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17Apr’25
EXPLORING THE IMPACT OF STRATEGIC SOURCING OF LOCAL BUILDING MATERIALS: A NECESSARY CONDITION TO REDUCING HOUSING AND CONSTRUCTION COST
EXPLORING THE IMPACT OF STRATEGIC SOURCING OF LOCAL BUILDING MATERIALS: A NECESSARY CONDITION TO REDUCING HOUSING AND CONSTRUCTION COST Published: April 2025 Author: Daniel Kontie Category: Real Estate Will the affordable housing dream ever going to materialize in Ghana where several attempts to build affordable housing units for the citizenry have failed for several decades?. The evidence is as glaring as we keep recording huge housing and infrastructure deficits at every population census since independence. The Ghana Population and Housing Census 2021 reported a housing deficit of about 1.8 million. The ripple-effect is what we see today, the dramatic increase in slum communities, unapproved settlements, and substandard residential structures across major cities in Ghana, particularly Accra. The state tried to change the trajectory and so did the private sector to bridge this ever-widening deficit, but all proved futile. The good news however is that, the Africa Continental Engineering & Construction Network Ltd has developed a model of building residential properties relatively cheaper enough to put shelter over the heads of the average low-income earner in Ghana. One of these models is the use of Compressed Stabilized Earth Blocks (CSEB). The blocks by design are interlocking in nature eliminating the use of mortar joints in the construction process. This saves cost on the labor, sand, cement and water required for mortar works. The walls does not require plastering and painting, also eliminating the cost of labor, sand, cement, paint and water. The blocks are made on project site most often; this also eliminates transportation cost compared to the situation in traditional concrete blocks where blocks have to be transported from factory to site. Even in regular non-storey residential housing, columns may not be needed depending on the situation, expertise and experience of the interlocking building professional. This also eliminates the labor cost, steel reinforcement and in-situ concrete for column works etc and even in the event where it is necessary to use reinforcement, there is an alternative to steel bars, the fiber glass (polymer) bars that cut your reinforcement expenditure by 40%. Apart from the aforementioned cost-saving benefits of the interlocking Compressed Stabilized Earth Blocks, they also have technical properties that make them the ultimate choice by all permutations. First and foremost, the buildings are earthquake resistant by virtue of the interlocking property of the blocks, this interlocking mechanism helps in distributing seismic forces evenly throughout the structure. The other earthquake-resistant properties worth mentioning are its high density, high flexural strength and low void ratio. Last but not least, CSEBs are fire-resistant by virtue of their low thermal conductivity which slows transfer of heat and reduces the risk of fire damage in the event of fire outbreak. Remember the technology is not the conventional clayed-fired bricks that have been in the system all this while. It is a ratio of cement, clay or laterite in some cases, giving us a block with an average compressive strength of 8Mpa. The color of the block can be kept consciously by a selective choice of the clay or laterite or a mixture of the two. The building maintains an environmentally friendly temperature that there will be no need to spend so much on cooling systems. Alternatively, one can clad this structure with natural stone (décor marbles) to give it that luxurious taste and aesthetics. The interior can be plastered depending on the taste and preferences of the individual or better still, joints can be sealed and walls polished with a special varnish cheaper than plastering and painting. Ceiling works can be processed, treated or polish wood which is a local content input and environmentally friendly as well. Roofing can be locally made clay roof tiles common in the market, and the floor can be a terrazzo pavement etc. The reality is that, you end up having a complete house with sound and superior structural integrity, eco-friendly and much cheaper compared to the conventional concrete house. Now is the time for us, as Ghanaians and Africans at large, to embrace these models to build that enviable motherland of Ghana for ourselves and posterity. By this publication, we are therefore calling on all stakeholders in the building, construction and real estate industry, all sovereign African nations, regulatory bodies, civil society organizations, international bodies, non-governmental organizations, etc to rally behind this clarion call by patronizing these innovations and also spread the good news across the length and breadth of Ghana and Africa. We are also appealing to the World Bank, International Finance Corporation (IFC) through the EDGE initiative, ECOWAS, African Union, the African Continental Free Trade Area Secretariat (AfCFTA), the African Development Bank for partnerships and investment in this regard, so that the Africa Continental Engineering & Construction Network and other stakeholders can develop these low-cost residential housing units to put shelter over the heads of the homeless majority of Ghanaians and by extension the African people. On the contrary in concluding, let me be quick to draw the attention of readers to an error in thinking that, using locally sourced building