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THE GHANA HOUSING MARKET FORECAST 2018

Dr. Alexander Tweneboa Housing Consultant Past President GREDA
Sat, 16-Dec-2017, 08:44
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It will be very naïve to attempt to forecast the Outcome of any Industry especially in Ghana without firstly reviewing the recent past of not only the industry but the economy in which that industry prevails.

The fortunes of the Housing sector are strongly coupled with the fortunes of the Macro Economy in Ghana.

Over the past two decades Ghana has become a landscape of political stability which enabled it to achieve phenomenal Economic growth within its region, surpassing most of its neighbors in terms of. During this period we witnessed a rapid change in Ghana’s Real Estate Industry albeit mainly driven by FDI (Foreign Direct Investment) especially in Accra the Capital.

 With its current population of 27.4 million and a population growth rate of 2.3% and a growing urban middle class one would think that developers are smiling. However over the last few years the Ghanaian Economy has stalled from a high of an Economic Growth Rate of 14% in 2011 to 5.2% for 2016 with an increasing inflation (18.9% in May 2016). An average lending  rate of 28.57% in 2016 with the currency loosing over 60% of its value against the US Dollar over the past five years have all taken its toll on the economy and in turn the Housing Sector being no exception.


Dr. Alexander Tweneboa  

Housing Consultant  Past President GREDA

The recent past economic slowdown was further exacerbated by the continuing energy crises that the country went through with its erratic electricity supply also having a detrimental effect on the Housing sector and market. The cedis depreciation caused an increase in the price of imported building materials, with a consumer basket of related housing inputs from cement , water, electricity, gas and other fuels saw a 45% rise between January 2015 and January 2016.

The above factors alone have made it increasingly difficult for the Average Ghanaian to be able to acquire a Home, where home ownership in a country such as Ghana not only provides shelter but is also a store of wealth and a measure of Social class and prestige.

Coupled with the above factors the Country faced a general Election in 2016 and as in most election years there is a general slowdown of Economic activity as most people take the stance of let’s wait and see the outcome prior to making any large capital investments. 

The Ministry of Works and Housing recently stated that the Housing deficit in Ghana stood at 1.8 million units and that there would be a requirement to deliver in excess of 100,000 units per annum just to stem the deficit from increasing. 

The Ghana Real Estate Developers Association (GREDA) whose members are the primary builders of organized Housing in the Country is constrained by certain Economic factors as well as others in delivering upon the challenges of Housing the Ghanaian Population. Most of the GREDA members are delivering Housing in the urban areas and at Prices to satisfy mainly the high middle to upper income earners.

Although after the 2016 General Elections there was a change in the government it is still too early to ascertain whether the initial policies introduced by the new administration will give a boost to the sector. The removal of the 5% flat rate V.A.T on the sale of New Houses amongst others.

The above economic situation of recent times along with the perennial problems of little credit funding for the sector and with a ever growing urban population currently standing at 54.04% with a growth rate of 3.51% has had a negative effect on the Housing market over the recent  years while the demand is on the ascendency.

In 2018 we will continue to see the Speculators those who are developing at the high end of the market of the Housing Sector but even then their growth will not be as prominent as in recent years as there are currently quite a few of such developments that have been unable to attain their allotted targets.

But in 2018 unless the Government has some drastic measures I feel it will be much the same. We talk of Housing our people but yet little is done for the majority.

By Dr. Alexander Tweneboa

Housing Consultant

Past President GREDA

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