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Evaluation of Home-Equity Financing Option in a Developing Economy, Illustrated with an Example of Ghana

Author

Listed:
  • Foster Jonathan Nyarko

    (Department of Land Economy, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)

  • Jonathan Zinzi Ayitey

    (Department of Land Economy, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)

  • Emmanuel Kofi Gavu

    (Department of Land Economy, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)

Abstract

The introduction of mortgage financing in developing economies such as Ghana has been a marginal success. The framework and the macroeconomic environment necessary for a vibrant and effective mortgage finance system is almost non-existent and may demand a considerable period and a lot of effort to correct such anomalies. This study seeks to explore the prospects of equity financing and further suggests its viability in housing financing for developing economies. The survey confirms the most preferred housing finance option to be equity; this situation results in numerous piecemeal developments, many of which never see completion. The study finds out that due to worsening and unstable economic conditions, equity users often encounter a shortage of equity along the line of construction. We therefore conclude that rental housing is a better option for satisfying the housing needs of the majority of Ghanaians.

Suggested Citation

  • Foster Jonathan Nyarko & Jonathan Zinzi Ayitey & Emmanuel Kofi Gavu, 2015. "Evaluation of Home-Equity Financing Option in a Developing Economy, Illustrated with an Example of Ghana," World of Real Estate Journal (Swiat Nieruchomosci), Fundacja Uniwersytetu Ekonomicznego w Krakowie, issue 94, pages 23-28, December.
    • Handle: RePEc:kra:journl:y:2015:i:94:p:23-28
    DOI: 10.14659/worej.2015.94.04
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    More about this item

    Keywords

    housing; homeownership; equity financing; incremental development;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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