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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 60.8, which is a solid number.
Ghana offers a stable business environment today due to its consistent democratic governance since 1992, which has fostered political stability and investor confidence. Additionally, the country's strategic economic reforms, such as the implementation of the Ghana Investment Promotion Centre Act, have streamlined processes for foreign investments and enhanced the ease of doing business.
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 2024, grow by 2.8%, which indicates the country is heaidng in the right direction. Regarding 2025, we're talking 4.4%.
Besides that, the economy will keep growing since Ghana's economy is expected to increase by 19.3% during the next 5 years, resulting in an average GDP growth rate of 3.9%.
The expected sustainable growth rate in Ghana indicates a stable and growing economy, which can lead to increased demand for real estate as more people and businesses seek properties. This growth can drive property values up, offering potential investors the opportunity for good returns on their real estate investments.
Nonetheless, there are other indicators to watch.
Ghana's population is growing and 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. Furthermore, the Ghanaian population is growing (+12% in 5 years).
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 2025.
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 expected to be minimal
Neutral
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 1.0% over the next 5 years, with an average annual increase of 0.2%.
This data infers that Ghana will likely experience almost no inflation. If you buy a property now, you may experience lower appreciation potential and reduced returns on investment.
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 19-23% over the past five years.
As a foreign investor, purchasing property in Ghana while the currency is low could be advantageous, as it allows you to acquire assets at a potentially lower cost when converted to your home currency. However, it's important to consider the risks associated with currency fluctuations, as any future appreciation of the Ghanaian cedi could impact the value of your investment when repatriated. Additionally, evaluating the local real estate market conditions, economic stability, and potential for growth is crucial to ensure a sound investment decision.
Is it a good time to buy real estate in Ghana then?
Now it's time to draw our conclusions.
2025 is shaping up to be a fantastic time to invest in property in Ghana, and there are several compelling reasons for this. First off, Ghana currently boasts a stable business environment, which is a crucial factor for any real estate investment. A stable environment means that the risks associated with property investments are minimized, making it a safer bet for investors. This stability is attractive not only to local investors but also to international ones who are looking for reliable markets to invest in.
Moreover, Ghana's economy is on a promising growth trajectory. With an expected increase of 19.3% over the next five years, the average GDP growth rate is projected to be around 3.9%. This kind of economic growth is a strong indicator of a healthy and expanding economy. As the economy grows, so does the demand for real estate, as more people and businesses will be looking for properties. This increased demand can lead to higher property values, offering investors the potential for significant returns on their investments.
Another factor to consider is Ghana's growing and increasingly affluent population. As more people move into the middle class, the demand for quality housing and commercial spaces is likely to rise. This demographic shift not only increases the demand for real estate but also supports the potential for rental income. According to Numbeo, rental properties in Ghana currently offer impressive gross rental yields ranging from 19.3% to 22.0%, making it an attractive market for those looking to earn rental income.
Lastly, the inflation outlook in Ghana is expected to be minimal, which is good news for property investors. Low inflation helps maintain the purchasing power of money, meaning that the real value of rental income and property prices is less likely to be eroded over time. This stability in inflation further enhances the attractiveness of investing in Ghana's real estate market, as it provides a more predictable and secure environment for investors. All these factors combined make 2025 an opportune time to consider buying property 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.
-Will real estate prices go up in Ghana?
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.