HOW FOREIGN DIRECT REAL ESTATE INVESTMENT IS SHAPING GHANA'S PROPERTY MARKET: A COMPREHENSIVE REVIEW OF THE PROS, THE CONS AND - AFRICA CONTINENTAL ENGINEERING & CONSTRUCTION NETWORK

HOW FOREIGN DIRECT REAL ESTATE INVESTMENT IS SHAPING GHANA’S PROPERTY MARKET: A COMPREHENSIVE REVIEW OF THE PROS AND CONS 

 

Ghana’s real estate sector has emerged as a beacon of opportunity for foreign investors, driven by the nation’s political stability, economic growth, rapid urbanization and the legal framework that allows foreigners to own properties through leasehold agreements. This has made the investment climate conducive for foreign direct participation. The market has witnessed a significant uptick in foreign investment transforming the urban landscape in the past decades. 

This uptick trajectory also underscores the growing confidence of international investors in Ghana’s property market. The objective of this article is to give an overview of the foreign direct real estate investment in Ghana, the pros, the cons and to offer recommendations for mutual growth. To begin with, let me start with a few statistics of these FDIs in the Ghanaian real estate market. The purpose is to enable you appreciate the extent of this foreign direct real estate investment and how this is shaping the Ghanaian real estate landscape.

Foreign-Invested Real Estate Projects in Accra

As stated earlier, it is important for us to have the statistics of these foreign direct real estate investments in the Ghanaian market. This will help us understand the reality and the degree of influence they have in the market. This analogy is done using some selected foreign direct real estate projects in only prime locations in Accra compared to local content participation. 

In fact, it is a basic fact that Accra, the capital city, has been the focal point of several high-profile real estate developments funded by foreign investors. Here are a few of these projects: The Alto, 27-floor, Azure, 17-floor and the Aqua, 10-floor high-rise properties all located in the Airport Residential area developed by Trassaco Estate Development Company Ltd.

The Octagon at Tudu, Accra, a 10-floor mixed-use development developed by Dream Reality Company Ltd. The Mirage, Airport residential, 16-floor high-rise property, developed by the Yagmur Group, the Iris Boutique Apartments, 10-floor property developed by H&F Realty Ltd, The Gallery, Loxwood, 9 and 11 floors respectively as well as the Lenox located at Shiashe, East Legon, The Steps, 37-floors, located at Accra Business District etc, all developed by Clifton Homes. 

The Atlantic Tower, 15-floors, located at Airport, is developed by Wahhab Estate Co. Ltd, a member of the Meridian Group. The Solaris, a 13-floor luxury apartment building located at Osu, developed by Swami India Developers. The AVA Residence, 12-floor located at Airport Residential developed by Cornerstone Developers, the Tribute at Airport Residential, developed by Denya Developers.

The Harmonia Residence, 17-floor, AGORA 21-floor, and Lagato, 20-floors all developed by Vaal Real Estate Ghana. 

The Prestige, a 14-floor mix-use luxury apartment project still under construction, adjacent Airport Shell Filling Station developed by i2 Development, the Apex Suits, 8-floor building, the Equator, a 12-floor building, the Zion House, a 4-floor commercial property all developed by Bot Properties. 

The rest are the Kass Tower, a 17-floor mix-use property developed by one Mr. Kadir Yadigr a foreign investor, etc. In fact, time and space will fail us to list all the luxury high-rise properties in prime locations in Accra developed by foreign direct investors in the Ghanaian Real Estate sector. Mention is not yet made about luxury residential town homes and other high-level commercial properties such as hotel facilities, shopping malls etc.

 

Now, comparing the above to our local content participation within the same space, it is obvious that, there is virtually no local Ghanaian investment that can really match this. The few we can count will be the Heritage Tower, a 16-floor property at Ridge, developed by the Social Security and National Insurance Trust (SSNIT). 

The Signature Apartments, Selton Skpe, which is still under construction, both by CapeMay properties, the Oasis Residence and Belmonte developed by CPL Developers and the few developments by Quao Realty, Goldkeys and Mobus properties etc. 

