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Ghana’s Housing Deficit: A Case of Greed and Insensitivity To The Average Ghanaian

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Ghana has a housing deficit of 1.7 million units. That’s highly alarming for a country that’s achieved middle income status with a population of 28.21 million. However, a cursory look at the property listings on meQasa.com, the country’s largest real estate marketplace reveals an overwhelming number of properties that can easily bridge that housing gap.

In an article titled Oversaturated and About to Crash?, Ernest Hanson of Denya Developers (a property developer in Accra) questions this seeming oversupply of property.

He writes,

“When driving around parts of Accra, casual observation of multiple “To let” or “For sale” signs could easily be interpreted as an oversupply of housing stock or an impending property bubble in the Accra real estate market.”

He brilliantly goes on to call the housing deficit for what it really is, an economic deficit. Properties are too expensive for the average Ghanaian. Modest 1 bedroom apartments in Accra are being rented out between $100 and $3000 and over.

Ghana’s per capita income is $1820 according to the Institute of Statistical, Social and Economic Research (ISSER). It’s complete bollocks for the majority of the population whose minimum wage is less than $10 per month. It’ll be frankly stupid for someone on such a low wage to rent any of the properties in that range. You can imagine how highly implausible acquiring property or land will be for the majority of Ghanaians.

This is not to say there aren’t cheaper rentals. Cheaper rentals in the capital Accra are harder and more tedious to find, are plagued by maintenance, co-tenancy, landlord and other issues and generally too good to be true.

Abraham Maslow’s hierarchy of needs puts shelter at the basic level, right next to food. For a country interested in bolstering its development, it is up to government to regulate the real estate sector and the various stakeholders, including brokers, developers and investors to play by the rules.

In another article questioning why properties are so expensive in Ghana, Ernest Hanson and Scott Murray cite the importation of building materials and cost of labor as strong contributing factors. That’s all fine after all, every business comes with cost and risk.

What is however troubling is how the brokers and developers are hell bent on making back their money within the shortest possible time. This also applies to property owners.

One tactic employed is to take illegal 1- 2 year advances that will break the banks of the people who need it the most. Considering Ghana’s per capita income, it will take quite some time for most people to cough up the money needed to pay for such advances. Even when they do, who’s to say they’ll have enough left to take care of furnishings or more importantly, take care of their other basic needs?

acquiring property

The Accra Housing Guide, a whitepaper on Ghana’s real estate sector aptly captures Ghana’s housing problem as such:

“There are a lot of beautiful habitable properties on the market whose price deters potential tenants. Some of such houses are justifiably expensive if you take into consideration the cost of materials used in their construction, but a majority of them are high priced simply because they are located in “prime locations” or the owners were told they stood to make more profit if they sold or rented at such a price.”

A response often given when property prices are questioned is that the questioner isn’t the target market. Which begs the question, who is? Is it the small pocket of expatriates and affluent indigenes who are fast learning to build their own properties?

twitter.com/JumiaHouseGH/status/921315114606845953

What’s the point of building homes if the majority of working class people who should be able to afford property can’t even by a far margin? And just like several people have noted in the tweet above, such high-end properties is probably one of the contributing factors to corruption.

For developers and investors looking to make their monies back, the question is, why can’t you spread your returns over an extended period instead of within a very short time?

With the present Nana Akuffo-Addo led government’s tax slash on real estate, perhaps there is some light at the end of the tunnel.

But knowing how things in Ghana work, such a slash could mean very little to the cost of accommodation in Ghana.

Unless drastic measures are taken to adjust the cost of property in Ghana, the housing deficit is only going to get much worse. Like one Twitter user questioned,

Are landlords looking for Ghanaians to rent their property or aliens with cyber dollars?

If you can afford some of the crazy rent rates in Accra, you might as well build/buy your own place.” https://twitter.com/Dee_Kae/status/932545748620791808


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