HFC foresees brisk mortgage market in 2010

The country‘s mortgage market has been predicted to be robust as a result of the continuous decline in inflation rate and the central bank’s policy interest rate, the executive director HFC Bank, Mr. Akwete Akita, has said.

This year will see more of the banking institutions providing credit facilities to finance mortgages.

“As inflation and interest rates fall much appreciably in the economy, confidence is rising among financial institutions to provide financial assistance to borrowers and operators in the mortgage market,” said, Mr. Akitta at a media briefing in Accra as part of HFC’s 20th Anniversary celebration.

Meanwhile, housing properties developed for sale in the country are quoted in US dollars, perhaps intended to protect the value of investment and also prevent re-pricing of the properties as often as the local currency depreciates against other currencies.

Available checks indicate that the price of semi-detached houses on the market range between US$40,000 and US$140,000. Detached houses are going for between US$50,000 and US$160,000 while flats range between US$40,000 and US$140,000.

Based on the 2000 Population Census and estimates by the Bank of Ghana, the number of households in Ghana should have increased from 4.59 million in 2008 to 4.71 million in 2009, which translates into a housing deficit of 2.77 million. Based on the projection that the number of households will increase to 4.84 million in 2010, the nation’s housing deficit should rise to 2.85 million this year.

According to a policy brief of the Bank of Ghana on the housing industry in June 2007, outstanding mortgage loans to customers for the purchase of residential properties increased tremendously over the previous three years to over US$50 million at the time. Assuming an annual growth rate of 10.0 percent, the outstanding mortgages should now be valued not less than US$65 million.

Mr. Akitta said the Bank has mortgage products for all income-earning groups, be it high, middle or low, while some competitors cater for only the high income bracket group.

He assured shareholders and customers of the Bank’s desire to implement innovative programmes to enable it become one of the leading banks in the country and which flies the flag high across the sub-region.

As of December 2009, HFC Bank had financed 174 mortgages under its mortgage scheme.
In November 2007, HFC was appointed manager of the Public Sector Employees’ Housing Scheme by the Government of Ghana, with the intention of providing affordable housing for public sector workers.

HFC Bank has strategic alliances in neighbouring West African countries such as Nigeria, Sierra Leone and The Gambia

HFC Bank was incorporated as Home Finance Company on May 7th 1990 to implement the housing finance component of the World Bank (IDA) financed Urban 2 Project.

It was after fulfilling its initial mandate - by fully utilising the project funds of US$24million in the form of over 4,500 home-loans to qualifying applicants - that the company was transformed into a Universal Banking institution in November 2003.

Since becoming a Universal Banking institution, the bank’s profitability has been robust. Its Net profit after tax increased from GH¢0.82 million in 2005 to GH¢5.75 million in 2009, an average growth of about 579.3 %

Total Assets grew by an average of 266.9% from GH¢71.14 million in 2005 to GH¢261.10 million at end of 2009.

From one branch in 2003, HFC Bank has grown to have 21 fully-networked branches across the country, providing its wide array of universal banking services to customers in the Greater Accra, Ashanti, Brong Ahafo, Northern and Eastern Regions.

The bank also has twenty (20) on-site and off-site ATMs.

HFC Bank has incorporated HFC Capital Partners Limited, a private equity firm, to manage the Ebankese Venture Capital Fund and other funds. The aim is to take advantage of some projects which would not have been possible due to regulatory issues.