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How is the real estate market in Ghana going to change over the next decade? What are the potential trends over the longer term? We seek the views of real estate consultant, Peter Tsikata on the future of real estate on emerging markets like Ghana’s. Here is the concluding part of the interview, analysis and outlook of the real estate market in Ghana.
Jumia House Ghana(GH): Why is the real estate sector so important?
Peter Tsikata (PT): I went to Los Angeles, California, where I lived for 22 years and I saw the remarkable improvement in the real estate values over the years. I will give you an example, I bought a town-home or condominium in 1999 and I sold that condominium at the end of 2005. I bought that condominium for $125, 000 and six years after, in 2005, I sold that condominium for $425,000, an appreciation of $300,000 and when I sold it, I used that money to buy a house here in Ghana.
I am using this example to show you why real estate is such a great investment. Today, there are several things Ghanaians do not do and as people get more and more sophisticated, those people would like to take equity loans for their homes in Ghana. Taking a loan/mortgage from the bank and using your home as an equity or using your home as a collateral for that loan and they can use the money to do other things. So from that real experience of buying my property for $125,000 and selling it for $425,000 dollars, it was a wake-up call for me that the right investment for you to put your money into over a long period of time was real estate. Why? Because for real estate, unlike stocks and bonds, the property is going to be with you, you can see it, you can touch it, it’s not going anywhere till there is a demolition in the city that you are in. The properties are going to be there, you can use it for whatever purpose you want it to, be it commercial, industrial depending on the zone and however you want it to be and you can tap into that for money in times of hardship.
As the market grows, people are going to recognize over time that real estate is a great investment because over a long period of time real estate appreciates. I think you can see what is happening at Tetteh Quarshie Circle right now, this company called Trassaco are building this monstrous towers and believe me at the very top level they are selling it for about 2 million dollars and they are selling the down floor for about 600,000 to a million dollars depending on the square meters you wish to purchase. Why are people buying into things like that? People are buying things like that because they know that over a long period of time, these properties will appreciate in value as economy grows.
GH:How is the market going to be over the next decade?
PT: The market is going up and up because as the population of Ghana grows, the demand is going to be there, more and more investors are coming into Ghana, the economy is going to continue growing. Fortunately, we have discovered oil which is bringing in some money, so as the economy grows and expands, demand for real estate will grow over time. The future of the real estate market is great as for that I can assure you.
GH: Any final comments?
PT: Real Estate is here to stay. In New York, for instance. real estate has been the backbone of the economy before the other industries. You go to Chicago, you go to Los Angeles; Los Angeles has Hollywood and the other industries but Real Estate is the backbone of U.S. economy and that is how it’s going to be for Ghana in a few years.