Also, in the area of commercial space and hospitality real estate such as the hotels and Malls, Movenpick Ambassador Hotel, the Kempinski Gold Coast Hotel, the Marriott Hotel, the Accra Mall, Achimota Mall, West Hill Mall, Atlantic Mall, Marina Mall etc are all foreign investor developments. 

Taking the above into consideration, one will not be far from right to conclude that local participation in this class of real estate investment in Ghana is virtually non-existent.

Positive Impact of Foreign Direct Real Estate Investment

The infusion of foreign capital into Ghana’s property market has yielded several positive outcomes even though there is the concern of low local participation. It has led to massive infrastructure development, job creation, knowledge and technology transfer, economic diversification, capital inflow, urban renewal and revitalization et cetera.  We shall treat each briefly citing a few practical projects.

Infrastructure Development

These foreign investors have introduced cutting-edge architectural designs, building technology, and international construction standards leading to the construction of modern infrastructure, including roads, utilities and public amenities, enhancing the overall urban environment. 

This is demonstrated in our case in drone ariel shots taken from selected locations such as the Airport Residential Area, Roman Ridge, North Ridge, Shiashie, Cantonment and Labone. In fact, those in the Ghanaian real estate sector for long would testify that indeed, there has been a significant foreign building infrastructure improvement in the aforementioned locations compared to same a few decades ago.

Job Creation

Real estate projects generate employment opportunities in construction, property management, building material/equipment inputs sector and other related services. Employment within the sector has gone up considerably to the extent that labor has to be imported from our neighboring countries particularly, Togo, Nigeria and Benin et cetera to bridge the construction sector labor deficit that has been the case in Ghana for some time now.

Technology Transfer

Foreign participation has indeed introduced advanced construction techniques and management practices, elevating industry standards. This has given local professionals exposure to international best practices, enhancing skills and industry standards. This has really had a significant impact on the way we design, with local development now reflecting the modern trends introduced by these multinational investors. A classic example is the design of the Signature House and Selton Skye properties undertaken by CapeMay Properties.

 

Economic Diversification

The growth of foreign direct real estate investment has contributed to diversifying Ghana’s economy beyond the traditional sectors such as agriculture, mining and services. In 2023 alone Ghana’s real estate sector contributed approximately 1.6 billion cedis (USD$ 121.2 million) to the country’s GDP, according to Statista (2024), diversifying the Ghanaian economy which has predominantly been services based over the years.

Capital Inflow

It is common knowledge that FDI in general brings large volumes of capital into a country. In our case, the proliferation of foreign direct real estate participation has boosted infrastructure and urban development without straining public finances. This in turn has attracted more direct foreign investment into other sectors of the economy such as the building, construction machinery and material supplying sectors, with the industrial and power tools/equipment distributorship also witnessing a significant investor attraction as a result.

 

Urban Renewal and Revitalization

These foreign direct investors have helped in redeveloping underutilized or blighted urban areas, improving aesthetics and usability. One practical example is the Vilagio Vista area which was an abandoned area because of its proximity to a storm drain until it was turned into one of the most prestigious high-rise facilities in Ghana. 

Another example worth mentioning is the Shiashe-East Legon area along the Motorway, which was abandoned many years ago and has now been turned into a stretch of high-rise structures, housing the stunning mix-use properties, namely, the Gallery, Luxwood and several others still undergoing construction. Time and space will fail us to present a comprehensive list of all such facilities in Accra and across major cities in Ghana.

Increased Tax Revenue

Property taxes, corporate income taxes and VAT from foreign direct real estate investors have contributed to national revenue whilst boosting GDP growth.

Boost to Related Sectors

Foreign direct real estate investments have boosted various sectors of the economy by virtue of their distribution across various sectors of the real estate value chain including hospitality, retail, logistics with their trickling down effect on other sectors of the economy such as financial services and the general services sector.