materials will always lead to a reduced construction cost. Achieving low development cost depends to a large extent on the expertise and experience of the developer in question using these locally made building materials and this is where the expertise of the Africa Continental Engineering & Construction Network Ltd comes to bare. Sourcing locally made building materials can sometimes be very expensive compared to using imported products. First, many of these materials are produced manually; this leads to poor finishing, product defects and sometimes substandard. The implication in the long run is high maintenance cost of the buildings. Also, the inability to mechanize and automate production of these materials, we are unable to enjoy economy of scale. This makes production cost high which is transferred to the end user of the product. Apart from this, Ghana lacks robust transportation infrastructure coupled with poor maintenance culture, leading to high transportation cost of goods and services of which local building materials are no
17Apr’25
UNPACKING THRIVING/NEW MARKETS AND STRATEGIES TO INVEST IN THE REAL ESTATE SECTOR IN GHANA
UNPACKING THRIVING/NEW MARKETS AND STRATEGIES TO INVEST IN THE REAL ESTATE SECTOR IN GHANA Published: April 2025 Author: Daniel Kontie Category: Real Estate As Ghana’s real estate sector evolves, developers are increasingly seeking opportunities beyond traditional investment options. Emerging markets present a wealth of opportunities for developers seeking to expand their horizons. These markets are driven by economic growth, infrastructure expansion, industrialization, foreign investment, diaspora influence, consumer demand etc. However, navigating these thriving and emerging market trends require strategic planning and data-driven decision-making. This article explores thriving and emerging opportunities whilst offering effective strategies for developers looking to expand investment in Ghana’s real estate sector. For developers, understanding the unique characteristics and potential of these markets is the first step towards successful expansion The Growth of Thriving and Emerging Markets in Ghana Ghana’s real estate sector remains a key contributor to economic growth. According to Statista (2023) the real estate sector in Ghana contributed about 1.6 billion Ghanaian cedis (Ghs), approximately 121.2 million U.S. dollars, to the country’s Gross Domestic Product (GDP). Besides, Ghana’s real estate market is projected to reach a value of US$533.34 billion by 2025, with residential real estate dominating at US$456.11 billion and a projected annual growth rate (CAGR 2025-2029) of 3.44%. Moreover, urbanization rate continue to rise, with over 58.6% of Ghanaians residing in urban areas according to Worldometer (2024). This development has led to a higher demand for infrastructural developments in major cities such as Accra, Kumasi etc creating a huge demand for infrastructure and investment opportunities for potential investors. Additionally, with Ghana’s housing deficit still at a staggering deficit of 1.8 million units. The demand for affordable housing too remains a crucial driver for expansion, creating an avenue for developers to establish a strong market presence in other emerging sectors. With the right industry information about these thriving and emerging opportunities in the real estate sector, investors can diversify their investment portfolio that will create wealth for both investors and the state at large. Thriving and Emerging Markets in Ghana’s Real Estate Sector It is important to note that the real estate sector have witnessed a significant change in the past few years leading to the thriving of existing and the emergence of new markets. For want of space we shall be treating a few of these in this article. Key among these thriving and emerging markets are these: affordable housing, student accommodation, high and mid-end properties, office spaces, retail spaces, hospitality, warehousing and logistics, manufacturing infrastructure, land banking etc. We shall be examining each in brief in the subsequent paragraphs. Rising Demand for Affordable Housing The demand for affordable housing still remains increasingly high as supply lags significantly behind demand. With exception of the real estate boom in 2021 that witnessed the reduction of the deficit from 2.8 million to 1.8million, nothing much has changed in the affordable housing sector. This gap presents a huge opportunity making it a thriving existing market for investors to tap into. Rising Demand for Student Accommodation For some time now, Ghana is known to be Africa’s Hub for Tertiary Education contributing significantly to the investment opportunities in the student accommodation sector. According to the National Council for Tertiary Education (2016) Ghana has positioned itself as one of the major providers of quality higher education in Sub-Saharan Africa. For the past decade, Ghana has enacted policies, which have indicated to the global community, the strong intention to enhance the competitiveness of our tertiary education system. For this reason, the quota-based admission policy for foreign students was lifted in both private and public institutions. This opened the floodgate to students and faculty of countries within Sub-Saharan Africa including Nigeria, Cameroon, Guinea, Gabon, Liberia, Sierra Leone, Congo Brazzaville, Equatorial Guinea, Togo, Ivory Coast, Zambia, Gambia, Rwanda and some East and southern African Countries. This trend has skyrocketed student’s accommodation demand in the