All sources have been thoroughly verified for credibility. Furthermore, an industry specialist has reviewed and approved the final article.
Everything you need to know is included in our Ghana Property Pack
Are you considering buying real estate in the land of Gold Coast? Are you questioning whether now is the best time to proceed?
People have differing viewpoints when it comes to market timing. Your Ghanaian colleague may suggest that it's currently a good time to buy property, but your friend residing in Accra might suggest waiting for a couple more months.
At TheAfricanvestor, when we create articles or update our pack of documents related to the real estate market in Ghana, we prioritize facts and data over opinions and rumors.
We have gone through official reports and government website statistics in great detail. As a result, we have created a reliable database filled with valuable information. Here's what we found, which can help you decide whether it's the right time to buy real estate in Ghana.
Dive in and enjoy!
How is the property market in Ghana now?
Ghana offers, today, a stable business environment
Neutral
If you want to invest in properties, prioritize stability as it reduces risks and provides a secure foundation. It is an information you need as a foreigner looking to buy real estate in Ghana.
Good news for you, Ghana is a stable country. The last Fragile State Index reported for this country is 63, which is a solid number.
Ghana has a strong commitment to democracy and rule of law, which has created a stable political climate. Additionally, the government has implemented economic policies that have helped to stabilize the currency and reduce inflation, creating a favorable business climate.
Moving forward, let's analyze the economic forecast.
Ghana is poised for strong growth
Positive
Before diving into real estate investment, the initial step is to consider the country's economic well-being.
In accordance with IMF projections, Ghana will, in 2023, grow by 1.6%, which is positive. Concerning 2024, we're talking 2.9%.
The pace will even accelerate since Ghana's economy is expected to increase by 16.2% during the next 5 years, resulting in an average GDP growth rate of 3.2%.
The expected sustainable growth rate in Ghana is a good thing for someone who wants to invest in real estate because it indicates that the economy is strong and growing, which in turn will lead to increased demand for housing and higher property values.
Nonetheless, there are other indicators to watch.
Ghana's population is getting richer
Positive
When buying real estate, it's important to consider population growth and GDP per capita, because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Ghana, the average GDP per capita has changed by 7.4% over the last 5 years. It's a solid number.
This means that, if you purchase a cozy bungalow in Accra and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, the demand for rentals is expected to increase in Ghanaian cities such as Accra, Kumasi, or Takoradi in 2024.
You'll get the best rental yields in Ghana
Positive
If you want to know if a property investment is worth it, examine the expected rental yields.
Rental yield is the return on investment you can expect from renting out a property, expressed as a percentage.
According to Numbeo, rental properties in Ghana offer gross rental yields ranging from 19.3% and 22.0%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Ghana.
These values are exceptional.
Everything you need to know is included in our Ghana Property Pack
In Ghana, inflation is anticipated to be exploding
Positive
In two words, inflation is when purchasing power diminishes.
It's when your regular plate of banku and tilapia costs 25 Ghanaian cedis instead of 20 Ghanaian cedis a couple of years ago.
If you're considering investing in a property, high inflation can offer you several advantages:
- Property values have a tendency to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, effectively preserving the value of the investment.
- Diversifying your portfolio with real estate provides stability during periods of inflation.
- Tax advantages, such as depreciation deductions, can help offset the impact of inflation.
As per the IMF's forecasts, the inflation rate in Ghana will increase by 74.7% over the next 5 years, with an average annual increase of 14.9%.
This data infers that Ghana is likely to witness substantial inflation. In light of this, it may be a strategic move to invest in property now.
Ghana's currency is presently low
Positive
Attention, foreign investors! This aspect is tailored just for you.
The Ghanaian Cedi (GHS) is devalued: the currency is currently 22-26% over the past five years.
As a foreign investor, buying a property in Ghana could be a great opportunity due to the low currency. The low currency will make the property more affordable and any rental income received will be worth more in the investor's home currency. However, it is important to consider the long-term currency stability of the country before investing.
Is it a good time to buy real estate in Ghana then?
Now it's time to draw our conclusions.
Undoubtedly, 2024 presents a prime opportunity for property investment in Ghana, given a range of compelling factors. The country's strong growth prospects make it a standout choice for investors seeking potential returns. Ghana's commitment to economic development and diversification creates an environment conducive to increasing property values and rental income.
The improving wealth of Ghana's population bolsters the attractiveness of property investment. Rising personal incomes can drive demand for housing and real estate, creating potential for both rental income and capital appreciation. As people become wealthier, their purchasing power can positively impact the property market.
Ghana boasts the best rental yields, a key factor for investors seeking income streams. A combination of factors, including economic growth, urbanization, and tourism potential, can contribute to robust demand for rental properties, ensuring attractive returns on investment.
Anticipated exploding inflation, while a concern in many cases, could potentially play into the hands of property investors in Ghana. Inflation can drive up property values, benefiting those who own real estate as an inflation hedge. This dynamic, along with other positive signals, makes 2024 an opportune time for entering the Ghanaian property market.
Although Ghana offers a stable business environment, this neutrality adds to the overall positive investment climate. The country's stability provides a solid foundation for long-term property investments, minimizing risks and supporting the potential for sustained growth.
In conclusion, the combination of strong growth prospects, improving population wealth, high rental yields, anticipated inflation, favorable currency rates, and a stable business environment make 2024 a definitive and propitious year to consider property investment in Ghana.
We sincerely hope this article has provided you with beneficial information!. If you need to know more, you can check our our pack of documents related to the real estate market in Ghana.
-Is it a good time to buy a property in Ivory Coast?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Buying real estate in Ghana can be risky
An increasing number of foreign investors are showing interest in Ghana. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