Improved Market Competitiveness

Also, foreign direct real estate investment has raised market competitiveness. This to some extent guaranteed quality and gives clients value for money. In fact, the proliferation of these multinational investments in the sector has led to improved building and infrastructure designs compared to what we saw decades back. Besides, it has also led to increased supply leading to keen competition, improving quality and diversifying options for buyers and tenants.

Tourism and Investment Appeal

It is also true that modern and robust infrastructure can serve as an attraction to tourists. Dubai has become a global center for tourism today because of its stunning real estate infrastructure. Iconic real estate projects can improve a country’s global image and attract more tourists and investors. 

A classic example in our case is the Signature apartments and a few others in Accra. Notwithstanding, a city with well-organized modern infrastructure is automatically a bait for investors and tourists alike. Ghana’s Airport City is one of such and is known to have attracted a lot of visits by foreign tourists over the years.

Drawbacks of Foreign Direct Real Estate Investment in Ghana

In as much as we appreciate the positive impact of foreign direct real estate investments, it comes with several other drawbacks that require urgent state policy intervention. We shall deal with just a few of that. But before we go into that, let me clarify here that the writer is not an anti-foreign direct investment ideologist. 

Therefore, whatever we discuss here under this session is purely based on a nationalists’ point of view which a citizen of any sovereign state would recommend for his homeland. Ghana is a globally friendly business destination and so is the writer of this article. Now, to begin with, foreign direct investment into the real estate sector has triggered inflationary property prices, leading to little local ownership or participation particularly in the luxury real estate sector. 

This has distorted market priorities, hence, the market failure we see today. Apart from the market failure, it has also led to capital flight, gentrification, speculative development and macroeconomic vulnerability just to mention a few. We shall take them one after the other citing a practical example in each case.

Inflated Property Prices

Foreign demand can push prices beyond local affordability, especially in prime areas, displacing middle- and low-income citizens. This is normally caused by foreign buyers who are willing to pay higher prices for properties located in prime areas in a globally attractive investment destination such as Ghana. 

On the flipside is the other group of foreign buyers not well informed about the average value or prices of properties, may buy properties with inflated prices beyond their actual market values. These and many other reasons have triggered inflationary property prices in Ghana. The consequential effect is the displacement of the middle to low indigenous income earners and developer from the market.

Loss of Local Ownership

Excessive foreign control over land and property reduces local stake and influence in the built environment. This is also true in the Ghanaian real estate market. Apart from the luxury real estate sector which has been taken over already, there is still a significant presence of foreign investment in the mid-end residential property sector etc. 

Not only did we lose ownership in both the luxury and mid-end sectors, we also lost ownership in the building material and equipment supply chain with large scale equipment and material suppliers predominantly Chinese, Turkish, Indian and the Lebanese, just to mention.

Capital Flight

One of the serious drawbacks of this proliferation of foreign direct real estate investment in Ghana is the higher chances of capital flight. Any time there is uncertainty in the investment climate, a capital flight is likely to occur. This is the situation where profits made by foreign investors are repatriated to the investors’ home countries, limiting reinvestment into the domestic economy. This was what happened between 2013 and 2015 when Ghana experienced a prolonged power crises popularly known in Ghana as “dumsor”. 

A lot of these foreign direct investors, including real estate investors, repatriated profits whilst others withheld investment and rather retrenched staff. In fact, there were many media reports alleging a significant number of these investors diverting profits to set up in neighboring countries known to have relatively stable power supply at the time.

Distorted Market Priorities

Developers have always focused on luxury properties targeting expatriate clients, neglecting affordable housing needs. This is exactly the situation we face as a country with about 99% of foreign investments in our space focusing on luxury properties at the expense of affordable housing.

Gentrification

This is the process in which wealthier or privileged individuals move into neighborhoods that are largely populated by poor and average class of people, ultimately displacing the original local residents. Many local communities have been displaced and been redeveloped for high-end use, changing social dynamics. 

We have seen many local communities being displaced because of this. 

