Premium apartments are the preferred choice for expatriates and Ghanaian retrnees from abroad


A casual drive through downtown Accra these days shows many luxury condominiums and apartments sprouting up. These apartments can cost an average of US$100,000 for one or two
bedrooms, and up to US$500,000 for 3-4 bedrooms or penthouse suites. Most are sold even before they reach completion.

Discerning investors have long discovered that if one can get an acre of land in a prime location in Accra, and pay even US$500,000 to US$1 million for it, one can put up between 6-10 single-family homes on it, sell them for more than US$2 million and make a tidy profit in less than two years. And this practice has placed excessive demand pressure on prime lands in Accra, and also increased the rents of ordinary people in most suburbs
of Accra. Ghana’s upmarket housing sector continues to grow quickly and keeps attracting more investment from both local and foreign companies. The recent signing of a US$10 billion housing deal between the government and the South Korea-based real estate developer STX, is seen as the needed catalyst to open up more business opportunities at the lower end of the property market, for flats or apartments priced in the US$30,000 to US$60,000 range, and bring more vibrancy and growth to the housing sector.

The government’s active involvement in the housing sector in 2010 has already started motivating the private sector to show interest. Even some labour unions are considering putting their member dues into real estate investments.

The Ghana Real Estate Developers Association (GREDA) is planning a massive housing project and has asked government for some concessions. GREDA wants the government to grant it a sovereign guarantee for securing the funding to construct 300,000 units of housing estimated at a total cost of US$7billion over the next decade.

In addition, the association wants tax exemptions on imported materials for construction.

Before the government had the time to consider GREDA’s proposal, the National Association of Graduate Teachers (NAGRAT) announced plans to build a housing project for its members and has called on the government to grant it similar concessions as requested by GREDA.

If the government heeds calls by these groups, granting tax waivers and specific construction concessions, the floodgates will open. Members of various labour unions and other entities currently bear the brunt of exorbitant rent charges from landlords who take advantage of the supply shortfall to charge usurious fees for their heavily sought-after accommodations.

According to Kojo Addo-Kuffour, CEO of a local mortgage company, Ghana Home Loans, even if these new developments planned across the country came to fruition, they would hardly meet the growing demand, a significant part of which comes from the increasing number of middle income earners in the country and Ghanaians resident abroad who are returning home or want second homes in Ghana.

Various experts, including GREDA and the Ministry of Water Resources, Works and Housing, put annual demand for home units at about 100,000 units. On the supply side, all efforts by developers put together hardly add up to 70,000 units annually on average, leaving an annual shortfall of about 30,000 units.


With Ghana's GDP destined to cross the 10% per annum bar in 2011 for the first time in the country's history, the economic performance that is spurring that growth can only keep the housing sector continuing to boil for the foreseeable future.

Presenting the government’s budget for 2011 to parliament last November for debate and approval, the Finance and Economic Planning Minister, Dr. Kwabena Duffour, told the nation that “Ghana faces an acute housing deficit of one million units especially in the urban centres. The cost of housing and other infrastructural development is excessively high as most of the materials used are imported. However, there exist abundant raw materials which can be used in the construction industry to reduce import content.”

Duffour added that the government was seeking to ensure that by the year 2015 at least 60% of the raw materials used in the construction industry would be indigenous to reduce the nation’s import bill. According to him, a housing policy programme on the utilisation of local building materials such as clay brick and tiles, pozzolana cement and bamboo in the building industry has already been prepared on the initiative of government.

All previous governments of Ghana have recognised housing as one of the important infrastructural developments necessary for economic growth. But it is also widely known that the heart of the challenge of reducing Ghana’s housing deficit is issues related to land acquisition and the price of land.

A study by the International Housing Coalition presented at the World Urban Forum held in Vancouver, Canada in June 2006, sheds more light on the issue of land in Ghana: “Land prices in Accra prohibit about 65% of the population from entering the housing market. Land values, for instance, in East Legon, a suburb in the capital, are between $40,000 and $60,000 per residential plot with serviced lands in Tema selling for about $15,000 to $18,000 per plot.”

“In Kumasi, the second largest city, urban land prices range from $20,000 to $40,000 for un-serviced land close to major road networks,” the report said. “You also have to remember that there are land title problems in Ghana, especially in Accra. And outside Accra, the challenge you would face as a developer is the infrastructure that will allow the people (who buy the property) to commute,” says Oko Omaboe, CEO of Nowak, a private developer, famous for delivering 10 executive houses in nine months to accommodate African heads of states who attended the 2007 African Union (AU) summit in Accra. “So it is not just about being able to put a large number of houses up. There is also infrastructure that goes with it and that is not going to be borne by any developer. That lies at the doorstep of the government,” Omoboe adds.

Despite the challenges private developers face, many remain buoyant about the sector and continue to invest more. The figures for the first half of 2010 from the Ghana Investment Promotion Centre (GIPC) show significant increases in investments targeted at the upper middle class population.
Notable among them, is a US$3.5 million investment by Soroma Ghana Funds for the construction of luxury apartment-style residences.

Omoboe shares his excitement about the market: “We have sold quite well, off-plan (before completion). Our customer target is anybody who wants to buy good quality property in Accra. Out of the number we have sold so far, I would say about 87% were bought by Ghanaians living here in Ghana.”
Given the apparent willingness of the government to give appetising incentives to foreign property developers in order to attract external capital, should local developers succeed in getting the same or similar sweeteners, there could be a property development explosion in Ghana which would certainly increase the housing stock. That, in turn, would lead to a cooling of the price appreciation in property values in the last ten years.

As foreign investors continue to flock to Ghana in search of high returns, and more airlines ferry them to Ghana, many are deciding to stay and begin exploring accommodation options. If even 5% of the estimated 2 million Ghanaians resident overseas decide to return permanently to Ghana, that would mean an immediate need for up to 50,000 new homes. With Ghana’s GDP destined to cross the 10% per annum bar in 2011 for the first time in the country’s history, the economic performance that is spurring that growth can only keep the housing sector continuing to boil for the foreseeable future.

High rise buildings now overlook the
skies of Ghana's capital city, Accra.

Housing now yields big profits for investors.