Should We All Own Homes

Accommodation is the biggest investment an individual will ever make in this journey of life. It is acquired through renting, buying with cash or through a mortgage and building from scratch by one’s self using personal savings or personal loans from banks. In the Gospel of Luke 14:28, we are admonished by our Lord to count the cost of building a tower and see if we have what it takes to finish it even before we begin. This advice is apt when taking the bold step of wanting to own a home. These questions are therefore worthy of consideration: Must we all own homes? What if you are ok with renting? What are the real costs of homeownership? In some studies, it has been established that over the life of a mortgage payment, one’s rent is sometimes equal to the mortgage paid for a similar property. The watchword here then is the COST of homeownership.

Most Ghanaian families prefer to build their homes from scratch which is a practice passed on from generations due to the late advent of the mortgage market in our economic system. Surprisingly the owning of a home through mortgages is not popular amongst the populace not to talk of the large number of gainfully employed people who still do not qualify. The number stands at 60% of all workers in Ghana who need some form of government assistance to own a home. The road to homeownership starts with the land acquisition and then gradually building for 10 to 15 years by the average Ghanaian family. These families juggle their quest to own a home with taking care of a minimum of two children to the tertiary level of education. There is also the regular remittances to four parents of the couple while paying their rent. It is nothing short of a miracle to see these houses completed. It is at this point that the words of our National Pledge ‘through the blood and toil of our fathers’ and need I add, of our mothers, begin to hit home. As a result, most Ghanaian families who own homes have 100% equity in these houses which can be leveraged (see my previous post on the subject).

The other cost is land acquisition which for the average income earner would have to be at the peri-urban areas of Accra. This is because they do not qualify to buy land or homes in the major Accra Metropolitan Area since these are way outside their income bracket. They therefore resort to the outskirts of Accra; Katamanso, Oyibi, Ayikuma, Amasaman, Gbawe, Prampram and Kasoa in the Central Region for affordable lands and homes. These locations as I choose to call them are ‘Dormitory Neighbourhoods’ since they are mostly empty during the day. This is because residents move to the city centre to work. The cost of fuel, transportation, stress from long distance commuting are but a few of the costs to consider in our bid to own a home. These not withstanding, the peace of mind that comes with walking into your own home is unmatched. In addition to the above, homeownership creates wealth and ensures generational inheritance of wealth in a family through leverage.

Renting on the other hand rids an individual of all the costs associated with home ownership especially the financial strain. Renters are able to relocate to areas of economic boom for jobs and they are better able to take advantage of opportunities across cities. They however would have to grapple with the arbitrary increments in monthly rent charges imposed by some landlords which is not based on any economic metric but mostly on sentiments and emotions.

Again, should we all own homes?

Prince Yaw Antwi