Marcopolis presents the Ghana Report focused on investments, doing business, economy and other topics featuring interviews with key executives and government officials. The sectors under review are agriculture, banking, energy, industry, telecom, IT, real estate and more.
The real estate market in Ghana is growing rapidly, offering lucrative investment opportunities for local and foreign investors. With a fast-growing economy, an increasing middle class, and high demand for housing, Ghana's real estate sector presents immense potential. However, like any investment, assessing the market carefully is crucial before committing funds. This article provides an in-depth analysis of the real estate landscape in Ghana to help investors make informed decisions.
Several factors are driving demand for real estate in Ghana:
All segments of Ghana’s real estate market hold potential, but some clearly stand out:
Accra, Kumasi, and Takoradi are the top real estate markets in Ghana currently:
With 5 million residents, Accra is Ghana’s capital and economic hub. Key opportunities in Accra include:
Kumasi is Ghana’s second largest city, with a population of over 2.7 million. Notable prospects in Kumasi:
As Ghana’s oil hub, Takoradi has a fast-growing economy. Key opportunities include:
Beyond the top 3 cities, towns like Tamale, Cape Coast, and Nungua also offer real estate prospects catering to local demand:
Understanding buyer and tenant preferences is vital in tailoring real estate projects:
When examining potential real estate investments in Ghana, some key factors to evaluate include:
Market Conditions - Demand, supply, pricing trends, and competition in the specific market segment and location. Research historical and projected performance using surveys, housing data, and expert consultations.
Infrastructure - Existing and upcoming infrastructure supporting the area like roads, power, water, and sanitation. Also consider accessibility, traffic conditions, and public transportation availability.
Financing Options - Availability and terms of bank financing, investment fund capital, private equity, and other funding sources applicable to the property type. Evaluate rates, tenures, and loan to value ratios.
Legal Environment - Ghana's real estate laws, ownership structures, and title registration processes. Also consider the taxes, duties, and approvals required. Engage local legal counsel.
Cost Feasibility - Transaction costs, site acquisition, and construction budget based on location, materials, labour, and project amenities. Model viability at potential sales/leasing rates in the market.
Economic Conditions - Overall economy and employment, sectoral performance, interest rates, demographics, and other macro-factors affecting demand and affordability.
While Ghana's real estate market holds promise, investors should also carefully assess the downside risks:
Structural Deficits - Ghana's mortgage market is underdeveloped. Construction costs are high, while access to credit is limited. These structural constraints dampen market growth.
Currency Fluctuations - The Ghanaian Cedi fluctuates against the dollar, creating unpredictability in import costs for construction materials.
Bureaucracy - Lengthy processes for securing permits, approvals, utilities, and title deeds may delay projects.
Upcoming Elections - Investments may slow down until after Ghana's next general elections in 2024 bring clarity on policy direction.
For first-time investors in Ghana's real estate market, recommended approaches include:
Despite hurdles like high inflation and infrastructure gaps, most industry experts and government agencies project sustained growth for Ghana's real estate sector. With prudent due diligence and an efficient execution strategy focused on market needs, investors can tap into Ghana's underserved housing demand and young demographics. While the current environment poses challenges, Ghana's real estate market offers patient investors outstanding return potential over the long run.
One developer crafting innovative residential spaces for Ghana's property market is VAAL Ghana. VAAL has an ongoing project called Harmonia Residence, located in the Airport Residential Area of Accra. Featuring contemporary mid-rise condominiums as well as high-rise apartments, the gated community offers a business centre, gym, swimming pool, mini-mart, and other upscale amenities suited for urban professionals and families. With flexible payment plans and a central, high-demand location, VAAL's Harmonia Residence is an appealing new project for investors seeking to enter Accra's thriving real estate landscape.
Average rental yields range from 8-12% for residential properties currently. Yields for retail and commercial assets average 14-18%. However, projected capital appreciation drives investor interest - property values have risen almost 10% annually in Accra over the last 5 years.
The mortgage market in Ghana is relatively small - mortgage debt is under 2% of GDP versus 25% in South Africa. Only five banks offer mortgage financing. However, demand is set to rise with increasing incomes and the government's promotion of bank lending.Q3: How expensive is construction in Ghana compared to other African countries?
Building costs in Ghana are among the highest in Africa, estimated at $1,350 per square metre for simple construction - double the cost in Kenya or Rwanda. Land, imported materials, permits, and utility connections all add costs. Labour costs are rising by 15-20% annually.
Accra accounts for over 65% of deals, followed by Kumasi at 10–15%. Recently, Sekondi-Takoradi has emerged as the third biggest market thanks to the oil economy. Cape Coast and Tamale are also seeing more construction.
An 8% property tax is levied annually on commercial rental income. Additionally, individuals owning more than 3 properties pay a 1% tax on the property value annually. Foreign companies pay a higher 15% corporation tax on rental income from property.
Ghana's real estate sector is experiencing rapid growth driven by urbanization, rising incomes, and economic expansion. Though the market faces challenges like infrastructure deficits and financing issues, the structural housing shortage and young demographics underpin its long-term investment appeal. By scoping opportunities methodically, studying trends, and partnering with trusted local players, investors can unlock substantial rewards from Ghana's real estate landscape. For those seeking an entry point, VAAL Ghana's Harmonia Residence offers an exciting new option with its prime location, modern amenities, and flexible payment plans.
WEBSITE: https://vaal.com.gh
EMAIL: This email address is being protected from spambots. You need JavaScript enabled to view it.
PHONE NUMBER:
+233 243 38 99 99
0800 888 888
LOCATION:
One Airport Square, 3rd floor, office no. 4, Accra, Ghana
INTERVIEW:
• Real Estate Industry: Alaa Zayed Talks Latest News and Projects at VAAL Real Estate Ghana
COMPANY NEWS:
• Assessing Real Estate Opportunities Investment in Ghana
• Risk and Challenges in Ghana's Luxury Real Estate Investment
• Financing International Real Estate Investments in Ghana
• Real Estate Sector: International Mortgage Financing in Ghana
• VAAL Real Estate to Showcase Harmonia Residence and Harmonia Villas at the UK Expo
VIDEOS :
• Building Dreams: Alaa Zayed of VAAL Real Estate Unveils a Legacy of Luxury Projects and Expansion
• Adding Value to Ghana's Real Estate Landscape: A Conversation with Alaa Zayed of VAAL Real Estate
• Mastering the Art of Property Location: VAAL Real Estate Ghana Unveils Prime Real Estate Strategy
• VAAL Real Estate Ghana to Launch Upcoming Mixed-Use Development Project in Ridge in August
• VAAL Real Estate: Pioneering Excellence in Ghana's Real Estate Market and Beyond
• Designing Dreams and Realizing Visions: Alaa Zayed's Journey from Architecture to Real Estate
• Ghana Real Estate Sector: VAAL Real Estate Discusses Buying Off-Plan Properties in Ghana
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