Why more investment is not making housing affordable in Ghana

Accra, Ghana – Ghana needs much than 1.8 cardinal further lodging units, but attracting concern to physique them is lone fractional the challenge. For millions of people, the deeper occupation is that the homes reaching the marketplace stay beyond their means.

That hostility ran done the Africa Real Estate Conference & Expo (ARCE), which brought developers, policymakers, investors and exertion entrepreneurs to Accra this week. While participants presented plans to grow construction, amended lodging concern and deploy caller technologies, their discussions pointed to a stubborn question: however tin Ghana marque lodging commercially viable for developers without pricing retired the radical who request it?

The stakes are considerable. Some 56.7 percent of Ghana’s colonisation lives successful municipality areas, yet lone astir 5 percent of Ghanaians tin spend lodging without authorities support. The spread betwixt lodging request and effectual purchasing powerfulness continues to signifier the market, limiting the scope of some backstage developers and accepted owe lenders.

Government seeks to unlock lodging finance

The authorities has introduced measures intended to trim borrowing costs and stimulate construction. The National Homeownership Fund has lowered owe rates to 8.4 percent, from 13.5 percent, portion a revolving money of 3 cardinal Ghanaian cedis (about $256m) targets nationalist assemblage workers with repayment periods of 15 to 20 years.

Authorities are besides seeking to revive the stalled Saglemi Housing Project, targeting the archetypal 700 units for March 2027, and person announced plans for a 200-acre Green City Project astatine Dedesua.

At the National Conference connected Housing Finance earlier this month, President John Dramani Mahama announced an allocation of 1 cardinal Ghanaian cedis (about $85m) successful the 2027 fund for the National Housing Fund. He besides highlighted the difficulties informal-sector workers look successful accessing mortgages, contempt earning regular incomes, due to the fact that they often deficiency payslips and accepted banking records.

“A strategy that cannot recognise these livelihoods excludes a important portion of our federation from the accidental to ain a home,” Mahama said, urging banks to make alternate ways of assessing borrowers.

Housing Minister Ahmed Ibrahim, who represented the president astatine ARCE, besides called for greater private-sector information successful affordable lodging and owe finance.

These interventions code important barriers, but their interaction volition beryllium connected whether financing reaches the households astir successful request and whether developers tin physique astatine prices those households tin sustain. Lower involvement rates cannot compensate indefinitely for costly land, infrastructure and construction.

The costs down the shortage

About 90 percent of Ghana’s lodging is built done idiosyncratic savings and incremental construction, portion owe penetration stands astatine conscionable 0.3 percent of gross home merchandise (GDP). The figures constituent to a marketplace successful which astir households indispensable concern operation themselves, often implicit galore years, alternatively than bargain completed homes done accepted mortgages.

Bako Ambianda, CEO of Backbone Capital Ventures and an ARCE keynote speaker, said the cardinal occupation was not a deficiency of request but the trouble of turning that request into viable lodging projects.

“Africa’s lodging situation is not a deficiency of demand,” helium told Al Jazeera. “It is simply a mismatch betwixt the outgo of delivering homes, the financing disposable to physique them, and the purchasing powerfulness and outgo patterns of households.”

Samuel Amegayibor, enforcement manager of the Ghana Real Estate Developers Association (GREDA), identified entree to concern and unafraid onshore arsenic 2 of the biggest obstacles facing developers.

Although borrowing costs person fallen from astir 30 percent to betwixt 9 and 15 percent, depending connected the bank, concern remains expensive. Land tin beryllium arsenic hard to secure, with ownership complications and inadequate infrastructure adding uncertainty and expense.

“Our onshore tenure system, you cognize the problems we have. It has ever been a situation for radical to get secured land,” Amegayibor said.

Even aft acquiring land, developers whitethorn person to widen energy and h2o connections and conception entree roads earlier gathering tin begin. Those costs are yet reflected successful selling prices.

High land, infrastructure and building-material costs proceed to propulsion homeownership beyond the scope of galore Ghanaians [Dwomoh-Doyen Benjamin/Al Jazeera]

Materials make different pressure. Amegayibor estimated that astir 70 percent of lodging inputs are imported, leaving developers exposed to import costs and taxes.

“Apart from sand, gravel and water, astir of the things are import-based,” helium said.

He argued that expanding section accumulation could trim reliance connected imports portion creating concern opportunities crossed the operation proviso chain.

“That shortage is simply a concern accidental for some the proviso broadside and the request side,” helium said, encouraging investors to found home manufacturing capacity.

The trouble is ensuring that little accumulation costs construe into little location prices alternatively than simply improving developers’ margins.

Rent exposes the aforesaid affordability gap

For tenants, the fiscal obstruction often comes earlier monthly rent begins. Although Ghana’s Rent Act of 1963 limits beforehand rent to six months, landlords routinely request 1 to 2 years up front, forcing tenants to find ample sums earlier securing accommodation.

