REAC is open for business; What does this mean for buyers, investors, developers and agents?
So before we dive into the significance of the Real Estate Agency Council (REAC) being launched, let’s take a moment to look back at how the real estate scene in Ghana has evolved in about 30 years.
The Ghana Real Estate industry has been without any government supervision for many years. Since the advent of Ghana’s Democracy in 1992, the sector has operated devoid of governmental oversight.
The Lands Commission was introduced under the 1992 constitution to manage public lands and any other lands vested in the President by the Constitution or by any other law and any lands vested in the Commission. It is important to note here that when we refer to land in Ghana, it includes the land and any property that is on the land.
As the real estate industry grew in Ghana, it quickly realized that the regulations about buying and selling property in Ghana needed an update. It was a free market where anything goes. This led to some serious issues.
Property values skyrocketed based solely on location, with little regard for the actual quality of the properties. Basically, property can be sold by anyone, to anyone, at the seller’s price, without any proper transaction method as most payments are made in cash.
Imagine buying properties worth hundreds of thousands of Ghana Cedis from individuals who have no training or knowledge in the sale of property. This is what opened the door to fraudsters who could pose as sellers and ‘sell’ non-existent property to innocent buyers. Swindling them of large sums of money without a trace. This gave Ghana a bad reputation when it came to buying property.
It was clear that transactions of this magnitude must be controlled and monitored. That is when the Real Estate Act of 2020 (Act 1047) was born. Their mission? To bring some much-needed order and stability to Ghana’s real estate scene. REAC’s job is to make sure things are done right: regulating the market, setting ethical standards, and protecting the interests of everyone involved, from developers to investors to homebuyers.
READ ALSO: All You Need To Know About Real Estate Agents in Ghana & How To Become One
On the 30th of April 2024, we witnessed history in the making within the real estate space in Ghana. The launch and commencement of operation of the REAC is a step in the right direction. These changes will take some time to come into effect but the industry is hopeful and excited.
What to look forward to in Ghana’s Real Estate Space
1. Licencing Industry Professionals
The real estate industry has many players from real estate brokers and agents, developers, lawyers, property managers, real estate marketers, surveyors, home buyers and investors. REAC will be responsible for licensing professionals so buyers can work with licensed professionals.
Real Estate Professionals will be able to obtain their license through a cloud-based licensing and regulating system. Allowing professionals to get licensed efficiently through the Internet. More information on this will be released in the coming months.
READ ALSO: Why you need a land surveyor in Ghana
2. Transparent Real Estate Transactions
The Council will be responsible for issuing real estate transaction certificates for every real estate transaction. Ghana is becoming more and more digitized and through REAC, no real estate transaction will be possible without a real estate agent.
All real estate transactions will also be digital which will ensure that transactions and commissions are automatically recorded. Eliminating cash will allow money to be traced and also prevent money laundering which the real estate industry is normally accused of.
3. Accurate Property Data
Data is king. For the first time since its inception, the Ghana real estate industry will be collecting valuable data through cloud services and the combined effort of real estate developers, brokers and agents across the country to create an MLS (Multiple Listing Service).
This centralized repository will furnish stakeholders with structured and accurate property information, augmented by AI-driven analytics to extrapolate industry trends and insights. Stakeholders will be able to gain valuable insights and trends from the data to project outcomes within the real estate industry.
This, in my opinion, is one of the most valuable roles REAC will play in the real estate space in Ghana. Allowing professionals to access data at will through the internet will revolutionize the industry which brings me to my next point.
4. Price Regulation
Harnessing the insights derived from data analytics, REAC is poised to revolutionize the pricing dynamics within the real estate sector. By leveraging advanced analytical tools and comprehensive data sets, REAC will establish a robust framework for determining property valuations. This framework will not only ensure that valuations are fair and equitable but will also serve to enhance transparency throughout the valuation process.
Moreover, by promoting greater transparency in pricing, REAC aims to create a more level playing field for both buyers and sellers. Prospective buyers will benefit from a clearer understanding of property values, empowering them to make informed decisions and negotiate with confidence. Simultaneously, sellers can rest assured that their properties are being valued accurately and fairly, fostering trust and integrity within the market.
Furthermore, the establishment of a transparent pricing framework will have broader implications for the real estate ecosystem. By providing clarity and consistency in property valuations, REAC will facilitate greater access to mortgage opportunities for prospective buyers. Lenders will have greater confidence in the accuracy of property valuations, thereby reducing risks associated with lending and potentially expanding mortgage lending options for homebuyers.
5. Better Real Estate Environment in Ghana
In general, it is about time that the real estate industry in Ghana gets regulated. The private sector has for many years done its best to uphold ethical and professional standards with the formation of the Ghana Real Estate Developers Asociation (GREDA), the Ghana Real Estate Professionals Association (GREPA) and the Ghana Association of Real Estate Brokers (GAREB) and many more.
Private websites like Meqasa have serviced many industry professionals with valuable information over the years. The real estate industry has been growing but with the introduction of REAC, I believe that we will see a very significant change within the sector.
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Over the next couple of months, we will witness the REAC roll out most of its operations which will better serve the entire real estate community in Ghana. What are your thoughts on REAC and the real estate industry in Ghana? Kindly share it in the comments.
