The Emergence of Ghana’s Property Market in 2007

Ghana is the personification of an emerging market – it is a nation with immeasurable potential, restricted by so many legal and fiscal obstacles, determined to improve and actively attempting to develop and grow - and the emergence of Ghana’s property market in 2007 will be a direct reflection of all of these fundamental facts.

On the one hand the tourism potential in Ghana is huge which represents a multi-layered opportunity for an international property investor and on the other hand Ghana has severe lack of housing for local citizens which also offers investors seeking an alternative angle a real and workable investment opportunity.  However, both of these approaches are restricted by everything from a lack of transparency in the land title laws in Ghana to the lack of availability of affordable home financing for local workers.  The good news is that the 2007 Ghana budget has been announced and it contains a plan to solve at least some of the many issues restricting Ghana’s property market and for that reason alone 2007 could be an excellent year for investors to begin their due diligence on this stunningly beautiful nation which we are certain has huge potential to become a real estate success story.

Tourism Potential in Ghana

Tourism in Ghana currently contributes up to 8.5% of GDP and employs around 6.9% of the entire nation’s workforce; going forward it is predicted that the travel and tourism sector will grow by about 4.9 – 5% annually from 2007, but for the Ghanaian government that is not enough. 

When you realise just how rich Ghana is in terms of its natural attractions - from untouched white sandy beaches to an abundance of amazing wildlife - there is just so much potential for the development of an active tourism economy.  The Ghana Tourist Board has just started the active promotion of the nation particularly in America and their efforts are starting to pay off immediately.  In late 2006 Delta Airlines and North American Airlines started direct flights from the likes of New York to Accra, the capital of Ghana and Martin Mireku Acting Executive Director of the Ghana Tourist Board is targeting these airlines and other international tourism representatives with interests in Ghana to promote the attractiveness and potential of the nation to the wider world. 

Foreign direct investment from and into tourism could and should be huge…and the Ghanaian authorities know that and are focusing increased efforts on the promotion of tourism.  Investors seeking a bleeding edge market opportunity should be in Ghana and looking at ways they can positively exploit this market sector in 2007 before the wider world does awaken to the spirit and beauty of Ghana.

Local Affordable Housing

In recent years there has been a trend of rural to urban flow of migration – naturally enough, those from more rural and agricultural based communities have moved towards cities where investment has already arrived and where there are employment opportunities.  The trouble with this flow is that it has been strong and is sustained and there is just not enough housing to accommodate all those arriving.  There is a homelessness problem developing in some of the more densely populated areas of Accra for example and local investors with property in Ghana have been exploiting the demand by charging high rents and going against the 1963 Rent Act (Act 220) which stipulates that no more than 6 months rent can be asked for in advance and these greedy investors are demanding up to 3 years rent in advance – a situation that is impossible for many.

Efforts are now underway to get local developers to target the affordable housing market rather than the luxury second homes market for overseas buyers.  The government has announced incentives for constructors to build such housing starting in 2007, and for the next five years as part of the National Housing Programme 20,000 new homes will be built in Ghana annually.  Naturally enough investment in this sector is still required and those with a social conscience who want to actively participate in something that will return them a profit whilst benefiting a nation restricted by poverty should look at how they can get involved.

Problems Facing Ghana’s Property Market

Having touched on some of the efforts in place to improve the property market in Ghana it’s time to highlight remaining issues in order for an investor to make an informed choice about whether 2007 really is a good year to go in to Ghana.  Conveyancing, property ownership rights and laws relating to land title registration all need to be tidied up…at the moment there is a saying in Ghana that those buying resale properties are more likely to purchase litigation rather than land title and this situation clearly needs to be changed.  There is money in place and a plan of action agreed upon to begin registering every street and every home across the nation and that should get underway in 2007 but naturally it’s going to take time.

An additional problem is availability - or rather the lack of it - of affordable home financing for local buyers.  The vision that the current government of Ghana has is for a nation of middle income homeowners and at the moment their vision is an awfully long way away from being realised.  The target is for Ghana to become a middle income nation by 2015 but in a recent round table discussion in Accra Dr Kwabena A. Anaman the Head of Economics Centre and Director of Research of the Institute of Economic Affairs stated that the rate of growth currently being experienced in Ghana is not sufficient for this target to be achieved.  According to Dr Anaman the current GDP in Ghana is USD 10 billion and it will need to reach USD 30 billion by 2015 for Ghana to be considered a middle income nation.

The need for local access to affordable home finance becomes even more critical then with this in mind.  On the positive front great efforts are being made by the likes of Canada Mortgage and Housing Corporation and Développement International Desjardins who have a contract in Ghana from 2007 to develop regulatory reforms in the mortgage market, and also the American company Broad Cove Partners Inc which is an emerging market financial advisory firm.  Broad Cove are working on the development of a new USD 30 million long term property finance facility to assist with the aforementioned shortage of affordable housing and mortgage finance in Ghana.

Efforts Are Underway to Improve the Real Estate Marketplace in Ghana

So, in conclusion as we hope we have demonstrated, while there are true emerging market problems affecting the property market and the investment potential from real estate in Ghana at the moment, everything is being done that can be done to positively address and solve these problems.  The most important factor to keep in mind therefore is that Ghana knows it has potential and is doing all it can to achieve this potential…and an investor seeking massive opportunity, low start up costs and huge long term potential for growth could well find that 2007 is the year for them to explore Ghana.

Special Reports: Property News for Ghana

Ghana Property Buying Guide
Because of land registration issues in Ghana the investment property buying process is quite complex and requires good legal assistance

Ghana Property Investment Potential
Property investors seeking an emerging real estate market offering unlimited potential with residential and commercial opportunities should consider Ghana

Ghana Property Investor’s Country Guide
The long term potential in the real estate market in Ghana for property investors is massive.