An Engine for Economic Expansion

In the face of recent macroeconomic pressures, including inflation and currency depreciation, the real estate sector in Ghana has adapted, presenting compelling opportunities for strategic investment. Accra, the nation’s capital, is one of Africa’s fastest-growing real estate markets, attracting increasing investor interest. The sector’s contribution to Ghana’s GDP remains substantial, with the construction sub-sector exhibiting particularly robust growth in 2024. This growth is underpinned by fundamental drivers such as a rapidly expanding population, accelerating urbanisation, and the rise of a discerning middle class, all of which fuel a sustained demand across various property segments.

The real estate sector is the fourth largest contributor to Ghana’s GDP, consistently accounting for approximately 8% annually. This sustained momentum in construction indicates a healthy pipeline of projects and a strong belief in future demand, positioning the sector as attractive for direct development investments. Ghana’s population has been steadily increasing, reaching an estimated 34.1 million in 2023. Concurrently, rapid urbanisation continues, with over 56.7% of the population now residing in urban areas. This demographic shift generates substantial demand for both housing and commercial spaces across the country. Furthermore, stable economic expansion has led to increased disposable incomes and enhanced purchasing power among individuals, particularly within the rising middle class.

OFFICE MARKET

The office real-estate market in Ghana, primarily concentrated in Accra, has shown signs of a robust recovery following the immediate post-pandemic period. Monthly prime rents in Accra, which had declined in the aftermath of the pandemic, have since recovered. This rebound reflects a renewed demand for quality workspaces. The recovery of prime office rents and the rise in occupancy rates, particularly for Grade A properties, despite initial post-pandemic oversupply, point to a strong preference for modern, high-quality, and potentially ESG-compliant office spaces.

RESIDENTIAL MARKET

Ghana continues to grapple with a significant housing deficit, estimated at 1.8 million units as of 2024. This deficit is projected to grow by an estimated 100,000 units each year, while only 40–50,000 new units are being constructed annually. This situation underscores the immense and sustained demand for housing across all income brackets, presenting a critical investment opportunity, particularly for developers capable of delivering at scale and cost-effectively, potentially with government support, given the market’s inability to self-correct the supply–demand imbalance.

Significant efforts have been made to improve land administration and management. A US$85 million project is underway to digitise land records and develop digital maps. The digitisation of land records under this act is a critical long-term initiative that could significantly de-risk real estate investment by addressing fundamental land ownership and titling issues. Complex land acquisition processes, chieftaincy disputes, and a lack of digital records have historically deterred large-scale private investment, causing delays and increasing costs. A successful digitisation effort would bring transparency, reduce disputes, streamline processes, and enhance investor confidence by providing clear, verifiable land titles.

RETAIL MARKET

Ghana’s retail industry has demonstrated remarkable resilience, especially in the face of inflationary pressures that typically dampen consumer spending, pointing to a fundamental strength in consumer demand, making well-located and modern retail spaces an attractive investment. Prominent retail brands such as Shoprite, Max Mart, Koala, and Melcom continue to operate primarily from privately owned malls on a tenancy basis. Recent trends also indicate a diversification in retail locations, with some retailers opting for converted residential developments and others operating from medium-sized retail plazas.

INDUSTRIAL MARKET

Ghana’s industrial hubs, primarily located in Accra, Tema, Kumasi, and Takoradi, play a crucial role in driving economic growth, with Tema being the largest, incorporating the Free Zone Enclave. The Ghanaian industrial market, while relatively compact, has faced subdued activity amid recent economic challenges. It is predominantly composed of older Grade B units. The shift from high vacancy rates to increased leasing activity and anticipated full occupancy for Grade A warehouses indicates a strong recovery and a distinct ‘flight to quality’ within the industrial sector.

SECTOR OPPORTUNITIES

Investment in land in areas such as Kasoa, Gbawe, Aburi, Peduase and their surroundings offers substantial potential for significant future value appreciation in Ghana’s real estate sector.
Constructing single-family houses ranging from two to five bedrooms to reduce the housing deficit of approximately 1.8 million houses and match the projected growth in the percentage of middle-class households.
Investing in luxurious residential apartments in prime areas like Cantonments, East Legon, and Roman Ridge to cater to the growing demand from expatriates relocating to Ghana for business purposes, providing them with state-of-the-art facilities and amenities.
Investing in smaller apartment buildings situated near or on the campuses of tertiary educational institutions to help address the shortage of residential facilities on some university campuses in the country, catering to the accommodation needs of students and faculty members.
Developing retail facilities in prime locations such as Accra, Madina, and Kumasi offers lucrative investment opportunities due to their high levels of retail activity and the growing demand for retail space in these areas.
Implementing the One District One Factory (1D1F) initiative presents a lucrative opportunity for warehousing, especially as factories increase their production of manufactured goods for both local distribution and export.

INVESTMENT INCENTIVES

Ghana provides tax incentives to real estate companies to carry forward losses incurred in the first three years of operation.
Investors in real estate are allowed free transferability of capital, profits, and dividends.
Ghana is a signatory to the World Bank’s Multilateral Investment Guarantee Agency (MIGA) Convention and has Double Taxation Agreements (DTAs) to rationalise tax obligations of investors in order to prevent double taxation.
The government is also implementing its digitisation agenda by completely digitising the National Land Registry in Ghana.

FACTBOX

Over the last decade, Ghana’s housing sector has been shaped by five main factors, namely, socioeconomic development trajectory; population growth, urbanisation, and demographic change; growth and activities of the private sector and other non-state actors; government interventions and investments into the housing sector; and sustainability and response to changes in the natural environment. This profile starts by exploring the effects of these factors on the growth, structure, and transformation of the housing sector. Ghana’s socio-economic growth in the last ten years has been characterised by notable transformations and challenges, which have contributed to the current performance of the housing sector. For instance, in 2021 Ghana’s GDP per capita was recorded as US$2,363, a marked improvement from US$716 in 2009. Real GDP growth per annum was also 5.4% in 2021.

Associated with the country’s social and economic growth trajectory are rapid population growth and urbanisation trends. Ghana’s population reached 30.8 million in 2021. Growing at a rate of 2.1% per annum, this is a 6.1 million increase from the 24.7 million recorded in 2010. Again, its urban proportion has increased from 50.9% in 2010 to 56.7% in 2021 – higher than previous intercensal periods. The country’s population is generally youthful, with about 58.2% being 18 years or older. However, the proportion of children (0–14 years) declined from 41.3 percent in 2000 to 35.3% in 2021, while that of young people (15–35 years) increased from 34.6% in 2000 to 38.2% in 2021. Thus, as many as 73.5% of Ghana’s population are below 35 years. Again, the population is dominated by females (50.7%), while 58.1% fall within the labour force. The foregoing population characteristics have important implications for Ghana’s housing sector. For instance, with an urbanised population which is youthful and largely employed, adequate accommodation is gravely needed.

Alongside Ghana’s population dynamics and characteristics there has been a steady increase in housing stock. For example, residential structures increased in the last decade by 72.8%. A number of factors have contributed to the increases in housing stock. These include foreign and local private investments, particularly in real estate and self-built housing development, and the emergence of informal settlements and slums, with increasing rental housing units.

Source: Ghana Housing Profile 2024; UN-Habitat.