THE ILLIQUIDITY TRAP IN GHANA’S REAL ESTATE MARKET: WHY PROPERTY-HEAVY PORTFOLIOS ACROSS AFRICA REQUIRES A RETHINK - AFRICA CONTINENTAL ENGINEERING & CONSTRUCTION NETWORK

THE ILLIQUIDITY TRAP IN GHANA’S REAL ESTATE MARKET: WHY PROPERTY-HEAVY PORTFOLIOS ACROSS AFRICA REQUIRES A RETHINK

As a real estate developer and consultant with extensive experience across major African markets, particularly Ghana, I have consistently highlighted the sector’s strong profitability. However, there is a critical dimension of real estate investment in Ghana that industry players rarely disclose. Until now, I have not addressed it directly.

But today, I take a deliberate step to bring this issue to the attention of diaspora investors in particular and all new market entrants, being fully aware that such transparency may be met with resistance from fellow industry participants. Nonetheless, I remain firmly convinced that market integrity, trust and openness, though sometimes uncomfortable in the short term; are essential for building a resilient and credible real estate investment environment. 

To be honest with you, the illiquidity challenge is a reality many developers, real estate brokers, professionals and consultants avoid mentioning. They focus only on profitability while concealing this significant risk for their own parochial interests. But before we go into the nitty-gritty of today’s discussion, let me remind you that, the Africa Continental Engineering & Construction Network Ltd stands out as one of Ghana’s leading real estate developers and consultants. From land acquisition, title registration, architectural design, general construction, property development, real estate investment advisory services et cetera, we provide a 360ºC service experience. 

If you are ready to move from interest to investment, kindly visit the property page, explore available properties and reach out to our team for a swift professional service delivery. With thousands of serviced litigation-free parcels of land across Accra and key growth corridors, we are uniquely positioned to help you unlock value in residential, commercial and industrial real estate. Now, let us go into the substantive discussion.

A few years ago, I was mandated to sell a 5-bedroom property in Tema Community 25 behind the Devtraco Estate valued at approximately USD $200,000, an asset that on paper reflected the strong profitability and value appreciation typical of Ghana’s real estate market. However, despite being well-located and competitively priced, the property took nearly 4 years to sell even with six other agents engaged alongside myself. This highlights a critical disconnect between asset value and market liquidity in Ghana’s real estate market.

Over this period, the property went through repeated cycles of listing, negotiations and several failed closures, effectively locking in the client’s capital. This challenge is not isolated. I am currently handling seven repossessed properties for a financial institution across prime areas such as East Legon, Trassaco Valley Estate, Tema and after more than two years, none has been sold. These experiences underscore a fundamental paradox in Ghana’s real estate sector, whilst property investment remains highly profitable; it is significantly illiquid, often undermining the very essence of investment.

This experience is not anecdotal in the narrow sense, it is emblematic of a broader structural issue within Ghana’s real estate market and indeed, across much of sub-Saharan Africa. It points to a critical but under-discussed dimension of property investment: illiquidity.

The Illusion of Wealth: When Valuation does not Equal Liquidity

Property investment discourse in Ghana is heavily skewed toward appreciation. Conversations frequently highlight rising land values in East Legon, sustained demand in Airport Residential, and rapid development in growth corridors such as the East Legon Hills etc. These narratives are not without merit, Ghana’s urban property markets have delivered substantial capital gains over the past two decades.

However, appreciation alone does not equate to financial utility. A property may triple in value over five (5) years, yet if it cannot be sold or leveraged within a reasonable timeframe, its economic usefulness becomes severely constrained. In fact, evidence suggests that in markets like Ghana, price corrections often occur not through sharp declines but through reduced transaction volumes and extended selling periods (Africanvestor, 2026). In effect, liquidity not price, absorbs market shocks.

This creates a persistent illusion of wealth. Investors appear financially robust based on asset valuations, yet their ability to deploy that wealth in response to real-world needs remains limited.

The Human Cost of Illiquidity

The implications of illiquidity extend beyond abstract financial theory into the lived realities of investors. During the 4year period it took to sell the property in question, any urgent need for capital, whether for healthcare, education or business investment would have exposed a fundamental vulnerability.

In such scenarios, the asset’s nominal value becomes irrelevant. What matters is access. Without the ability to convert property into cash quickly or to borrow against it efficiently, the investor is left in a paradoxical position; asset-rich but cash-strapped. This phenomenon is increasingly recognized across African markets, where property ownership is often seen as a primary store of wealth but not necessarily a flexible financial instrument.

Structural Drivers of Illiquidity in Ghana’s Property Market

The illiquidity observed in Ghana’s real estate sector is not incidental, it is the product of several reinforcing structural constraints. Mortgage penetration remains fantastically low, with fewer than 5% of homeowners accessing formal housing finance (Graphic Business, 2026). High interest rates, historically exceeding 30% have made borrowing prohibitively expensive for most households. As a result, the market is dominated by cash transactions, which significantly limits the pool of potential buyers and slows transaction cycles.

Compounding this is the underdevelopment of Ghana’s housing finance system. The absence of a robust secondary mortgage market means that financial institutions cannot easily offload mortgage risk or recycle capital. This constrains lending capacity and reinforces a cautious approach to property-backed financing.

