Real Estate

Ghana’s real estate sector is steadily growing and maturing, and this is a result of steady economic growth, rising population and rapid urbanization. The sector’s increasing growth can also be attributed to factors including urbanization, market buoyancy and macroeconomic stability, financial sector development and improved regulatory and legal frameworks.

The changing skyline in the nation’s capital which features an array of finely-architecture high-rise edifices as well as luxury apartments sprouting across town are all evidence of a burgeoning property development sector that beckons to both investors and expats. Ghana’s property market is dominated by residential and commercial developments with private companies controlling over 90% of property holdings, thus, the dominant role players in the real estate market. The residential market is the most active, registering an estimated 85,000 transactions, for both sales and rentals, per annum over the past decade. Whilst commercial developments, comprising of offices and retail, are the second largest in terms of sales and rental transactions.

In the high-end residential sector, especially concentrated in the capital Accra, there is however today a significant number of vacant units in high-class buildings. This is due to a deficient management of the maintenance of these buildings which leads to a degradation of the installations (deficient elevator and air conditioning, unusable swimming pools, etc.) and the mainly expatriate population that used to occupy them in rent is migrating to newer buildings with functioning infrastructures.

The government has been reforming land delivery to reduce bureaucratic impediments and cut costs under the Land Administration Project. These have included the establishment of a Client Service Unit, digitalisation of its services, and the revision of the longstanding land law of 1962, among others. The government’s focus on infrastructure development has led to expansion in road infrastructure, making most communities accessible, thus increasing the demand in the real estate sector.

New sites to cater to the growing population in the Accra Metropolis have been identified at Saglemi, Prampram, with the off-site infrastructure done. In 2019, a partnership with the United Nations Office for Project Services to deliver 200 000 affordable houses, starting off with 6 500 units, was announced by the government.

Under the National Mortgage and Housing Finance Initiative, mortgages for public sector workers have been offered at interest rates between 10%-12% compared to the average market rate at 28%.

The informal sector continues to strongly support housing delivery in Ghana. It is estimated that 90% of Ghana’s housing stock in the urban areas is classified as informal as the dwellings do not conform to local authority control. There are instances where through non-conventional means, tenants agree with landlords to expand the housing units or improve the services within the unit to meet their socio-economic statuses. The associated costs are deducted from rents. These informal approaches somehow have become structured in different communities and are socially recognised. They should be researched, formalised, and supported to boost housing financing in the country.

Incremental housing financing supports the bulk of urban housing development in Ghana as the mortgage system is underdeveloped. International best practices for incremental housing models, which ensure residents are supported with the “unaffordable” components of home construction (well-serviced land at good locations, infrastructure, and foundational structure) are good options. Through Public-Private Partnerships, “half houses” could be provided for residents to complete at their own convenience and in accordance with their financing capacities and preference. Incremental housing financing also requires a combination of savings, subsidies, and credits.