers of building materials – particularly cement manufacturers to reduce prices to at most     GH¢95 – GREDA noted that nothing has changed.

Dr. Orleans-Lindsay explained that the local currency strengthening should translate into lower costs for construction inputs such as cement, iron rods and other essential materials.

He argues that the continued high prices of these items despite favourable currency movement place an undue financial burden on Ghanaians particularly prospective homeowners and developers.

“GREDA will continue to price homes in the cedi equivalent, but prices of materials should be reduced. The developers are losing because we still buy cement at the same high prices,” he bemoaned.

Indeed, the real estate sector – which plays a critical role in addressing Ghana’s housing deficit – has faced significant challenges in recent years due to the rising cost of building materials.

“We are not asking for favours, we are simply asking for fairness. Let the cedi’s strength bring some relief to the ordinary Ghanaian trying to build or buy a home. We have battled COVID which impacted the industry negatively. This is not the time to be battling another setback,” Dr. Orleans-Lindsay added.

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