cities making property investment in Ghana exceptionally profitable. Beside this, our national university stock has fifteen (15) public universities, nine (9) professional institutions and one hundred and twenty (120) private universities, with many of these private universities admitting twice a year etc. This has increase the demand for student accommodation making that sector one of the thriving sectors for investment. Rising Demand for Mid and High-end Properties Mid and high-end property demand remains significantly high as a result of the dramatic growth of the Ghanaian middle class coupled with the diaspora taste and preference for these properties. This sector witnessed a dramatic growth after the implementation of the “Year of Return” and the “Beyond the Return” policies of the Nana Addo Danquah, Dr. Bawumia led administration between 2016 and 2024. This has triggered huge investment prospects in this sector at the time and still remains considerably high today. Increasing Demand for Grade-A Offices and Shared Work Spaces With many medium scale businesses in Ghana who do not have the capacity to rent large commercial spaces, there was the need for a market response to find an affordable office solution to these medium scale businesses. This has led to the emergence of Grade-A and Shared Workspaces across various cities in Ghana leading to an improved occupancy rate for high-rise commercial spaces in cities that were left unoccupied for years. This has also presented a huge investment potential for prospective investors. Increasing Demand for Retail Spaces The Ghanaian taste and patronage for supermarkets and shopping malls has witnessed a dramatic turn in recent times. This appeared to have been influenced by the cosmopolitan nature of our cities in recent times. This turn of events has led to high demand for retail spaces across the various cities in Ghana thereby making investment in this sector very exciting for prospective investors. Take Melcom Ghana for example, Melcom Ghana started the Melcom Mini model a few years ago which has led to the creation of a more decentralized medium size shopping Malls across all local suburbs in all the major cities in Ghana. Thriving Hospitality Industry The
16Apr’25
EXPLORING THE SHELL HOUSING DEVELOPMENT MODEL AS A COMPLIMENTARY TOOL TO BRIDGING GHANA’S PERENIAL HOUSING CRISES
EXPLORING THE SHELL HOUSING DEVELOPMENT MODEL AS A COMPLIMENTARY TOOL TO BRIDGING GHANA’S PERENIAL HOUSING CRISES Published: April 2025 Author: Daniel Kontie Category: Real Estate In attempt to provide alternative expert’s perspective on how we can tackle the perennial housing crises in Ghana, I have written and published quite a number of articles on alternative development models that we can adopt as a state to help mitigate if not bridge the housing gap entirely. It is common knowledge that several state interventions have been implemented in the past, but it appears the solution to this housing crisis still remains far from reach. It is sad to know however that, our approach to solving the housing crises in the past has been so prosaic. We keep operating a one-sided model repeatedly, yet expecting different results. Government upon government have come and gone, tried to build affordable housing units for the citizenry particularly the low to middle income class of society, whilst private developers are making supernormal gains on the flipside and skillfully avoiding taxes under the pretext of providing affordable housing to Ghanaians. But the truth is, until we stop the pretense, the pork barrel politics and the theatrical approach to dealing with the issue, the crises may remain same or deteriorate further with time. I know I may have subjected myself to a barrage for making this statement but that is the truth and I am ready to face the consequences if that is what it will take to provoke a second thought and a national conversation on our methodology in solving the housing crisis that has become a national concern for some time now. Without bothering you with lengthy literature, between 2000 and 2008, the John Agyekum Kuffour, Aliu Mahama led administration initiated the affordable housing estate in Accra, Tema Community 24 and 26 and in Kumasi Asokore Mampong in the Ashanti region. Fast forward, the John Evans Atta Mills, John Dramani Mahama led administration also introduced the Saglemi affordable housing estate between 2008 and 2016. But the combined effect of this could not have any significant impact on the national housing crises. This is because the development concept for both regimes and previous interventions in my opinion was not well thought through and did not serve the intended purpose for which it was designed. I am beginning to think that broader stakeholder consultation was not done before the implementation of the concept. The thinking that a multi-storey building concept maximizes land use with the aim of cutting development cost to make the properties affordable for the low to middle income class is a mirage. The reason is that, by the time these houses are ready in fully completed units for sale; prices might have skyrocketed beyond the reach of the ordinary low income earner. Take the Tema Development Company (TDC) affordable housing Estate in Community 26 for example, the price of a completed 2bedroom apartment was sold at USD$28,000 as at 2023. This price in its cedi equivalent using the prevailing exchange rate of USD$15.50 today March 12, 2025 will be Ghs 434,000 which falls far out of the affordability of the low to middle income