Why Accra’s Luxury Apartment Market Is Booming

Why Accra’s Luxury Apartment Market Is Booming

Luxury apartments in Accra are the new hot thing. That market has been heated for some time now.

Look around, and you’ll find many beautiful luxury apartment buildings adding a touch of class to town. Drive through some of the high-end neighborhoods of the city, and you’ll see cranes reaching for the skies, further evidence of what’s to come. 

As a real estate broker in Accra, I’ve entered a few such buildings, and what I saw blew me away. You’ll find these luxury apartment buildings offering studio, one, two, three, and four-bedroom configurations at different price points, starting at around $90,000. Throw in a few penthouses, and the game is on. And there’s more.

Many of these luxury apartments also provide state-of-the-art fitness facilities, sports complexes, swimming pools, and rooftop bars. Truly, luxury real estate in Accra is in a great spot.

A new submarket

Within the broader real estate market in Accra arises a submarket of luxury apartment buildings. And these luxury apartments in Accra are mostly concentrated in a few suburbs: CantonmentsLabone, Ridge, East Legon, and the Airport residential areas. That said, you’ll find more beautifully-built high-end residential apartments in other areas like North Kaneshie, Tesano, Osu, and Spintex.

The sales prices are competitively similar. As are the rents and the yield rates the developers promise. Yes, shop around, and you’ll find a slight discount here and there or a few variations, as no two properties and locations are the same.

But this luxury apartment submarket in Accra has set up a uniform playing field. That keeps sellers and renters informed.  As a crucial component of the real estate space in Accra, here’s why the luxury apartment space in Accra keeps thriving.

Overall national prosperity

Before the COVID-19 pandemic and insane inflation knocked the Ghanaian economy off track, Ghana was one of the fastest-growing economies in the world. At a point, a single-digit inflation rate was evidence enough of that growth. With that growth came more investor dollars and many multinational companies. And that meant finding residential spaces to house these ex-pats. 

And a suitable real estate investment asset for those dollars. Those shoots of prosperity added to the growth of the luxury real estate space to serve as homes, offices, and investment vehicles. While the Ghanaian economy hasn’t been buoyant in recent years, many observers and investors expect things to rebound soon. 

And while they await that turnaround, they don’t mind proceeding with their real estate investments and developments to take advantage of the upturns.

An ever-increasing (effective) demand

Speaking to a few luxury apartment builders in Accra, they tell me some of their properties were snapped up even before completion. 

Others also told me they had buyers making a beeline to their properties the minute the properties hit the market.

And true to form, many luxury studio, one and two-bedroom apartments in some developers’ portfolios are sold out. In some cases, investors bought them to let to tenants later.

Because of this effective demand, suppliers can’t wait to provide more luxury housing units in Accra. Whether it’s a normal market or not, whether or not the luxury real estate submarket will revert to the mean, the demand is high right now.

And on the back of those high demand levels, it’s easy to see more developers venturing into the high-end real estate space in Ghana. As the owner of a real estate advisory company in Ghana, I would advise any investor willing to break ground in Ghana’s real estate industry to consider luxury real estate.

Photo by Jimmy Chang on Unsplash

Great for diversification

Luxury real estate development in Accra is a promising option for investors to diversify their (real estate) investments

As one of the fastest growing economies in Africa, many investors willing to invest in real estate in a growing economy to diversify some market-specific risk in advanced countries shouldn’t overlook Accra.

While real estate in Ghana has inherent risks – doesn’t every market have one? – the luxury apartment asset class in Accra has other unique benefits that make it worth investor dollars. With some market research and an appetite for the risks in Ghana, you’re looking at a promising asset class worth your attention.

What Accra’s luxury apartment boom means

Increased competition among suppliers

As more developers join the luxury real estate development race, they may push themselves to improve. And that increased competition is good news for buyers.

For one, as supply increases, prices should naturally drop. Yes, it’ll be tough to see significant price drops in a tight submarket with a corresponding high demand, but when supply finally exceeds demand, the market will react. 

It won’t be unusual to see rental values and sales prices drop.

Other complementary uses will benefit

Accra’s luxury apartment market doesn’t operate as a standalone submarket. There’ll always be complementary uses to take advantage of these developments. Buyers and tenants of these buildings will shop nearby, travel around town, and put their kids through school. These others will come up in response to the thriving residential real estate.

They’ll also need office spaces to work in. This cycle means the various complementary land uses around these luxury real estate developments will benefit indirectly.

Higher investor confidence leads to more foreign investment

That we see more luxury apartments in Accra springing up signals one thing – more investors are willing to sink some cash into that industry. And a thriving real estate industry – the high-end space, no less – sends positive signals to other investors.

If one of the riskiest, illiquid, and capital-intensive investment classes keeps attracting millions of investor dollars, other investors could take that as a positive sign.

Developers poised to supply more luxury apartments in Accra

Accra’s luxury real estate will keep thriving in the short to medium term. With land values in Accra ballooning, it’s only natural that high-end developments follow to make the highest and best use of the spaces. 

For developers and sellers, that’s good news; for renters and buyers, not so good news. For those priced out of the market, that’s even worse news. Until something dramatic happens, Accra’s luxury apartment market isn’t slowing down soon.

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