Ghana’s Housing Story; Then, Now and the Future
After Ghana gained independence in 1957, the topic of housing became a matter of serious government discussion. As part of the National Development Plan during 1960-1965, an idea emerged to provide housing for Ghanaians by mimicking the post World War II European government recovery strategy from enemy attacks where old buildings were renovated for public use.
It was in the course of this and during the era of Dr Kwame Nkrumah’s rule that two main state bodies were formed to address housing issues in Ghana; the State Housing Corporation (SHC), which worked in the regions across Ghana, and the Tema Development Corporation (TDC), which was created with the intention of developing residential units in the swiftly growing Tema zone as part of an extensive industrialisation drive.
Over time, as the industry evolved in Ghana, the TDC and SHC redesigned themselves as Limited Liability Corporate bodies. Mortgages that had been state-managed were acquired under a housing finance reform, by a new Home Finance Company and became more of a secondary mortgage generator.
According to a recent report by the Bank of Ghana on the housing market, Ghana’s housing industry is at a rudimentary stage when compared with more advanced countries. High property prices, particularly, in the urban centres such as Accra, Tema, Kumasi, and Takoradi fueled by a rapidly growing middle-class, as well as rapid and uncontrollable urbanisation, have turned the housing industry into one of the critical developmental issues facing policymakers.
As reported by Rachel Teaman from Phys.org, “the local government of Accra, in August 2018, appropriated 1,800 homes for demolition to make way for, among others, tomato retailers. Officials had already begun plotting the land for its new use when residents of the largely poor neighbourhood erupted in protest, to no avail.”
Frimpong Boamah and Clifford Amoak, authors of Planning by (mis)rule of Laws: The Idiom and Dilemma of Planning within Ghana’s Dual Legal Land Systems, argue that “the competing systems of colonially inherited statutory and customary property law create vacuums of power and opportunities for exploitation of poor and vulnerable groups by both state and non-state authorities”.
The dual system dates back to 1894 when the Aborigines Rights Protection Society (ARPS) was formed to resist the Crown’s Lands Bill, which sought to vest the country’s land and mineral rights in the British Crown. The resulting dispute between customary landowners and the state created parallel legal land systems that persist today.
According to the authors, the land and planning laws empower both customary and statutory officials without clear distinctions in authority on control of land ownership and use. As a result, officials navigate the spaces between the law to accumulate wealth and power.”
On the brighter side, renting, buying, and selling today has changed drastically with the advent of the internet. Platforms like Meqasa have made it possible for agents, home-owners, and developers to list properties and acquire leads in no time, with no hassle. Property seekers can also go on meqasa.com to seek all kinds of property from verified agents, home-owners, and developers.
This has made the process easier, more convenient and safer than before when property seekers had little to no means to verify property sellers, to seekers having security with a wide array of properties on a trusted platform.
The average cost of land in Accra
Presently, there is a lot of interesting data that represents the real estate landscape in Ghana. Let’s take land, for instance. The average cost of land in Accra differs tremendously from place to place and from year to year. A comparison of changes in cost from 2018 to 2019 shows that there has been a consistent increase in the average cost of land across different neighbourhoods in Accra.
Although the margins of increase are different from neighbourhood to neighbourhood, it is obvious that land is better bought earlier than later. From the infographic, the most expensive land in Accra appeared to be located at Roman Ridge while the cheapest of the lot could be found at Aburi.
Total property searched in 2019
According to data gathered by meqasa.com, property listings over the last three years have steadily increased in the digital market space. Using data gathered from online listings by agents, developers and homeowners, it is clear that there is an attempt to meet Ghana’s housing deficit which currently stands at about 2million housing units.
In 2017, a total of about 10,682 properties were listed online. This increased to 15,231 listings in 2018 and 21,241 in 2019. The steady rise in listings could be attributed to better access to modern technology and internet access but one can easily surmise that properties on the market have increased over time.
To satisfy the massive housing deficit that currently exists, it is projected that about 1,582,180 more properties would have to be listed by 2049 in order to satisfy the housing needs of the country.
Most searched neighbourhoods in Accra
In 2019, there was a total of 10.9M property searches online. There is a widely believed misconception that the high cost of property in Ghana means that people have less interest in owning or renting property.
On the contrary, data gathered from Meqasa shows that of the 10.9M property searches that were made in 2019, about 6.7M could be attributed to searches for property for rent while about 4.2M of the searches were for properties for sale. An accurate interpretation than would be that there is a higher interest in renting a property in Accra than in buying property.
Additionally, the total number of people who showed interest in renting a property in Accra in 2018 increased by about 78% in 2019 while the total number of people interested in buying property increased by about 57%.
This simply means that the high cost of property in Ghana does not necessarily mean a lack of interest in owning or renting property.
There are certain trends that have become evident in the manner in which people search for property in Ghana. The location appears to be the most defining variable as opposed to cost. The most searched neighbourhood for rent in 2019, for instance, was East Legon with about 10% of people searching for rental properties showing interest in that particular area. Interestingly, the highest search for property for sale was also at East Legon.
This is particularly peculiar because the average cost of land for sale in East Legon is actually lower than in Roman Ridge and Cantonments but appears to be a more coveted neighbourhood in Accra than most others. After East Legon, the highest property searches for rent were at Spintex and Cantonments while the highest searches for property for sale were in Airport and Spintex.
With the advent of technology, over the past decade, the real estate industry in Ghana has seen massive growth. Home seekers can sit at home and have a virtual 360-degree tour of properties that they are interested in.
Property developers can market their properties to interested persons beyond the borders of Ghana. Innovations like this have raised the bar within the industry and pushed developers to deliver world-class developments.
The future of real estate in Ghana is a bright one as the market is still young. Some of the signs we are anticipating to see within this decade are as follows:
The launch of the Ghana Association of Real Estate Brokers (GAR) is a step in the right direction as it aims to unify and set standards for real estate brokers to ensure quality, credibility and ethics. GAR members are educated on best practices within the real estate industry. They also receive more business and can set regulations as a body to govern their members.
A well-regulated industry will attract investments which can go a long way to reduce the cost of housing in Ghana. The government and other international organisations are already investing millions in the real estate sector in Ghana. With time, this should result in lower property prices and easier access to real estate by a wider group of the country’s population.
Reduction in the housing deficit
Ghana has a major housing deficit problem which the government and private developers are trying to solve. The current housing deficit in Ghana stands at about 2M. Within the next decade, if the past trends are good to go by, the housing deficit may reduce to some extent as more and more real estate development companies are springing up. Data indicates that this will be a slow-moving process but it is certainly an achievable goal.
The way forward?
Looking forward, there are certain basic policies that need to be implemented by governing bodies to ensure that the growth that is expected will be a structured one. Regulating the activities of stakeholders in the real estate space is the first step. The current real estate industry in Ghana has some structure but more can be done to improve sustainability and growth.
Additionally, steps must be taken to set appropriate legal procedures to guide all stakeholders: developers, agents, home seekers, landlords (and landladies) and any other party involved in the renting and buying of property. These structures include pricing guidelines, development guidelines and other relevant laws that will enable the industry to flourish. These laws should be enforced so the industry can become more attractive to investors.
Meqasa has partnered with the GAR to build the first-ever Multiple Listing Service (MLS) in the country that will allow agents to better manage their property portfolios. This is expected to interconnect property agents and their properties in a manner that shall facilitate a more efficient delivery to clients.
Ghana has come a long way in the real estate industry and the best is yet to come. The next decade promises to be a fruitful one as far as real estate is concerned. God bless our homeland Ghana and make our nation great and strong.