Private Opportunities in Ghana Real Estate

Why invest in real Estate in Ghana? Ghana’s growing population, buoyant economy and favourable investment environment make its real estate market increasingly dynamic. In spite of complicated issues over local lending and land ownership, demand for housing spans the entire spectrum of the population, from wealthy Ghanaians and a growing number of expatriates through a rising middle class to lower-income groups.

The roots of the current housing market boom began in the early 1990s, when the financial sector was liberalised, and the sector’s expansion has since gone hand-in-hand with that of the economy as a whole, generally growing steadily although also seeing occasional setbacks and slowdowns during periods of economic turbulence.

It has not, however, gained a great deal of international attention. But now, with Ghana one of the fastest-growing countries in the world – the IMF expects GDP to rise by 7.3% this year, following 13.5% in 2011 – investors and authorities alike are realising the potential – and importance – of the nation’s real estate sector.

Last month, the government sealed an agreement with the Ghana Real Estate Developers Association (GREDA) reaffirming a commitment to encourage the growth of private real estate firms to meet the country’s housing needs, particularly at the lower-end of the market where there has been significant discussion as of late but comparatively limited activity.

Ghana has an encouraging framework for real estate investment, with freely-transferrable capital and profits, but projects have generally concentrated towards the middle and the top of the market, where margins are bigger and demand has remained relatively stable. As a result, a shortage of affordable housing is one of the biggest challenges facing the country, which is otherwise a relatively prosperous and stable part of West Africa. While the gap between supply and demand is most acute at the bottom of the income scale, there is also rising demand in the middle- and high-income segments, in which local and international developers are showing increasing interest.

Speaking at a workshop on housing delivery, Nii Nortey Dua, the deputy minister for water resources, works and housing, reiterated the government’s commitment to reform to encourage private sector property development. Overall, Ghana is estimated to have a shortfall of around 1m units.

“We are willing to partner [with] the private sector to remove all the obstacles facing them so as to improve the socio-economic well-being of the people,” Dua said, adding that investment and public-private collaboration could help the country meet the objectives of the Better Ghana Agenda, the government’s national development programme.

The country did just that with South Korean conglomerate STX Corporation on their plan to build 200,000 housing units worth some $10bn, but after negotiations failed in January, President John Atta Mills announced that the project had fallen through and that he was looking for “alternatives”. The government also recently decided to repossess all assets advanced to STX, including 15 land sites across the country.

Of course, in spite of the renewed push on affordable housing, the rising level of per capita GDP and the growing number of white collar expatriates still draws a number of developers to the higher end of the market, and gated communities are proliferating in the wealthier neighbourhoods of the capital, Accra.

“Initially, middle and high-end homes were patronised largely by non-resident Ghanaians and foreigners, but gradually the middle class in Ghana is growing and local Ghanaians are patronising such homes,” Samuel Ewool, the executive director of Buena Vista Homes, a Ghanaian builder-developer, told OBG. “There has also been a remarkable increase in the number of foreigners from the West African region buying property here as investment because of the political stability in Ghana.”

Kofi Ampong, the CEO of real estate firm Broll Ghana, agreed. “On the residential side of the market, there has been a huge growth in terms of short-term lease of apartments for expatriates,” he said. “Since there are so many companies that are setting up base in Ghana to serve West Africa, there is a lot of demand for housing for people that come and stay for a couple of months.”

However, the sector is still constrained by some fundamental complications that limit the capacity for more robust expansion. One of the most significant drags on residential real estate growth has been the difficulty of obtaining a mortgage. High interest rates – over 20% in many cases – and relatively low disposable incomes make housing purchases difficult even for many middle-income families. Many resort to a traditional model of home building, whereby construction of a home is done in stages as cash becomes available.

Nonetheless, Ampong notes a growing willingness among banks and other lenders to provide home loans, whether through traditional mortgage structures or other forms of periodical payment. This, in turn, drives demand for middle-income housing, which developers are increasingly able to meet.

