The Ghanaian Real Estate Market Watch: Trends and Predictions For 2024

For 2024, the Ghanaian real estate market is poised for exciting growth that caters to the evolving needs and expectations of the housing market. The residential market in Ghana is by far the most rapidly evolving and fastest-growing sector in the country’s economy. However, the high cost of borrowing and a lack of affordable houses on the market have hampered home buyers throughout 2023.

With the decreasing local currency and the increasing housing deficit, prominent real estate developers have made slight adjustments to pricing, leading to expectations of future house price predictions on an upward trajectory. The housing market in Ghana has bloomed over the past two quarters of 2023 and has become a significant contributor to the economy. 

2024 Outlook for Capital Value of Real Estate in Ghana

Despite the economic difficulties in Ghana, real estate grew by 1.2 percent in the 2nd quarter of 2023 from 1.0 percent in the 1st quarter of 2023. This indicates a rejuvenation of the capital value appreciation of real estate transactions in Ghana. According to the Ghana Statistical Service, the year-on-year growth rates in the 2nd quarter of 2023 saw real estate growth of 4.2% compared to the -5.7% recorded at the same time last year.

The outlook for the capital value of real estate in 2024 is mixed. The real estate market in Ghana is expected to continue to rise but at a slower pace than in recent years. Several factors, including rising interest rates, economic uncertainty, and increased supply, could weigh on prices. 

The real estate market in Ghana comprises residential and commercial real estate. The residential real estate market is the largest of all and covers real estate transactions and leases. Statista predicts that the value of the real estate market in Ghana is projected to reach US$458.52 billion in 2024, with residential real estate dominating the market with a projected market volume of US$389.10 billion in 2024.

Source: Statista Market Insights

This estimate from Statista excludes real estate agencies, construction companies, accommodation services such as Airbnb, commercial real estate leases and transactions, publicly owned buildings used by the local government, and buildings used for public health care services.

Will Ghanaian Home Prices Rise or Drop in 2024?

The Bank of Ghana's Monetary Policy Committee is expected to continue to raise interest rates in 2024 amid the country's desire to build the economy and reduce inflation. This will make borrowing money to buy real estate more expensive, dampen demand, and put downward pressure on prices.

Over the past few years, there has been a shift in the demographics of housing preferences. The current generation is now the largest in the workforce, and they have different housing preferences than previous generations. There have been more rent requests than home ownership requests in Greater Accra. This shift in demographics is putting downward pressure on home prices in some areas.

It is expected that the market will have continued growth in house and unit prices into 2024. Still, the caveat here is to be aware of an intricate dance of economic forces influencing property prices in Ghana. An upward price pressure could come from continued population growth and undersupply, and a high lending rate by the Bank of Ghana facing buyers could weaken demand in 2024.

Interest Rate Cuts Could Spark Home Demand in Ghana

Going into 2024, the Bank of Ghana expects modest GDP growth, the continuation of a tight labour market, and a gradual slowdown in inflation, with many economists predicting lending rate cuts to begin in late 2024. The Bank of Ghana believes the upward review of the monetary policy rate in 2023 was to place the economy firmly on the path of stability and reinforce the pace of disinflation.

The interest rate cut is going to be one of those things that’ll probably help change homebuyer demand in Ghana. Once interest rates are cut, it’ll feed into improved homebuyer demand, and once the demand for homebuying starts to rise, there’ll likely be increased housing activity, which is expected to happen in late 2024.

The Monetary Policy Rate at the end of Quarter Three of 2023 was 30.00 percent, reflecting a cumulative 800-basis-point increase compared with the MPR at the end of Quarter Three of 2022.

Affordability is Still Key For Home Hunters in Ghana 

Despite rising home prices, affordability remains a key factor for home seekers in Ghana. The Government of Ghana recognizes the pressing need to address the housing requirements of the growing working population in Accra, and this commitment is expected to drive significant efforts from developers to create budget-friendly housing options in the coming years. 

The Government of Ghana reports that the National Rental Assistance Scheme, which was introduced in February 2023, has disbursed GH¢13,785,597.00 to cover the payment of rent advances for 1,105 individuals in the Greater Accra, Ashanti, Northern, Eastern, Bono East, and Western Regions. The recovery rate has been 100 percent, with beneficiaries keeping to the agreed monthly repayment schedule. In 2024, the scheme promises to expand coverage from the current six to ten regions. 

The focus on affordable housing remains unwavering on the government agenda, and real estate projects geared toward affordable housing will flourish, providing the needed relief to aspiring homeowners in Ghana. Leveraging various government schemes and incentives, developers will forge ahead, ensuring that the dream of homeownership becomes a reality for a wider segment of the Ghanaian population. 

The affordability issue is a major concern for homebuyers in Ghana. However, the market remains strong, and there are signs that the government and developers are taking steps to address the issue.

Conclusion 

Ghanaian property prices are expected to witness robust and positive growth in 2024. It will largely depend on the country’s efforts and progress in its fight against inflation, a stable exchange rate, and how that impacts the trajectory of interest rates and, therefore, the cost of borrowing.