Government enforcement measures reportedly introduced successful April 2026 transportation penalties of up to 3,000 Ghanaian cedis (about $257) oregon six months’ imprisonment. The FirstKey app is intended to assistance place non-compliant landlords and verify listings. Under the projected Easy Rent programme, the National Housing Fund would wage rent advances straight to landlords, with workers repaying the magnitude monthly.

Such measures could easiness the contiguous burden, but they bash not code the underlying shortage of homes wrong scope of mean earners. About 70 percent of Ghanaians autumn wrong the low- and middle-income bracket, yet overmuch lodging improvement continues to people higher earners.

The challenge, therefore, is not simply to summation supply, but to align that proviso with what households tin spend to bargain oregon rent.

Can exertion assistance adjacent the gap?

At ARCE, 30 PropTech startups presented tools intended to amended gathering performance, trim operating costs and modernise spot management. Their innovations connection imaginable savings, but their publication to affordability depends connected up-front costs, adoption and whether benefits scope households alternatively than lone spot owners and developers.

Isaac Ayitey Chris-Quaye, co-founder of NeuraHomes, said smart-home systems tin assistance residents show vigor use, amended information and marque better-informed decisions. His institution allows homeowners to present features gradually alternatively of paying for a implicit strategy up front.

“Traditional homes look affordable oregon cheap,” helium said. “Cheap due to the fact that you extremity up paying the terms for it successful the future.”

Chris-Quaye cited 1 lawsuit successful which spot managers reduced vigor costs by 20 percent annually, with the strategy paying for itself wrong 4 years. The effect illustrates the imaginable to trim operating expenses, though existent savings beryllium connected installation costs and vigor consumption.

“A astute location is not a luxury,” helium told Al Jazeera. “It’s quality dignity.”

William Atitso Amankwah, laminitis of AWA Roofing Sheets, is addressing vigor usage done a Cool Roof coating that reflects up to 60 percent of sunlight. He estimates that it tin little indoor temperatures by 2-5 degrees Celsius (3.6-9 degrees Fahrenheit) and trim cooling-energy depletion by 11 to 27 percent.

For a emblematic Greater Accra household, helium estimates yearly savings of 330–810 cedis (about $28–69). The coating adds an estimated 120–500 cedis (about $10–43) to the terms of a battalion of 20 roofing sheets. Whether the concern pays disconnected rapidly depends connected vigor use, installation costs, and energy tariffs.

Alternative operation methods whitethorn besides assistance trim costs. Acheampong Builderman, managing spouse of Builderman Estates, has developed homes utilizing sandbags and recycled materials but is seeking partners and backing to grow the approach.

“People were interested, but they wanted you to money everything,” helium told Al Jazeera.

The examples show however exertion and alternate materials could amended ratio oregon little immoderate costs. But neither integer tools nor energy-saving products tin independently resoluteness insecure onshore titles, inadequate infrastructure oregon costly improvement finance.

As Ambianda warned, “A beautifully designed app volition not marque an overpriced crippled affordable, supply a roadworthy oregon drainage system, little the outgo of superior by itself, oregon resoluteness an unclear title.”

Financing homes astir people’s incomes

For Ambianda, the solution besides requires rethinking however households suffice for lodging finance. Conventional mortgages often neglect to accommodate informal-sector workers whose incomes get regular oregon play alternatively than done regular salaries.

“We should halt assuming that the accepted owe is the lone way to homeownership,” helium said.

Builderman Estates, a lodging improvement successful Ghana, wherever precocious operation costs proceed to situation efforts to supply affordable homes [Dwomoh-Doyen Benjamin/Al Jazeera]

With borrowers’ consent, lenders could measure repayment capableness utilizing transaction histories, savings behaviour, mobile-money enactment and rental-payment records. Such approaches could bring much households into the ceremonial financing system, provided that affordability, information privateness and liable lending stay priorities.

Land argumentation besides needs attention. Ambianda called connected governments to marque secure, serviced onshore disposable done transparent and predictable processes. The Ghana Real Estate Developers Association (GREDA) has projected a National Housing Authority led by technocrats and insulated from governmental cycles, arguing that lodging transportation requires accordant argumentation beyond idiosyncratic governments’ terms.

For Ghana, the situation is to link concern with unafraid land, reliable infrastructure, little operation costs and financing suited to household incomes. Government programmes, backstage superior and technological innovation tin each contribute, but nary is capable connected its own. The measurement of occurrence volition beryllium whether they alteration developers to present homes that mean Ghanaians tin really afford.

“Africa’s lodging accidental is immense, but the reply is not simply to pull much money,” Ambianda told Al Jazeera. “It is to marque projects deliverable, financing accessible and homes genuinely attainable.”