Real estate in Ghana thrives the most in Accra, its most active real estate market. That buzz won’t go away soon, given the expanding boundaries!
That makes investing in real estate in Ghana, especially Accra, a mouth-watering prospect. But how do you go about it, especially if you’re dipping your toe in the complex world of real estate investing in Ghana, let alone Accra?
In this post, we’ll discuss many points anyone who desires to invest in real estate in Accra will need to know. While we can only cover so much in a blog post, you’ll still find many helpful gems in this piece. Hopefully, it paints a clearer picture of the real estate space in Accra and how to get started investing.
Overview of Accra’s real estate market
Accra’s real estate market goes high and wide – from the shiny office buildings in the city center to the newly built homes at Ayi-Mensah. Search around, and you’ll find moderately-priced buildings far from town to the million-dollar properties in the most exclusive neighborhoods.
And then there are tons of options in between these extremes. Further, from the rundown to shiny hotel buildings – and many options between – you’ll find a mix of alternatives in the recreational space. Whatever your property needs, you’ll find many options on both sides of the price range. And while demand for real estate is high in some sub-markets, it’s fallen fast in others.
For example, demand for grade-A office space has dropped somewhat, leading to rents falling fast. Experts finger increased supply and challenging economic conditions. Either way, the market has reacted and driven down the rent per meter square from a high of around $35 to the $20-$25 range.
Conversely, demand for residential rental property has spiked, pushing up prices. Yes, overall construction costs and inflation have played a part in that. But isn’t it surprising the reverse is happening in the commercial space? It means you can’t rule out the power of demand.
Overall, residential real estate values in Accra are the highest they’ve ever been across the board – for short stays, long-term leases, and sales. The retail and office space values have tumbled a bit.
Why real estate investing in Accra appeals to investors
The real estate market in Accra is the busiest. Drive around, and you’ll see the many construction projects going on. Look at the various listing platforms online, and you’ll find that most of the properties on the market are in Accra. What drives investors to pump their funds into the real estate space in Accra?
Accra is a commercial and administrative hub
Since Accra is Ghana’s commercial and administrative capital, there’s no shortage of interested persons trooping to Accra to transact business. Many local and multinational companies are also headquartered in Accra, while others have many branches around town.
Further, most diplomatic and foreign missions in Ghana are in Accra. All these people live and work in Accra. And it means the real estate market has to respond to meet their needs. That’s one reason Accra is the real estate investment mecca in Ghana.
Complementary living experiences
Accra also has many facilities that complement the overall city living experience. And it means those facilities attract even more people to Accra, further boosting the demand for real estate. For example, with the convenience of an international airport, you can see why more people prefer Accra to other cities in Ghana.
Also, with many shopping malls like the Marina Mall, Atlantic Mall, Accra Mall, and the West Hills Mall, living in Accra makes for an exciting experience. We can also talk about the many restaurants in Accra, the hospitals, and good schools across all levels. More pull factors to Accra, pushing the demand for real estate investment higher.
Property values in Ghana have appreciated the highest in Accra than in any other city. And for investors willing to enjoy higher values on their real estate investments, investing in Accra makes all the economic sense. While many believe real estate prices in Accra are abnormally high, the fact buyers agree with those valuations tempts more investors to join the fun.
Accra’s boundaries are blurring by the day. Okay, except where the ocean meets land. On all the other sides, Accra has rapidly expanded to catch up with other adjoining towns. And that expansion, a natural consequence of urbanization, is set to continue.
That means more people are still in Accra’s catchment area, with access to the city center for work and business. With that, Accra remains a top real estate investment destination. There’s always the potential for property prices to rise, making those real estate investments worthwhile.
Growing demand for real estate in Ghana
The thriving population has led to an increase in the demand for rental properties. As more people – internally and from abroad – move to Accra to work, they’ll all need homes. Some may not own property but will prefer to rent.
Others may be unable to purchase property (lest we forget the unaffordable mortgage rates in Ghana). For these people, renting may be the next best option. And this increasing demand for rental housing tempts investors.
Why you should invest in real estate in Accra, Ghana
Of all the cities in the world for your real estate investment, why choose Accra, Ghana? Accra differs from major real estate investment hotspots like London, New York, Dubai, and Singapore. But if you’re looking for a diversified market away from those big hitters, Accra should be on your list.
The exclusive neighborhoods command crazy property values
In Accra’s most exclusive areas, like Cantonments, Ridge, Airport, Labone, and East Legon, properties command enviable rents that rival many other cities globally. A studio apartment can easily ask for $1,000 in rent. And it only goes up from there on. These numbers may not appeal to most locals, but the luxury real estate market in Ghana promises excellent investment value.
Lower tax rates
Compared with the recent stamp duty hikes in Singapore, Ghana’s 1.5% is no match. And there’s no mansion tax like in Los Angeles. Yes, the nuances in each city differ from those in Ghana. And there are tons of differences in both markets. But if you’re looking for one of those low-tax markets for your real estate with a potential for high returns, real estate in Ghana should be on your list.
A truly global mix of potential buyers that makes you feel at home
Many players in Ghana’s real estate market aren’t necessarily Ghanaians. There’s a diversified mix of global investors – both small and large scale. And even the most active Ghanaians are high-net-worth individuals who know how to play the game. You’ll also find many institutional investors playing their part in Accra’s real estate market.
