The average Ghanaian purchase house asking price in June 2022 was 3.7m Cedis or $455,224 (Kuro Analytics Data Lab) which would rank 16th across global cities above Melbourne and below Sydney if you were to use the CBRE Global Living Report data. Meanwhile rent prices average at 4000 cedis or $492 per month which ranks 32nd globally $170 more expensive than Bangkok in 2020. There are several contributing factors that explain some of the nuances for why Accra is so expensive.
- Cash driven society
Unlike developed western societies like the UK and US. The housing market in Ghana is fuelled by cash as supplementary credit is extremely expensive. Some developers are also cash funding so will wait longer to achieve the right return rather than accept a lower price driven by demand conditions as debt repayment pressures are less severe.
- High mortgage rates
In Ghana any home loan can see you paying near 30% in interest on a mortgage payments depending on circumstance which is almost 10 times what a typical UK mortgage may work out to be. The affordability criteria also differs with a more American style debt as percentage of income approach as opposed to a UK style borrowing based on multiple of income.
- Unstable local currency
Often Landlords and developers are attempting minimise risk against an unstable income. The Ghanaian Cedi has seen a 68% drop against the pound and 84% drop against the dollar over the last 5 years. As result you often seen mid to high end properties priced in dollars to mitigate constant downward pressures on the Ghanaian Cedi.
- Lack of metropolitan transport
City planning in Ghana has left a lot to be desired when it comes to navigating Accra. Prime schools attractions and amenities are often clustered together and the direct routes in and out of these areas are often riddled with slow moving traffic. All forms of transport are vehicle based as mini buses or “ tro – tro” occupy and complicate slip roads and motorways creating huge congestion. So to be close to best amenities inflates the price massively.
- Unrealistic Expectations
Related to the previous pints around cash driven society there are a lot of unrealistic expectations across accra a lot of high end property developers appealing to a very small relatively Elite market with the over used promise of luxury. Normally with high supply and low demand, price points are due to fall, however with cash invested and investors seeking optimum returns prices remain less elastic to changes in demand. What a quick search on youtube will show you is there are high levels of expensive properties looking for both buyers and renters which a lot of time remain unbought and un tenanted for long periods.
