Why more investment is not making housing affordable in Ghana | Housing News
Housing Crisis in Ghana: A Call for Investment and Affordability
Accra, Ghana — Ghana faces a significant housing crisis, with a reported shortfall of over 1.8 million units. However, attracting investment to build these homes is only part of the challenge; the more pressing issue lies in the affordability of the housing that is available on the market.
This pressing concern was central to discussions at the Africa Real Estate Conference & Expo (ARCE), held in Accra this week. The event brought together developers, policymakers, investors, and technology entrepreneurs who shared strategies aimed at expanding housing construction, enhancing housing finance, and utilizing innovative technologies. Yet, a critical question emerged: how can Ghana create viable housing solutions for developers without making them unaffordable for those in need?
Currently, about 56.7 percent of Ghana’s population resides in urban areas, but only approximately 5 percent of Ghanaians can acquire housing without government assistance. This mismatch between housing demand and financial capability continues to constrain the market, affecting both private developers and traditional mortgage lenders.
Government Initiatives to Facilitate Housing Finance
The Ghanaian government has implemented various measures to reduce borrowing costs and stimulate construction. Notably, the National Homeownership Fund has lowered mortgage rates from 13.5 percent to 8.4 percent. Additionally, a revolving fund of 3 billion Ghanaian cedis (approximately $256 million) has been established to assist public sector workers with mortgage repayment periods of 15 to 20 years.
Authorities are also working to revive the Saglemi Housing Project, which aims to deliver its first 700 units by March 2027, and they have announced the Green City Project, covering 200 acres at Dedesua.
Earlier this month, President John Dramani Mahama unveiled an allocation of 1 billion Ghanaian cedis (about $85 million) for the National Housing Fund in the 2027 budget. He acknowledged the challenges faced by informal sector workers in accessing mortgages, due to the absence of payslips and traditional banking records.
“A system that cannot recognize these livelihoods excludes a substantial part of our nation from the opportunity to own a home,” Mahama stated, encouraging banks to develop alternative assessment methods for borrowers.
Housing Minister Ahmed Ibrahim, who represented the president at ARCE, reinforced the need for increased private sector involvement in affordable housing and mortgage finance. While these initiatives target significant barriers, their effectiveness will depend on whether financing reaches households in need and whether developers can offer homes at sustainable prices.
Understanding the Underlying Costs
Approximately 90 percent of housing in Ghana is constructed through personal savings and incremental construction, with mortgage penetration at a mere 0.3 percent of the country’s GDP. This indicates that most households rely on self-financing rather than conventional mortgages.
Bako Ambianda, CEO of Backbone Capital Ventures and a keynote speaker at ARCE, emphasized that the true issue at hand is not a lack of demand but rather the challenges of making housing projects financially viable.
“Africa’s housing challenge is not a lack of demand,” he stated. “It is a mismatch between the cost of delivering homes, the financing available to build them, and the purchasing power of households.”
Samuel Amegayibor, executive director of the Ghana Real Estate Developers Association (GREDA), identified access to finance and secure land as two primary obstacles for developers. Despite a decrease in borrowing costs from around 30 percent to between 9 and 15 percent, financing remains costly. Additionally, complexities surrounding land ownership and inadequate infrastructure contribute to development uncertainty.
The high costs of land, infrastructure, and construction materials ultimately affect housing prices. Amegayibor noted that approximately 70 percent of building inputs are imported, making developers vulnerable to fluctuating import costs and taxes.
“Increasing local production could help reduce reliance on imports while creating investment opportunities across the construction supply chain,” he explained.
The Rental Market and Its Affordability Challenges
The financial barriers extend beyond homeownership; tenants are also affected by affordability issues. Although Ghana’s Rent Act of 1963 limits upfront rent to six months, landlords frequently require one to two years in advance. This practice forces tenants to secure large sums before being able to rent.
To address these challenges, enforcement measures were reportedly introduced in April 2026, imposing penalties for non-compliant landlords. The FirstKey app aims to help identify such landlords, while the proposed Easy Rent program would enable the National Housing Fund to pay upfront rent directly to landlords, allowing for monthly repayments from workers.
However, these measures do not resolve the fundamental housing shortage affecting low- and middle-income earners, who make up about 70 percent of the population. Current housing developments often cater to higher-income demographics, highlighting the need for alignment between housing supply and affordability.
The Role of Technology in Housing Affordability
At ARCE, 30 PropTech startups showcased innovations designed to enhance building performance and reduce operational costs. While these technologies could potentially offer savings, their impact on overall affordability will depend on a range of factors, including implementation costs and accessibility for end-users.
Isaac Ayitey Chris-Quaye, co-founder of NeuraHomes, shared insights on how smart-home systems can enable residents to monitor energy usage and enhance security. His company’s approach allows homeowners to implement features gradually, avoiding the burden of upfront costs.
William Atitso Amankwah, founder of AWA Roofing Sheets, introduced a Cool Roof coating that reflects sunlight, aiming to reduce indoor temperatures and cooling costs.
Despite the promising nature of such innovations, experts caution that technology alone cannot resolve deep-rooted issues, including insecure land titles, inadequate infrastructure, or high development costs.
Rethinking Housing Finance and Land Policy
For Ambianda, addressing the housing crisis requires redefining how households qualify for financial support. Conventional mortgages often overlook informal-sector workers whose incomes fluctuate. He suggested that alternative assessment methods, incorporating transaction histories and savings patterns, could broaden access to the formal financial system.
Land policy reform is also crucial. GREDA has proposed establishing a National Housing Authority led by professionals to ensure consistent policy in housing delivery, insulated from political influences.
Ultimately, Ghana faces the challenge of connecting investments with secure land, reliable infrastructure, lower construction costs, and financing that aligns with household incomes. A multifaceted approach involving government initiatives, private capital, and technological advancements is essential to create housing solutions that are genuinely attainable for all Ghanaians.
