The worth of land or a property is in virtually all nations around the globe primarily based upon the financial worth.
For instance, farmland in Australia has a price per acre of the revenue you can also make by farming on it for 3 to most 4 years.
In South Africa, the worth of a farm relies upon way more on the worth and the state of the fences round that farm than on the home and stables.
In most European cities, the worth of homes is predicated upon the worth you may hire it out for or associated to the curiosity and mortgage charges.
Farmland costs in Europe are sometimes associated to not solely the longer term potential income but additionally to licenses and quota to supply and even to pollute.
Prices of all lands in Ghana are largely primarily based upon emotional worth the house owners give it. This resulted in extremely overrated costs of land and real-estate for the final a long time. This is among the main causes politicians (even Dr. Bawumia) in Ghana all the time neglect to say when blaming every kind of circumstances for our financial downfall.
We, Ghanaians give non-measurable worth to all kkinds of issues; it’s our ancestral property, it’s our household home, I’m an enormous man/girl as a result of I personal a home, I’m higher than others as a result of I’ve land and so on. and so on.
These issues are additionally taking part in a task in Europe, however a a lot decrease position than in Ghana.
Ancestral property worth is of hardly any significance in Europe. My household home is barely taken in consideration when your father home is in a very good state and within the household for greater than no less than 3-4 generations. But even then, household home get offered when the mother and father die and kids desire to cash-out. House possession is barely taken care of as a result of on the long term its cheaper than renting and land possession is barely essential if you can also make good cash out of your property.
The purpose that Ghana has been hit further arduous by the present worldwide financial disaster is that we paid a lot an excessive amount of for residential and industrial lands in and round our financial hubs, Accra, Tema, Kumasi, Takoradi and alongside many places on our coastlines.
This resulted in very excessive prices of real-estate, trade, hospitality and so on.
The different drawback is that it’s going to in all probability reoccur after each financial disaster in Ghana as a result of individuals hardly study from it, as a result of predators like dishonest landlords and land house owners revenue immensely from it.
To make it simpler to elucidate and to grasp, I evaluate Accra all the time to Plovdiv in Bulgaria the place we steadily go to.
All over Accra you could find signboards; Apartment on the market or hire, workplace for hire and so on.
Most of the larger condominium blocks have been promoting reasonably priced residences ranging from USD89,000. During that very same time, comparable new residences in Sofia, the capital of Bulgaria have been offered round Euro 42,000 and in Plovdiv, Bulgaria’s second largest metropolis from 29,000 to – 35,000 euro. Today, you may nonetheless purchase such residences at round 55,000 and 35,000 – 38,000 euro respectively.
The purpose I evaluate Ghana to Bulgaria is that Bulgaria will not be a wealthy European nation like most western EU nations. Salaries in Bulgaria are round one-third of Germany, France, Holland and Belgium.
But the explanation housing is reasonably priced in Bulgaria is which you can purchase an acre of land in Sofia at 30,000 – 50,000 euro. The value for an acre of land round Plovdiv industrial land is accessible round 15 euro a m2 and land for housing between 45-75 euro a m2.
If I evaluate that to a 100×70 plot in Ghana that may be 30,000 usd.
Some years in the past, I used to be a guide for a international college and I used to be requested to seek for an acceptable property in Accra of 3-4 plots. My finances was 1.500.000 Usd. I discovered one near the varsity for journalism which went on public sale. The value shocked me as a result of it was lastly offered for 3.4 million usd.
If I e-book a 5 begin resort in Paris, London, Amsterdam or Accra the worth will probably be between 250-350 Usd an evening. International visitor are questioning why these costs in Accra?
What revenue can an organization make in case your month-to-month workplace hire is 3,000 to 4,000 Usd.
At what value can I promote the beer in my ingesting spot if my landlord rents me the property for two,000 Usd / 16,500 Ghs a month?
Great corporations in Accra, Tema, Kumasi are or will probably be bankrupt quickly due to overpriced real-estate costs.
Some years in the past, I attempted to amass a dilapidated home in east airport/dzorwulu and referred to as the quantity on the signboard. I made an appointment and visited the 100×120 plot simply behind the N1.
The agent gave me the (negotiable) asking value of 1.5 million Usd.
When I requested him what revenue can I make with equivalent to value? He answered however that’s what it’s value. You can construct residences and hire them out for two,000 Usd. I may see that he didn’t have a clue about enterprise nor building.
On such a plot can match 2-3 townhouses solely, and what can be the promoting value wanted for that when the land was already 500,000 usd every ? Or 10-12 residences however that’s unattainable with out the development of an costly underground storage.
Ten years in the past the signboards and adverts in newspapers have been all over the place, residences on the market. People made down funds while that they had solely seen the images and the placement.
Those days are over, uncompleted condominium blocks, townhouses on closed compounds are all over the place seen throughout and Tema. But who can afford them?
In the imply time land house owners, chieftaincy and households aren’t decreasing their asking costs just because, like my spouse used to say: they’ll survive on 2 kenkey a day and are ready for the day somebody is in determined want to amass a chunk of land.
At the identical time these, affected person individuals who haven’t any financial clue about something besides the best value for his or her property are collapsing our companies.
Currently, the one surviving chopbars and ingesting spots are both located at unlawful places and previous household properties all around the facilities of Accra, Tema and Kumasi.
Good prepared, landlords have adjusted their hire downwards, the unhealthy dumb ones don’t care and are slowly pushing their tenants to bankruptcies’ having fun with one other yr of high hire and risking to be with no tenant for years. And the worst ones are silently hoping the tenant goes bankrupt so he/she will take over the enterprise below his administration.
All created by unrealistic excessive costs of land and real-estate in Ghana.
I believe this drawback is tough to unravel and might by no means be solved with no large political stir-up in Ghana throughout which Government ought to take actual management of landownership. Leasing is often the perfect device for that but it surely has been abused a mutilated from its authentic type a lot that it grew to become an virtually ineffective device.
Confiscation is one other however much more troublesome device, virtually made unattainable by our legal guidelines and regulation by which paid events may even go to court docket 30-40-50 years and extra later to dispute the explanation it was confiscated.
Rent management is one other device, however they went uncontrolled themselves that it has change into one other ineffective
One factor stays a very powerful: We must do one thing about it as a result of its disturbing our growth.
Author, Nico C.M. van Staalduinen, is a columnist and hotelier
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