I am pretty sure many of you reading this article have witnessed residential properties close to major roads in our communities being demolished and redeveloped into commercial properties displacing local people into the outskirts of the town. This trend continues to be the case in Ghana even with some of these affected locals moving into slam communities.

Economic Vulnerability

Heavy reliance on foreign capital can make the sector sensitive to global market shocks or investor sentiment shifts. For our political stability, Ghana has not experience this in its extreme yet. But if the trend continues, we shall eventually get there one day. This is not a doom say.  

Speculative Development

Foreign buyers may leave properties unoccupied, turning cities into “ghost towns” and undermining urban vitality. For some time now, a little survey we did on high-rise properties in prime locations in Accra confirmed a fantastically low occupancy rate and many of these properties are suspected to be owned by foreign buyers. This speculative development focusing on luxury properties being patronized by foreign nationals or non-resident clients may turn our capital city into a ghost city if it is not well checked. 

Recommendations

To mitigate the drawbacks of excessive foreign direct real estate investment, here are a few key recommendations:

Strengthen Land Use and Zoning Regulations

Enforce zoning laws to protect residential areas and ensure balanced urban development whilst restricting foreign ownership in sensitive or high-demand local zones.

Set Ownership and Usage Guidelines

Introduce caps on foreign land ownership or require joint ventures with local entities.  Also, impose minimum occupancy or development timelines to avoid speculative development and land banking.

Introduce Progressive Property Taxes

This will tax vacant luxury properties owned by foreigners to discourage underutilization and channel those tax revenue into affordable housing and infrastructure.

Promote Affordable Housing Investment

Offer incentives (e.g., tax breaks or fast-track permits) to foreign investors who contribute to affordable or social housing. Also, mandate that a percentage of large projects undertaken by foreign investors be dedicated to lower-income groups. Government may secure lands elsewhere for such development for displaced local people.

Encourage Local Participation

Support local developers with access to finance, land, and capacity-building, whilst promoting public-private partnerships involving Ghanaians in foreign-led projects.

Improve Transparency and Regulation

Digitize land records to prevent land grabbing and ensure clear ownership.  Also tighten monitoring of offshore entities and shell companies involved in real estate.

Control Capital Flight

 Impose reinvestment obligations or withholding taxes on profits repatriated abroad whilst enforcing local banking and reinvestment by foreign firms.

Environmental and Social Impact Assessments

Make these assessments mandatory before project approval to safeguard communities. Also enforce corporate social responsibility (CSR) commitments.

Data Collection and Market Intelligence

Establish a national real estate database to track foreign investment patterns.  Use data to inform policy, taxation, and urban planning.

 

Public Awareness and Stakeholder Engagement

Involve communities in planning decisions. Promote transparency in land sales and project approvals. A balanced FDI policy ensures growth without undermining local interests, housing equity, or urban resilience.

Conclusion

Foreign direct investment has been instrumental in transforming Ghana’s property market, particularly in Accra. The successful execution of landmark projects underscores the potential for a greater influx of foreign direct investment. As Ghana continues its trajectory of growth and modernization, the real estate sector offers a compelling avenue for investment, promising good returns on investments hence, the need for a state policy intervention to mitigate the impact of the drawbacks of foreign direct real estate investment discussed. 

The fundamentals do not look good. This is a writing on the wall. It is either we correct it consciously or the system will self-correct, but remember, the consequences of the self-correction may not be palatable.

For real estate consultancy services, land banking investment strategies, or bespoke advisory on property investments across Ghana and Africa, contact the Africa Continental Engineering & Construction Network Ltd. We have you covered 360℃.

Reference

 

• • Statista (2024): Ghana Real Estate Market Outlook: The year 2024 to the year 2029; Real Estate Reports.

• • Africa Continental Engineering & Construction Network (2024): Investigation into the occupancy rate of luxury commercial properties in prime locations in Accra.

• • Meqasa Properties (2021): The 10 Tallest Buildings in Ghana: A review of High-rise Buildings in Ghana.