Q&A: How are property prices determined in Ghana?

Most of the time, a lot of people wonder how developers come up with the property prices. In today’s questions and answers, we provide a breakdown of what goes into property pricing in Ghana.

Q: What factors that go into pricing real estate in Ghana?

A: The price of real estate in Ghana can be accounted by the interest rate on loans from banks, prices of lands and the cost of building materials. According to the Executive Director of Ghana Real Estates Developers Association, Sammy Amegayibor, the price of the real estate is dependent on the level of appreciation of the Ghanaian currency, “If you are a business-minded developer, you will include the cost of the property, your profit margin and the interest rates charged from the bank to make up the selling price of the property.”

In Ghana, lands can be bought from the head of families or the chief. “A simple issue like the land acquisition also adds a lot of cost to a project. We have situations where we, the developers, face difficulties when acquiring the land. As a businessman you have no choice than to pass the cost on to the consumer.” Mr. Amegayibor added.

Costs of building materials also affect the price of real estate in Ghana. Most of the materials used in construction are imported into the country. “The costs of building materials also affect the price especially if they are imported.  Prices of imported building materials are high and builders need the foreign currency to pay for these materials, therefore increasing the price of houses.” according to Sammy Amegayibor.

Q: Will the price of real estate go down in Ghana at some point?

A: To this question, Mr. Amegayibor answered, “Property price in Ghana can go down when the process of acquiring lands are streamlined, the issue of import duty which also increases the price of buildings are reduced and when builders are encouraged to use materials that are made locally. If all these measures are put in place, prices for building will go down and that will increase the demand.”

 

 

 

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