You won’t feel lost operating in this market.
Types of investment property in Accra, Ghana
While everyone would love to gush about the real estate investment potential of Accra, you still need to look at the investment options before you make a move. Here are some real estate investment options in Accra worth considering.
Yes, Accra may be a concrete jungle. But there are still a few patches of investment land available. Admittedly, these are harder to come by. But when you dig around, you can find a great option. On the outskirts of Accra, you’ll find more options with the investment land. This alternative could afford you more flexibility to determine the type of use to put the land (subject to planning permission, though).
Accra has many single-family homes on the market. You can find one on many property listing portals. You can also work with a trusted real estate broker to get you one. With this option, you can buy, hold/rent it, and sell it when the price appreciates.
Single-family homes offer extra flexibility, as you can use them for residential and commercial purposes. Given the rise of remote work and the increasing transport costs, that option appeals to some users.
Apartments in Accra are rising in popularity. And they’re the most common real estate investment option in Accra. They also offer you the flexibility to rent or sell outright. Given the limited land in Accra, you can understand why investors will opt for that option.
You also get to go as high as you want and charge more for the higher units that give great views. The penthouse is a big selling point for many luxury apartment units in Accra.
Commercial real estate
Residential units may be all the rage in Accra. But commercial real estate is another investment option that holds its own against other types, especially in buoyant economies. Office and retail spaces are the most common examples of commercial real estate. But we also have warehouses, industrial lands, and petrol filling stations generating healthy returns on real estate investments in Accra.
The recreational real estate space comprises hotels, restaurants, spas, bars, pubs, event centers, and cafes. These real estate investment options usually require expertise in other areas, say the hospitality industry. But where you have that know-how or can get a partner, you’ll find recreational real estate in Accra a worthy investment. People still eat, want to be entertained, and hold events. And someone has to cater to those needs.
Steps for starting real estate investing in Accra
We’ve seen the many potentials and benefits of investing in real estate in Accra. But how do you get started if you’re interested?
Know your numbers
Before you start investing in real estate in Ghana, and especially Accra, you must know your numbers. Know what you expect to reap from your investments, how long it’ll take you to get there, and how much you’re willing to risk.
We’d all love to predict what’ll happen in the future. Except we don’t know what will happen. But that doesn’t bar you from dreaming and setting some goals. If you’re unsure how to do that, you can talk to a real estate expert to help you. Knowing your numbers makes it easier to pick which investment type will get you there faster.
Search for the right investment type
We’ve seen the many real estate investment options available. But some will serve you better than others. And also, depending on the area, some options won’t be a great investment decision. Look for the various investment types you love or hold the most promise.
If you’ve considered the first two options, you’ll have a fair idea of what you want and what it’ll cost you to get there. Now you have to decide how you’re going to finance it. You can go equity or debt financing, but each has pros and cons. Before you opt for any financing option, always look at flexibility, liquidity, leverage, and costs.
Work with a trusted real estate professional
Once you have the first three steps locked in, look for real estate professionals to help you invest.
Depending on your level of experience in real estate investing, you may not need an investment advisor. But if you’re starting, you probably need someone to help you understand some details about real estate investing. We’re available to help you.
Also, you may or may not need a real estate broker. If you’ve been in Accra’s real estate marketplace for long, you may have built a web of industry professionals you can fall on. If you’re only starting, though, you’ll need a helping hand in the form of a trusted real estate broker. We’re on hand to help.
Tips for successful real estate investment in Ghana
Know the market
You can’t invest in any real estate space and hope to enjoy success if you don’t know the market. And that comes from research. As part of your research, estimate the demand and supply of the real estate asset type you want to invest in. And how quickly these demand and supply forces move. Also, find out the factors that affect these conditions.
For example, if you intend to invest in a grade-A office space, you should look at the current and projected demand and supply. These crucial factors will affect how fast you can recoup your investment, if at all.
Diversify your real estate investments
Ideally, you want to do more of what’s working well and less of what’s not working. When you invest in real estate in Ghana, you want to load up more on the most promising class. Those returns may even tempt you to put all your investment dollars into one basket.
But that’s also risky. Real estate is cyclical. Further, real estate hardly stands alone. Many other market variables can affect the success or failure of your real estate investment in Accra. For example, if pre-Covid, you put all your real estate investment eggs into a profitable office space in the market in Accra, you’d be reeling at the falling rents and rising vacancies in 2023.
But if you had some investment in residential real estate, you’d be in a better position, as that sub-market is still strong.
Real estate often isn’t a short-term game. Yes, in hot markets, properties can change hands fast. But those are the exceptions. Generally, real estate is a slow-moving industry. And given the many cycles, bubbles, and links to other sectors, your returns won’t always come fast.
Reality could bite, forcing you to lower rents for your income-producing real estate investment in Accra. But with patience, you’ll see an uptick in fortunes.
Conclusion: Investing in real estate in Accra is promising
If you’ve thought of investing in real estate in Ghana, Accra has probably crossed your mind. The real estate market in Accra holds immense promise. But there’s work to do before you meet those investment goals.
If you can give yourself the time to do the necessary checks and follow the tips in this guide, you’ll give yourself a shot at succeeding in Accra’s real estate investment space.