class. Consequentially, many of these apartments found their way into the hands of top politicians, partisan political party apparatchiks and the wealthy in society, acquiring these properties in large numbers for investment purposes which are now being resold or rented out at fantastically high prices. So, in trying to compare this multi-storey or finished building model to the shell housing development concept in solving the housing crises, we did a comparative cost estimation and analysis between the two using a 2bedroom house as a case study. The hypothetical 2 bedroom shell house in question here is only the structure of the house which comprised of the walls, roof, doors, windows and burglar-proof, using the 2025 first quarter average building material prices. It will interest you to know that the average cost of putting up this shell house was Ghs 198,000 excluding cost of land. By inferential analysis having done the arithmetic, it was crystal clear that the Ghs 434,000 which is the price of the 2bedroom apartment in the multi-storey building in the TDC estate in Community 26, can build 2 units of shell houses on a 70ft x 100ft plot of land in locations such as Applonia, Saglemi, Shai Hills, Dodowa etc and still have a balance that can take care of the cost of the land, all things being equal. I am very much aware of the argument that shell housing could occupy large land size compared to multi-storey buildings, that is true but the question is, what will be the wisdom in building completed units of normal or multi-storey buildings that the masses cannot raise the lump sums required to purchase them. Again, I am also conscious of the fact that, shell houses may be more expensive after completing considering the incremental construction method involved. But here again, the same question, what will be the wisdom in constructing finished housing units at a cost that the masses cannot raise the lump sums required to acquire them. Isn’t it better to offer or adopt a concept that comes with the least upfront cost possible to enable the masses have access, even though it may cost slightly higher in price after completion in the future?. Anyway, that is still subject to debate in subsequent articles, you may send us your views via the email address provided in this article. But whatever the case may be, it is important for us to understand that broader stakeholder consultation is fundamental in finding a lasting solution to this crisis. Now, the question one would ask is, what would I have advised if I were consulted on these government affordable housing projects as an industry thought leader. Today’s article seeks to explore shell housing development model as one that has the potential to reduce significantly, the cost of homeownership and making
15Apr’25
HARNESSING THE POTENTIAL OF THE OFF-PLAN REAL ESTATE DEVELOPMENT MODEL TO MITIGATE THE HOUSING CRISES IN GHANA: EXPLORING THE OPPORTUNITIES, ASSOCIATED RISKS AND RECOMMENDATIONS
HARNESSING THE POTENTIAL OF THE OFF-PLAN REAL ESTATE DEVELOPMENT MODEL TO MITIGATE THE HOUSING CRISES IN GHANA: EXPLORING THE OPPORTUNITIES, ASSOCIATED RISKS AND RECOMMENDATIONS Published: June 2024 Author: Daniel Kontie Category: Real Estate In our previous article “Breaking the 90/10 Syndrome in Residential Real Estate Development in Ghana”, the concept of Off-plan Development Model was mentioned as one of the key recommendations that investors could use to acquire decent properties for either personal use or for investment purposes. Today, we are treating off-plan as a full topic, but before I go into the intricacies of this all important subject, let me first recommend that you subscribe to the Business & Financial Times Newspaper (B&FT), Africa’s leading Business and Financial Media platform.This will keep you posted on new industry trends as you follow and read our articles in the “Construction & Real Estate Digest”, whilst taking advantage of other equally resourceful business and investment information for your personal growth.Now, coming back to the substance of our discussion, what then is the Off-plan Development Model?. It is a real estate development or financing model where a developer sells properties at discounted prices to prospective buyers before the properties are developed. The properties are most often marketed using brochures, 3D renderings, virtual impressions etc. The concept is such that the developer allocates the land or work-in-progress of the property to the prospective buyer together with an agreed flexible payment plan and a project delivery schedule. So as the buyer is making the installment payment, the developer develops the property for as long as it may take to complete depending on the agreement between the two. The model though difficult to attribute its origination to any specific individual, available literature reveals that, it has its root from the United Arab Emirates (UEA) in the 1980s where it was used to finance large-scale real estate projects. The model gained popularity in the 2000s as it allows developers to secure funding for projects without relying on the traditional bank financing. Today, off-plan development model is widely used across the globe in jurisdictions such as Dubai, London and New York, where the demand for properties often outpaces the available supply from luxury residential properties to large-scale commercial developments. It is also heartwarming to announce that, the concept has gained root not only in Ghana in the African continent but also in Nigeria and other African countries, putting shelter over the