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The rise of Ghana’s real estate market has been well documented over the past decade, with an impressive improvement in infrastructure. What is the current status of the real estate market in Ghana? Today, real estate consultant, Peter Tsikata (PT) brings us an in-depth analysis as well as outlook for Ghana real estate market:
Jumia House Ghana (GH): What are your views of the real estate Market?
Peter Tsikata (PT): The real estate market is potentially great because the demand is there.
GH: What are the various segments in the real estate market?
PT: We can divide the market place into three segments- the lower segment, the middle and the upper one. The lower segment is for people who are looking for affordable properties. They are the people who call us every day for ‘chamber and hall self-contain’ and the one or two-bedroom apartment units. That market is huge; it’s explosive. This is where we get the highest number of phone calls and that should tell you that there is a huge demand for affordable homes but we don’t have enough supply. Developers are not developing a whole lot of that, because they do not have the funding. We do not have construction loans to fund real estate construction in Ghana.
The second segment is the middle class. I will say these people are the government workers who work in the ministries who can acquire properties and the payments can be deducted at source. That segment is quite huge. If you would remember, government tried this affordable housing scheme where they were going to construct 30, 000 housing units and they hired the Korean Company called STX. That project collapsed due to boardroom wranglings between the Koreans and the Ghanaians. The STX could have satisfied the demands of government workers in the middle class and of course the business people and the self-employed people.
The upper class are those who have the cash to buy; a lot of them are Ghanaians living abroad, earning foreign exchange and are looking for properties for investment purposes or those who want to own their own homes in Ghana. The World Bank , IMF and other international organizations are looking for accommodation for their staff. Some of them would like to buy properties for their staff who would be coming to Ghana. So the demand for that segment is also there. Even in West Africa, Nigerians would like to buy properties in Ghana because Ghana is only 45 minutes by air and they prefer to live in peaceful Ghana. Some Nigerians work in Nigeria and they come to spend their weekends in Ghana. These people have plenty of cash to buy. So the market place is good; the demand is there and from the way things are going, unlike the olden days, when the quality of construction was not that good but we have come very, very far. Now the quality is good; if you go to Airport Residential Area and Cantonments, you will see the quality of construction and the amenities inside the building, which are beautiful and can be compared to any in America or Europe.
GH: The relationship between the real estate market and the economy of Ghana?
PT: First, the quality of construction has improved a lot and people are willing to pay for quality especially in the upper segment so the demand is there. I would also say that as the economy of Ghana improves and our currency stabilizes, it builds investor confidence and economic growth fuels demand. High economic growth puts money in people’s pocket and therefore fuels demand so across the board. If the economy grows, more investment will come in and more people will buy houses and we will see growth in the industry. For me, I see a bright future in the industry.