One-third of all oil money being directed towards housing sector – VP

…as Govt offers heavily subsidised house lots

File photo: An aerial view of one of the Young Professional Housing Schemes (CH&PA photo)

The Government of Guyana has spent $200 billion on the expansion and development of the housing sector, which is equivalent to one-third of its earnings from the petroleum sector.
Vice President Bharrat Jagdeo, at his weekly press conference on Thursday, said the sum invested in the sector was used to subsidise the cost of house lots to citizens.
“From 2020 to 2024, (we’ve allocated) about $200B for housing development, to put in the infrastructure. So, this means roads, often in areas that were overgrown with trees; build culverts, put in water and electricity…” he told reporters.
Jagdeo was at the time responding to a motion tabled in the National Assembly by former Housing Minister Annette Ferguson, who was advocating for the establishment of a special select committee to review charges for house lots for Guyanese. The Opposition member has said that since Guyana is an oil-producing nation, with a production of over 200,000 barrels per day, it is evident that housing can become easily accessible for Guyanese who are earning salaries below $200,000.

Infasturctural works ongoing at one of the housing schemes (CH&PA photo)

Her motion recommended that a committee be established, headed by the Housing and Water Minister, to examine the issue of unaffordability. That committee should include representatives of civil society, financiers and other stakeholders, and it should submit proposals and make recommendations to be adopted by the Government.
On Thursday, the vice president said 33,000 house lots have so far been allocated, while a contract has been awarded for the preparation of another 7,000 lots. Given this breakdown, he said, Government spends $5M to prepare one lot, which is then sold at a cost of between $92,000 and $200,000 for low-income earners; between $800,000 and $2M for middle income earners; and between $1M and $3M for high income earners.
“That’s the subsidy that people get, and that’s the transfer of wealth to people; because when they get a plot of land now, that is valued at a minimum of $5M (for less). If APNU were to examine what had happened in this sector, they’ll realise how much effort we’ve put into people having house lots and a home of their own, and this is consistent with our promise,” the vice president said.
Minister of Housing and Water, Collin Croal, recently stated in the National Assembly that the Peoples Progressive Party (PPP) government already has a sound plan in place to ensure affordable housing is provided to Guyanese. He explained that, currently, categories for house lots and houses from the Government range from low income to moderate, to middle and high- income. These are allocated based on an applicant’s income and other factors, the minister noted.
He added that, in some cases, an applicant may request a change in their category, and many times this is facilitated. And further, he pointed out that in such areas as Region Two (Pomeroon-Supenaam) and Ten (Upper Demerara-Berbice), the cost for housing is less than what obtains in Region Four (Demerara-Mahaica). Croal explained that prices are determined based on infrastructure, land size and the market.
President Dr Irfaan Ali has previously said that there has been a 41.25% growth in housing loans between 2020 and 2023. Comparing the period of 2015-2019 under the former APNU/AFC Government to that of 2020-2023 under his administration, the Head of State explained that there has been a 41.25 per cent growth in lending for home ownership and house construction over the past three years.
“This occurred because of very deliberate strategies by the Government to ensure that we reduce the cost of home ownership and we bring down the cost of borrowing,” Ali said. “So, over the years, we have been able to increase the incentives to the banking sector to support lending to the housing sector. For example, the interest rate in 2020 for low-income housing was about 6 per cent. Today, because of the incentives and the policies we have implemented, that interest rate is between 3 and 3.75 per cent.”
As recently as last month, Government revealed a comprehensive strategy aimed at further reducing the backlog of house lot applications within the database of the Housing and Water Ministry. As part of its manifesto, the PPP/C had promised to deliver 50,000 house lots by the end of its first term in office.