heads of many in a dispensation where skyrocketing property prices becomes the order of the day. In the Ghanaian context, the field and historical information we gathered between the year 2000 to 2023 suggests that, many of the real estate developers used this concept to grow into the big brands we know in the real estate space today. I would have loved to mention a few empirical Ghanaian success stories in this regard, but will let it slide for want of time and space. But it is important to say this on authority that, many of the millionaire Ghanaian developers are products of the Off-plan Development Model until its abuse in recent times. The purpose of this article is to explore this profound concept with special focus on the key the opportunity it presents, the challenges or risks factors associated with it and to offer recommendations to stakeholders, starting with the opportunities the Off-plan Development Model presents. Opportunities of the Off-plan Development Model Just like all other models, the off-plan development model presents opportunities to all stakeholders same as it does with its challenges. Developers The off-plan development model offers several opportunities to developers, principal among these are one, Capital Financing; with this concept, developers are able use the early-bird sales concept and the discounted pricing strategy that often comes with the off-plan model to secure funding by selling units before construction is completed. This provides them with the capital needed to fund the project, eliminating the reliance on bank credit facilities or other financing methods that often come with huge cost of borrowing. Apart from this, developers enjoy considerable Risk Mitigation that may have been caused as a result of unsold inventory. This is made possible because it offers them the opportunity to gauge market demands to adjust strategies that reflects current market needs as the development progresses over time. Moreover, the developer has higher chances of raking-in huge returns on investment (ROI) or increased profitability selling off-plan properties at premium prices compared to post-construction sales. Buyers or Investors Buyers enjoy concessionary purchase prices because, off-plan properties are often sold below market rates compared to completed properties. Apart from this, buyers enjoy flexible payment plans over an extended period of time that eases pressure on their finances. Investors also take advantage of these discounted price offerings to acquire many units as investment to avoid the negative effect of cash depreciation as liquid cash depreciates faster compared to landed properties. In addition, buyers have the flexibility to customize or make modifications to the property as the construction work progresses: This enables the buyers to choose finishes, layouts, design features etc, allowing them to personalize their property to suit their current or future needs or both as may be dictated by modern or market demand, before the property is completed. Also, the model offers buyers the opportunity to enjoy capital appreciation on the property as the construction progresses. The market value of off-plan properties may rise significantly which most often is the case. Buyers therefore benefit from capital gains by purchasing a property at a discounted price and seeing its value appreciate reasonably at the time the project is completed. Major Challenges or Risks Associated with the Off-Plan Model Having known the opportunities this model presents, it is also important to be mindful of the risks associated with it; Developers Construction delays are common with off-plan. It may be as a result of general economic recession making buyers unable to honor their payment obligations according to plan or it may be as a result of the developer diverting funds into other projects at the expense of buyers. This may cause significant delays that can cause dissatisfaction among buyers. If construction takes longer than expected, developers may lose interest as a result of price increases in building
15Apr’25
DEMYSTIFYING THE DYNAMICS OF LUXURY RESIDENTIAL PROPERTY DEVELOPMENT IN GHANA: A PREREQUISITE TO A SUSTAINABLE REAL ESTATE WEALTH CREATION
DEMYSTIFYING THE DYNAMICS OF LUXURY RESIDENTIAL PROPERTY DEVELOPMENT IN GHANA: A PREREQUISITE TO A SUSTAINABLE REAL ESTATE WEALTH CREATION Published: April 2025 Author: Daniel Kontie Category: Real Estate Last week I had a telephone call from a potential investor from the United States of America and this was what ensued. “Daniel, I want you to get a land that can build at least 100 luxury homes in a gated community at a prime area in Accra. I have a 3million dollar investment to cash out to start with, and will top up to complete the construction of all the hundred (100) units before we start selling” he said. I laughed in my mind and was wondering if this man is really serious. He was so enthused with the real estate investment opportunities he discovered after reading my article titled “Breaking the 90/10 Syndrome in Residential Real Estate Development in Ghana”. He was so excited to the extent that he could not even introduce himself before going into the business of day. I could feel how passionate he was and his readiness to seize this investment opportunity. But honestly, I became worried for him because I noticed two fundamental errors in his statement about luxury residential property investment which actually informed today’s article on this subject. First and foremost, to build a one hundred (100) luxury homes in a