In fact, the secondary and rental markets have helped further spur increased ownership. Rents for the better properties in Accra have soared in recent years, incentivising home ownership over tenancy, as well as making property an attractive investment for those able to build up a portfolio. These dynamics are also driving an expansion of real estate development outside the city; any trip from the capital into the surrounding area will go past a number of proposed projects. While areas served by existing infrastructure, such as roads and electricity, command high prices, those areas where full-scale development has not yet reached are still relatively affordable.

From a standing start in the early 1990s, Ghana’s real estate industry has grown steadily. The impetus of strong economic growth, unmet demand and the country’s emergence into the global investment spotlight, have led to the momentum that is currently building in the sector. Those projects that are well targeted and reasonably priced can capitalise on one of the region’s most stable and interesting markets.

Source: Oxford Business Group

Alert: Ghana Building Regulations You Should Know

You are perhaps aware of the Melcom department store that collapsed in Accra, Ghana. It was reported that nine people died in the collapse. Approximately seventy people were rescued from the debris and rescue workers (as of the writing of this article) continue to search for survivors. Experts have yet to determine the cause of the department store collapse.

What is it that causes buildings in Ghana to collapse? Why has there been a rampant rash of building and project demolitions in Ghana in recent months? What building regulations have been adopted in Ghana to prevent future demolitions and collapses? The answers to these questions can be found in the following list. However, if a you truly wish to understand building regulations in Ghana, you should work with certified architects and engineers in Ghana who understand the system and can design a house plan that qualifies for a permit and meets all requirements.

Building Regulations in Ghana

The goal of building regulators in Ghana is to establish a common set of baseline requirements for all structures erected in Ghana, enforce the regulations, and educate building contractors on building the safest buildings possible. The building regulators of Ghana focus on the following:

• A builder must first apply for the proper development permits with the regulating body.
• A builder must then acquire and report on a suitable plot for development that meets the requirements of the regulations.
• Excavation of the plot must be done with accommodation for water tables, sub-soil drainage, and the surrounding environment.
• The building’s design must be reviewed to ensure structural stability.
• The builder must include structural fire precautions in the design.
• Proper accommodations must be made for accessing the structure.
• The regulations enforce correct ventilation and air flow design and set up including the proper expulsion of gasses produced by heat producing appliances.
• Other regulations deal with the proper intake, usage, and disposal of water.

These are only a few of the building regulation highlights in Ghana. For a more in depth understanding of Ghana building regulations, it is recommended that you work with certified Ghanaian engineers and architects who understand building regulations and can help you build a structure that meets all of the building regulations and requirements.

Contact The Ghana Homes Group today for a FREE building planning consultation.

The Most Common Building Materials for Building Homes in Ghana

Homes that are built in Ghana are constructed with certain materials that are divided into two different categories: conventional and unconventional. In the formal construction sector, more conventional materials will be used, such as concrete, slate and asbestos. Unconventional materials may consist of substances such as mud, mud bricks, palm leaves, bamboo and wood and may be used in areas that are more rural. Unconventional materials are used primarily because more conventional materials are either too expensive or are not easy to come by in certain areas.

In the bigger cities of Ghana and the areas that are more modernized and have larger populations, building materials are much more accessible. Materials used on these homes are similar to those used in places such as Arizona and Florida for construction of homes and buildings.

Here are the most Common building materials in Ghana for Conventional Construction

• Walls
• Bricks
• Masonry Blocks
• Concrete Blocks
• Gypsum Boards (plasterboard or drywall)
• Wood
• Floor
• Concrete Slab
• Roof
• Concrete Tiles
• Brick Tiles
• Shingles
• Long Span Aluminum Roofing Sheets
• Onduline Roofing Sheets
• Windows
• Aluminum Framed Glass Windows
• Aluminum-Clad Wood Framed Glass Windows
• Wood Framed Glass Windows
• Wood Paneled Windows
• UPVC Framed Glass Windows
• Wood Jalousie
• Doors
• Wood Paneled
• Aluminum Framed Glass Doors
• UPVC Framed Glass Doors
• Steel Doors
• Floor Finish
• Porcelain Tiles
• Ceramic Tiles
• Marble Tiles, Linoleum
• Terrazzo
• Cement/Sand Screed
• Carpet
• Ceiling
• Wood T&G
• Plastic T&G
• Acoustic Ceiling Tiles
• Plasterboard Ceilings

Outside Walls

When building the outside of a home, there is little distinction between conventional and unconventional. Most construction involves the use of bricks and earth as a traditional building tool. Cement blocks and concrete are also used in areas where they are available for the outside of a home. Although wood is exported from Ghana, it is not used as widely or as popularly as the previously listed materials.

