Ghana's Housing Sector Progresses Amidst Challenges

According to the Ghana Statistical Service, Ghana's housing landscape has shown tremendous development, with a dramatic 33% reduction in the housing shortfall, falling from 2.8 million in 2010 to 1.8 million in 2021. This favorable change can be ascribed to a growing real estate market and a staggering 72.8% growth in residential constructions during this time period.

The continuous urbanization trend, particularly in major cities like Accra, Kumasi, and Takoradi, has naturally led to a surge in demand for residential facilities. Recognizing this, both current and past governments have implemented various policies, laws, and infrastructure developments aimed at creating an enabling environment for the proliferation of residential and commercial properties.

Among these measures are the Real Estate Agency Act (Act 1047) and the Land Act 2020 (Act 1036). Moreover, through the National Housing and Mortgage Fund, the government has collaborated with financial institutions such as GCB Bank and Stanbic Bank Ghana to provide subsidized mortgage rates, often falling below 15%, especially for public sector employees. Furthermore, first-time property owners can also enjoy tax incentives in the form of mortgage interest rate tax relief.

Despite these commendable policies and regulations aimed at bolstering the national housing stock, affordability and availability remain persistent challenges. These issues are primarily driven by low household incomes and high borrowing costs, that make it difficult for individuals to save and invest in property acquisition.

Land disputes and litigation pose significant challenges to real estate development in Ghana. Many landowners frequently sell the same plots to multiple buyers, leading to protracted legal battles over ownership rights. This results in financial losses and substantial delays in real estate projects.

Another hurdle in the path to affordable housing is the impact of inflation and currency depreciation. The Ghanaian cedi's depreciation against foreign currencies often leads to higher material and construction costs for property developers.

Recent changes in monetary policy have introduced additional challenges. The Central Bank of Ghana raised its benchmark monetary policy rate to 30% during its July 2023 meeting in a bid to control rising inflation. Consequently, lenders have raised their mortgage rates, placing increased pressure on prospective homebuyers.

In conclusion, Ghana's housing sector has made significant strides in reducing the housing deficit, thanks to a thriving real estate industry and government initiatives. However, persistent challenges such as high borrowing costs, lower household incomes, land disputes, rising inflation, and monetary tightening continue to test the resilience of the housing market. Addressing these issues effectively will be crucial in ensuring sustainable growth and improved access to housing for all Ghanaians.