gated community is a fundamental error, it won’t sell. Second, to build luxury homes to 100% completion before you begin to sell is another fundamental error, that won’t sell either. So, the question now is, why are these considered fundamental errors?. Do not go away; stay tuned as we demystify the dynamics or behavioral characteristics of the class of persons who patronize luxury residential properties in Ghana. The purpose is to help prospective investors or developers who are nurturing interest in venturing into this particular niche in the real estate market to enable them make informed investment decisions. But before we go into the substantive dynamics, let me first deal with the aforementioned fundamental errors raised in connection with my engagement with this prospective investor. The number one reason why it is not ideal to build luxury homes to a 100% completion before you begin to sell is this; people who buy these properties are high net worth individuals. This class of buyers has special tastes and preferences which may not have been contemplated or captured by the designer at the conceptualization or design stage of the property. These luxury property buyers are particular about their taste and preferences and will always dictate what they want in the property and what they don’t. So building your custom design that may not factor in the exact features that aligns with their tastes and preferences makes it extremely difficult for them to patronize the properties. High net worth individuals are people who have made their money and will go in for a property that has their preferred features and they don’t mind paying any price for it. Second, these are buyers who are exclusivity conscious. They do not want to live in mass gated communities. They believe that the wealthy are few in society and they will want to associate with their fellow few wealthy compatriots. Apart from the essentials of life, they believe that anything in mass supply is not for the wealthy. This is the reason why in affluent communities such as Cantonment, East Legon, Labone, Roman Ridge etc, you hardly find gated communities and even the few one may find, do not contain up to ten (10) properties. Isn’t this weird and interesting about this class of buyers, but anyway that is the reality any prospective developer or investor has to come to terms with if only they want to maximize returns on their investment playing in this segment of the real estate market in Ghana. Having said this, let us now go into the details, mind you, the religious implementation of these dynamics will make your luxury properties sell even before the construction process begin, all things being equal. We shall be examining seven (7) behavioral characteristics among which are these; class consciousness, location consciousness, space lovers, pleasure consciousness, privacy, safety and security consciousness, exclusivity consciousness and above all, environmental and sustainability consciousness. We shall be taking these one after the other. Class Consciousness It is important to let you understand that buyers of luxury properties are high net worth individuals and money is not really their problem. They are not just looking for a place to lay their head; rather their focus is on prestige. They will always like to acquire properties that stand out reflecting their perceived success and wealth for as long as it outstanding and located in an area known to be elite vicinity. So majority of these wealthy people seek homes in affluent, well-known neighbourhoods just for them to feel belonged. This is the reason why properties built in areas such as Cantonment, Labone, East Legon, Roman Ridge; North Ridge etc will sell at any price yet will still get buyers within the shortest possible time. Location Consciousness Again these high net worth individuals are very conscious about the location of the property. They will always prefer properties that are in proximity to major and top-notch amenities and facilities. For instance, these are frequent travellers and will always ask, how many kilometres is the location of the property in question to the airport, or to other amenities such as top medical facilities, schools, police stations, fire stations, the courts of law, state-of-the-art shopping malls, universal banks, forex bureaus, cimas, passport office just to mention a few. That is why one can easily find all these facilities and even more around vicinities where these people live for instance East Legon, Cantonment, Labone, Roman Ridge, North Ridge etc. Space Lovers This class of buyers like to have big houses. They like townhouses or mansions with spacious compounds to park at least between 4
15Apr’25
10 COMPELLING REASONS WHY INVESTING IN A GATED COMMUNITY IS THE MOST LUCRATIVE REAL ESTATE INVESTMENT IN GHANA