Roofing Materials

Conventional materials used in Ghana for roofing include corrugated metal sheets and slate or asbestos roofing. Unconventional materials that are used in more rural areas include thatch or palm leaves or raffia. These materials are the second most common used in the roofing of homes in Ghana, second only to metal sheets.

Floor Materials

The most common materials used for construction in Ghana in the form of floors are cement or concrete. While earth or mud brick flooring is still often used, it is quickly being replaced by the convenience, stability and durability of cement flooring in the areas where it is available. In situations where cost is not an issue, homebuilders may also use terrazzo, vinyl tiles and ceramic tiles.
The materials used for construction on a home in Ghana are often chosen based on the location of the home being built and cost.

5 Simple Steps To Getting A Mortgage In Ghana

1 - Determine What Kind of Mortgage You Need

As a prospective borrower in Ghana, you have a few options that you must consider to decide which type of loan is the best for you and your situation. The primary loan options you have are:

• First-time home buyer loan
• Investment loan for property renting
• Existing home-owner loan, using your home as collateral

2 - Process Overview - Taking Your First Steps

The first step to accessing a mortgage in Ghana is to submit a completed application form. Depending on the bank you can do this on-line, or download, print, then scan and e-mail a completed form. Alternately, you may prefer to submit an application in person in a bank office. You will also need to decide whether you want to file an application by yourself, or jointly with two or more people with the proper relationships.

3 - Required Documents

When applying for a mortgage in Ghana, most organizations require the following documentation from each person applying during the lending process:

• Two proof-of-address forms
• Proof of income
• Two forms of personal identification
• Recent banking statements
• Credit reports
• Offer letter
• Letter of intent
• Facility letter
• Professional appraisal
• -Final mortgage agreement, signed and witnessed (may be done through Power of Attorney)

4 - Mortgage Terms and Conditions

Before signing anything, be sure that you have read through the entire mortgage agreement and are familiar with all the outlined terms and conditions. Items of particular importance may include:

• The loan amount
• Required down payment amount
• The loan term (this is typically about 15 -20 years for a mortgage in Ghana)
• The installment amountThe repayment schedule
• The payment dates
• What constitutes a shortfall
• Insurance requirements
• What constitutes a default
• Transaction fees

You can expect to pay about 20% to 25% down payment for most home loans in Ghana.

5 - Finding a Good Bank and Interest Rate

Lending rates in Ghana are extremely high at the moment, even when doing business with the best banking institutions. Current rates are ranging, on average, from about 13.5%-30% depending your credit history. In a recent study, the top rated and recommended baking institutions - to get the most for your money - were the following, in order:

1. Ecobank Ghana
2. SG-SSB
3. CAL Bank
4. HFC Bank Ghana
5. Ecobank Transnational

Adhering to this information should greatly ease the burden of obtaining a good mortgage in Ghana.

7 Little-Known Factors That Could Affect Your Home Construction Project in Ghana

If you are considering a home construction project in Ghana, you are probably very excited about the design of the building and are anticipating the time when you will be able to move in. However, it is important to realize that there are a number of factors that can cause problems with your project. Following you will find 7 factors that could impact your home construction project in Ghana.

1. Wrong permits - if you get the wrong permits for your project, you could wind up paying extra fees or even being required to stop construction. It is very important that you do your due diligence and verify that you have all the right permits.
2. Land ownership - clear title to the land where you will be building is not always as easy to come by as it seems. It is important to be aware of scams that sell land in Ghana and utilize the services of a lawyer experienced in these matters to verify your land ownership before you begin the project.
3. Land legal issues - there may be other legal issues that affect your land, and having your lawyer go over everything with a fine-tooth comb is the best way to avoid these types of problems.
4. Constant material cost increases - when you plan a project, you must be aware that material costs may increase over the course of the building project.  If you are aware of this, you can build this into your plans for construction.
5. Labor cost - this cost will vary depending on the crews you use, but don't sacrifice quality of the work for cheap labor.
6. Time overruns - Such things as weather damage, utility issues, and so forth can impact the length of time it takes to complete a construction, and this can increase the cost.
7. Cash flow problems - it is important to work with a contractor that has adequate planning for cash flow so that you don't run into problems.

