Real Estate Sees Negative Performance In GDP For First Quarter 2022 – Is Ghana's Real Estate Market Going To Crash

The services of Ghana's real estate market have always been merit in the computation of Ghana's real Gross Domestic Product. However, in the first quarter of 2022, real estate experienced a decline in performance to the country's real GDP growth.

According to the Ghana Statistical Service (GSS), real estate services, for the first time, experienced a negative performance of -2.6 percent growth compared to the 7.0 percent growth recorded in the fourth quarter of 2021.

Though the real Gross Domestic Product (GDP) in volume terms was estimated to have increased by 3.3 percent in quarter one (January to March) of 2022 compared to the same period in 2021.

Several reports indicate that Ghana has become an expensive place to live in 2022 because of the rate at which prices of goods and services are increasing in the country. This makes houses in Ghana so expensive to own.

As a result of the country being classified as an expensive place to live, GSS reports that hotels and restaurants transactions of the Ghana real estate market business declined from 2.8 percent in the 4th quarter of 2021 to 2.5 percent in the 1st quarter of 2022. 

Meanwhile, the construction sub-sector in the industry sector experienced an upward movement from the 0.5 percent growth recorded in the 1st quarter of 2021 compared to the 0.6 percent growth recorded in the 1st quarter of 2022.

The founder of Denya Developers in Ghana, Scot Murray, speaking to Marcopolis said Ghana is a great place to live because it has a special combination of excellent weather, a relaxed and upbeat culture, a safe and fun place to live, and a strong track record of political stability. 

When quizzed why houses in Ghana are so expensive, he said it’s quality materials, which are expensive in Ghana compared to other countries. Since Ghana is not at the stage where high-end materials are produced locally, it’s all down to importing.

''We get many of our materials from Germany. The quality is superb and will last for a very long time, but on top of the unit costs, we have to calculate additional costs for shipping, import duties and VAT. It gets expensive quite quickly.'' Scot Murray said

He added that as a developer, you have the choice. ''Do you adhere to high standards that buyers might not appreciate or do you cut costs to ensure that a project will be sufficiently profitable? It is fairly easy to hide low-quality buildings.''

Meanwhile, some real estate professionals believe that the Accra real estate market will soon crash because of the high cost of housing units being developed in the nation's capital city. 

In view of this, they believe the prices of homes in certain neighborhoods in Accra does not reflect the local economy. What the average Ghanaian earns daily is in no way near the prices of homes developed for sale in the Ghana real estate market.

Can the prices of homes in Ghana actually lead to the crash of the real estate market? This is another topic for another article.