10 COMPELLING REASONS WHY INVESTING IN A GATED COMMUNITY IS THE MOST LUCRATIVE REAL ESTATE INVESTMENT IN GHANA Published: April 2025 Author: Daniel Kontie Category: Real Estate In my previous article on alternative financing options for real estate development published on February 23, 2025, I made a figurative remark about the real estate investment prospects in Ghana. I am pretty sure many might have taken it lightly and for granted. But the truth is, despite the industry’s unique challenges, it still remains one of the most promising sectors for investment in the Ghanaian economy. However, one’s success depends to a very large extent on the level of industry information one has, the choice of the type of real estate investment to undertake, and most importantly, one’s strategy which must not be anything less than a tactically superior blueprint that can deliver prompt results. The purpose of today’s article is give you a brief historical review of the rise to prominence and demand for gated communities in Ghana, the factors driving this demand and what makes it the most lucrative investment option in the real estate sector. To begin with, the rise in demand for gated communities started back in the 90s when the Ghanaian economy experienced a dramatic expansion as a result of the policies of the neoliberal regime. The regime witnessed a mass exodus of people into urban centers such as Accra, Kumasi, Tokoradi etc. This development led to a rise in demand for upscale housing options. So as the economy expanded so did the middle class who sought secure and exclusive living spaces as safe havens from the congested, noisy and crime-ridden urban central areas. So, gated communities thrived as a response to this demand, offering private and secure homes with modern amenities, perimeter walls, electronically controlled access gates, advanced CCTV surveillance systems, enhanced telecommunication services such as broadband internet connectivity, home land lines etc. Today gated communities have evolved significantly beyond just the provision of security and exclusivity; they offer a blend of security and luxury state-of-the-art amenities such as swimming pools, gymnasiums, supermarkets, medical centers, pharmacies, recreational facilities et cetera. These communities have suddenly become symbols of prestige, reflecting one’s perceived success and affluence in society. Now come with us as we walk you through the ten (10) compelling factors driving this demand for gated communities and how developers have leveraged on this demand to amass wealth for themselves, as we show you also, how one can take advantage of this demand whilst the opportunity still exist. These factors includes but not limited to the following; the growing need for security as insecurity grows, the growing need for privacy, the increasing need for class in society, the consistent middle class growth, the increasing need for peace of mind and serenity, land litigation and encroachment, value appreciation and investment appeal, easy access to social amenities, family values priority, sanitation and sustainability consciousness etc. The Growing need for Security Security has been a major concern and priority to many Ghanaians even though the national crime statistics looks good from a global perspective. This state of security consciousness has led to individuals trying to explore housing options that provide some level of security leading to the high demand for gated communities. I must admit that despite the challenges associated with gated communities; it is still by far the best option when it comes to security assurance for residence. The provision of the perimeter walls with man guard at the gates and in some cases, CCTV surveillance systems are key to maintaining some level of security in gated communities. There are even some communities where visitors will have to be interviewed at the gate and subsequently a telephone call placed on the resident in question to confirm knowledge about the visitor before he is allowed in. The provision of these security measures made gated communities comparatively safer, thereby causing a consistently high demand for gated communities since its inception in the housing sector in Ghana. Growing need for Privacy It is important to know that the paradigm shift from the African extended family system to the western nuclear family style has a significant impact on the demand for certain type of housing. People are more particular about their nuclear family and its privacy and the concept of gated communities is the only concept that appears to provide this level of privacy. In gated communities, hardly will you find stray dogs, goats etc loitering around or surprise visits from extended family members, friends, creditors, spies, intruders etc. It is sometimes even difficult for you to know your next door neighbor in gated communities. This shows the level of privacy one can have living in a gated community. Gated communities offer a high sense of exclusivity which appeals to those who value their privacy and would want to distinguish themselves from the rest of society. Today our society is full of people who are privacy oriented hence, the high demand for gated communities in Ghana. Growing need for Social class In Ghana, living in a gated community is perceived a symbol of high social class reflecting wealth and success. This is the more reason why most often, prices of goods and services in or around gated communities are expensive compared to the regular community. Prices charged for goods and services are high because of the perception that people living in gated communities are wealthy. So, in order to have that sense of being classified as wealthy and influential, people will go the extra-mile to rent or acquire homes in gated communities, contributing to the persistent increase in demand for gated communities. Consistent Middle Class Growth Majority of Ghana’s gated communities are a mix of low-end and mid-end properties which fell within the affordability of the middle class. Therefore, a consistent growing middle class will naturally lead to higher demand for these properties as this class is in desperate need of security, exclusivity and serenity. Ghana’s middle class has
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