As you can see, these are some of the things that can negatively impact your construction project, but with careful planning, many of them can also be avoided.

What's your construction story? Share below.

7 Ways to Protect Your Investment from Cheap Ghanaian Building Contractors

The possibility of owning a newly constructed home is a dream that can be realized for more and more individuals today. It’s an investment that shouldn’t be taken lightly, though. Hiring a licensed professional contractor might cost a little more up front, but in the long run it can mean the difference between a home that is functional, lovely and lasting versus one that is poorly planned and shoddily built. Listed below are seven ways you can protect your investment from cheap Ghanaian contractors who might otherwise gamble with your investment and your money.

1. Get recommendations

Colleagues, friends, and family members can offer up honest opinions when it comes to finding a contractor.  They can be one of your best resources in finding someone who might offer quality services at competitive prices. Friends and family members have nothing to lose or to gain by discouraging or recommending a contractor. 

2 - Interview first

When investing in something as important and personal as one’s own dream home it’s important to find the right people to do the job. One way to determine if a construction company will suit you is to interview them. Don’t hold back when it comes time to ask questions. 

3 - Get more than one bid

Oftentimes a construction company will offer free bids, and it’s pretty standard for buyers to obtain three. It would be incorrect to assume the lowest bid is the most cost effective, and the highest bid is definitely out of consideration. They are all worth considering.

4 - Have a written contract in place

Before beginning a project it’s important to have a written contract in place so each party knows what’s expected beforehand.

5 - Look at past projects

To get a good idea of how skilled the contractor’s craftsmanship is: peruse past projects.

6 - Inspect the materials

When it comes to quality, not all materials are the same. It’s important for you and the contractor you hire to select those that would be durable as well as affordable.

7 - The crew

Ask questions about the workers who might be involved in the building process. Determine what their credentials are and how they might impact the quality of your home.

While it may take time to interview and obtain bids before hiring a quality Ghanaian contractor, it can save a lot of money and heartache in the long run.

Trust the Ghana Homes Group to equip you with your dream home House Plan. Begin by browsing their House Plans here.

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7 Basic Steps to Successful Buying Land in Ghana

Whether this is your first time making a land purchase, or if you own properties in different locations throughout the world, buying land in Ghana can be a very attractive option and challenging. While Ghana does not maintain any restrictions against foreigners purchasing land, there are several principals that need to be understood so that you can successfully buy land in Ghana. As a brief overview, these include:

1. Verify land ownership
2. Check with the Land Commission to find out who truly owns the land
3. Check seller’s reputation
4. Find out whether the land is a leasehold or freehold
5. Ask for a transfer of ownership process
6. Check the cost to transfer and register the land at the court
7. Verify lawyer fees if any

In order to help you understand the process a little better, there are also certain concepts that you need to understand.

Land Ownership

The constitution of Ghana was approved in April of 1992. According to this constitution, all public land was vested in the President on behalf of the people. Prior to this time, Customary Land had been granted to individuals and families. Customary Land is now considered to be private land. If you want to purchase private land, it is necessary to talk to the individual who owns it; otherwise, all land is purchased from the government.

Ghana Land Freehold vs Leasehold

There are distinct differences between leasehold and freehold land. When someone owns freehold land, they have exclusive rights to the land as well as the building or home on that land. Contrastingly, purchasing a leasehold property means that you purchase the rights to the building or home on a given property for a certain amount of time – several decades, usually – but the actual land does not belong to you.
These are a few of the most important things to understand when you are in the process of purchasing property in Ghana. By following these seven steps, you will find that the purchasing process goes much more smoothly.

What's your Ghana land buying experience? Leave a comment below.