The real estate market in Ghana has seen lots of investment in recent years.
A natural result of the growing infrastructural development in Ghana, real estate has followed closely to push the economy forward. People have put up homes for sale; shiny office towers have sprung up in town.
But there’s a little nuance to investing in real estate in Ghana. It helps to know where to put your investment cash so you can enjoy the best returns on your real estate. Or at least it helps to learn to invest smarter so your money doesn’t go down the drain.
This post aims to give you an overview of the Ghanaian real estate investment space so you know where to invest. Read on for more.
Is Ghana real estate a good investment?
As with any investment, it helps to ask whether it’s worth it. When you consider the cost of investing in real estate, you must ensure it’s a profitable option. Or at least one that holds some promise before you invest in it.
Many investors have asked if real estate investments in Ghana are a good investment option. And the answer has been an emphatic yes. While there’ll always be nuances to look out for, investing in real estate in Ghana has far more significant upsides than downsides.
But that’s not to say it’s all rosy the Ghanaian real estate. You’ll still have to do your research. And carefully curated and market data that you can trust is hard to come by.
Also, the cost of finance locally is ridiculously high compared with other jurisdictions. That’s a reality to know beforehand if you plan on borrowing money in Ghana to finance your real estate investment. And let’s not forget the long turnover periods of real estate.
However, with the help of a trusted real estate advisor by your side, you can make great strides and returns on your real investment in Ghanaian real estate.
Benefits of real estate investment in Ghana
Investing in real estate in Ghana has immense benefits. Here are a few:
Rapid capital appreciation
The value of real estate in Ghana has risen steadily over the years. While these rises hit buyers hard, many property owners aren’t exactly weeping. They’re watching the rising property prices push the values of their real estate investments higher. When you find the perfect real estate investment in Ghana, you can enjoy capital appreciation on your property.
And when it’s time to sell, you can do so at a nice profit.
Prpmising rental income
The demand for rental housing in Ghana is high, especially in the cities. When you invest in this rental real estate market in Ghana, you’ll position yourself to enjoy steady rental income from your income-producing real estate.
While rents for commercial properties have dropped, homes have seen higher rental values.
The impact of international investors in Ghana
Because real estate investments demand massive injections of capital (large-scale real estate investment, anyway), many Ghanaians are unable to raise the funds.
Add to that the corresponding high borrowing costs in Ghana, and few Ghanaians can invest heavily in the real estate industry. And that opens the door to international investors.
Many high-end apartments and commercial buildings in Ghana are owned – or backed by international investors. Of course, some have teamed up with local partners. Also, many of the target market and individual buyers are foreigners.
Maybe it’s easier for international investors to secure funding outside Ghana – and at more competitive rates. Backed by these deep pockets, it’s easy to see why and how these international investors play an integral role in real estate investment in Ghana.
Ghana’s expanding luxury real estate market
The luxury real estate market in Ghana has seen immense investment recently. It’s one of the hottest real estate submarkets in the country. Again, given the costs and price ranges, the target market is usually expats and other high-net-worth individuals in society.
Especially in Accra, some top neighborhoods like Cantonments, Airport, Ridge, Labone, and East Legon are the main hotspots of luxury real estate. You’ll find many mid-rise apartment buildings and modern homes in these areas. And the prices for the former start from $90,000, while some in the latter could easily eclipse the million-dollar mark.
But we can’t limit the expanding luxury real estate market to these neighborhoods alone.
You’ll find similarly priced luxurious properties in other areas of Accra, like Osu, Dzorwulu, Spintex, East Legon Hills, and Tse Addo. As Accra continues attracting many large multinational companies in the oil & gas and services industry, it’s easy to see why developers will prefer this option. As one of the most promising sub-markets in the Ghanaian real estate investment space, you can see why more investors are going in that direction.
But it doesn’t end in Accra.
In Kumasi, the upcoming Airport City Kumasi project is an exciting real estate development opportunity worth considering. Starting with the Kensington Heights Apartments, a suite of luxurious studio, one-, two-, and three-bedroom units, you can see how Kumasi’s luxury real estate market is taking shape.
The luxury real estate market in Ghana is one of the hottest. And it’s little surprise to see the investor dollars rolling in to keep things ticking.
Where to invest in the Ghanaian real estate space
The Ghanaian real estate industry offers many investment opportunities. You’ll have to research and determine your investment goals before deciding where to put your money. Hopefully, that research exposes you to the risks and potential returns of the various sectors and submarkets within the real estate space in Ghana.
Here are a few pointers to help you find the best Ghanaian real estate investment hotspots to invest your real estate dollars. Please note that this list does not exhaust all the real estate investment options available in Ghana.
Look at the major cities in Ghana
In most countries, the highest-performing real estate investments are in the major cities. Cities are commercial and economic hubs, and most of these functions require real estate. With the booming population and businesses, demand will always be high.
Even in challenging economic times, people will still flock to cities to look for work. And where people congregate, there’s an opportunity for real estate investment. In the Ghanaian real estate context, Accra, Kumasi, Takoradi, and Tema are the cities with the most real estate investment opportunities. And they still hold more untapped potential.
Do your research to identify the real estate needs in these cities, and you could set yourself up for a healthy real estate investment. Where in these cities should you invest?
Residential neighborhoods
Since all these teaming masses in our cities will require accommodation, investing in residential real estate has never been a terrible real estate investment option in Ghana. The options range from modern single-family units to shiny multi-family properties. Some areas in these major cities in Accra lend themselves more to residential real estate than others. Always look out for that.
Commercial properties
Retail and office spaces are another great investment option in cities in Ghana. Given the economic activities in these cities, someone has to provide space to facilitate these commercial activities.
Some areas are more suited to commercial activities and offer you the chance to collect the highest rents. Of course, as dictated by the market. Depending on the commercial activity you want your real estate investment to cater to, you’ll need to look close to the city center – or other hotspots for business.
Consider the peripheries of these cities
The peripheries are a sure bet if city centers and top residential neighborhoods aren’t available for your real estate investment. While the grade-A areas will command the highest property values, the city peripheries are a medium to long-term investment option. As cities expand, development will soon catch up with your new location.
For example, locations like Oyarifa, Ayi Mensah, Danfa, and Dodowa are real estate investment options in Accra. As are Dawhenya and Nsawam.
Waterfront areas
Waterfront real estate appeals to some people. If you’re interested in investing in real estate in Ghana, that’s also another option. As a coastal country, Ghana has many towns dotted around the coasts that make for great investment opportunities.
Risks in real estate investment in Ghana
As a developing country, Ghana’s real estate space presents some risks amidst the opportunities to investors. And these options will only keep expanding as the country grows.
Market risks
Like any developing economy, Ghana’s economy hasn’t always been the most buoyant in the world. Since 2022, many credit rating agencies have downgraded the country’s creditworthiness, signaling difficult financial times.
These economic challenges and constantly rising inflation will affect the real estate market. With land and property values rising the highest, some investors would understandably pout at the asking prices of some properties in Ghana.
Land administration issues
Land administration in Ghana has many inefficiencies. The land documentation process isn’t the smoothest. Many people have complained of facing bottlenecks in the system. Sometimes, some land owners sell the same parcel of land to more than one buyer, sparking legal battles (that can take years to resolve).
Inflation and currency risks
Ghana’s cedi has depreciated over 50% in the last year against major trading currencies like the dollar. If you hold or price your real estate in Cedis, that’ll affect you. Also, where you’re now developing a property, the currency depreciation and rising inflation will affect the cost of building materials. That could throw off your projections.
That said, no investment is without risk. And if you can find creative ways to manage these risks, your real estate investment in Ghana will yield positive returns.
In conclusion, real estate investment in Ghana is still a promising investment
If you’re on the fence about investing in real estate in Ghana, hopefully, this gives you a closer look at the real estate investment space in Ghana. There are still lots of growth opportunities. And you can take advantage of these opportunities to invest in a thriving real estate industry.