Banks in turn, exhibit understandable reluctance to extend credit against residential property. The reason is this, when defaults occur, lenders are left holding collateral that is itself difficult to liquidate as it is the case with the financial institution’s repossessed properties I mentioned earlier, which I have listed for the past 2 years without a single sale. Empirical studies confirm that the usability of landed property as collateral in Ghana is heavily influenced by its marketability and legal clarity (Heliyon, 2023).

In a market characterized by slow sales and complex title verification processes, collateral risk becomes another central concern. Legal and institutional inefficiencies further exacerbate the problem. Lengthy land registration procedures, overlapping claims and protracted dispute resolution timelines increase transaction costs and delay asset transfers even when buyers are identified. Deals can stall or collapse due to title uncertainties.

Finally, the demand structure of the market is relatively narrow. High-value properties often depend on a limited pool of buyers, including diaspora investors and high-net-worth individuals. This concentration reduces market depth and contributes to extended time-on-market, particularly during periods of economic uncertainty (MarcoPolis, 2023).

Why Property Markets are more Liquid in Developed Economies

In contrast, property markets in countries such as the United States and the United Kingdom operate within highly developed financial ecosystems that enhance liquidity. Mortgage systems in these markets are deep and accessible, enabling a broad base of buyers to participate. More importantly, homeowners have access to financial instruments that allow them to unlock the value of their properties without selling them. Home equity lines of credit, refinancing options, and equity release schemes provide flexible avenues for accessing capital.

These systems are supported by secondary mortgage markets, where loans are bundled into securities and sold to investors. This mechanism allows banks to recover liquidity quickly and extend further credit, thereby sustaining market activity. Legal frameworks also play a crucial role. Efficient foreclosure processes and enforceable property rights reduce uncertainty for lenders and investors alike. 

In addition, centralized and digitized property listing platforms improve transparency, facilitate price discovery and shorten transaction timelines. Together, these elements create an environment in which property is not only a store of value but also a readily accessible financial resource.

The Missing Middle in Ghana: No Path between Ownership and Liquidity

One of the defining characteristics of Ghana’s property market is the absence of intermediary financial mechanisms. Property owners typically face a binary choice; either sell the asset outright or forgo access to its value. There is limited availability of structured products such as home equity loans, refinancing options or reverse mortgages. This lack of financial intermediation prevents property from functioning as a dynamic asset within the broader economy. As a result, wealth remains locked in physical structures rather than being mobilized for productive use.

Macroeconomic Implications: When Capital Remains Trapped

The consequences of property illiquidity extend beyond individual investors to the broader economy. When significant portions of household wealth are tied up in illiquid assets, the flow of capital into productive sectors is constrained. Research indicates that credit access remains a major challenge for businesses in Ghana, with a substantial proportion of enterprises facing financing limitations (PMC Housing Study, 2023).

In this context, the inability to leverage property assets for credit represents a missed opportunity for economic expansion. Illiquidity therefore, is not merely a market inefficiency, it is a structural drag on economic growth.

Toward a more Liquid Property Market: A Reform Agenda for Ghana

Addressing illiquidity in Ghana’s real estate sector requires a coordinated and systemic approach. A critical first step is the development of a secondary mortgage market. By enabling financial institutions to securitize and sell mortgage assets, such a system would improve liquidity within the banking sector and expand access to housing finance. Equally important is the digitization of land and title registration systems. Reliable and transparent property records would reduce transaction risks, enhance collateral quality and accelerate deal execution.

The introduction of property-backed financial products, including home equity loans and structured refinancing options, would provide property owners with alternatives to outright sale. These instruments would allow investors to access capital while retaining ownership, thereby improving financial flexibility. Legal reforms are also essential. Streamlining land dispute resolution and strengthening enforcement mechanisms would reduce uncertainty and increase investor confidence.

Finally, the establishment of a centralized property exchange or listing platform could significantly improve market transparency and liquidity. By standardizing information and facilitating transactions, such a platform would shorten time-on-market and broaden participation.

Conclusion: Rethinking Property as both Asset and Constraint

Property investment in Ghana remains a compelling proposition, but it must be approached with a clear understanding of its limitations. The central issue is not whether property appreciates, it often does, but whether that appreciation can be translated into usable wealth within a meaningful timeframe.

Investors must therefore broaden their analytical framework. It is no longer sufficient to ask what an asset might be worth in the future. Equally important is the question of accessibility. How quickly and efficiently can that value be realized or leveraged when needed. Until the structural constraints that underpin illiquidity are addressed, property in Ghana will continue to function as a largely static store of value rather than a dynamic financial asset. Recognizing this reality is the first step toward making more informed and resilient property investment decisions.

But before we part, do note that information provided in this article or any article by this writer are the opinions or views of the writer for general informational purposes and does not constitute professional or legal advice. Readers are therefore advised to consult us as their certified professionals/consultants or any certified professional or consultant, before making any legally binding decision or making any commitment that has financial implications.

References

• Africanvestor (2026). Ghana Real Estate Market Analysis. https://theafricanvestor.com/blogs/news/ghana-real-estate-forecasts
• Graphic Business (2026). Ghana’s Property Boom and Mortgage Penetration.https://www.graphic.com.gh/business/business-news/building-the-future-ghanas-property-boom-the-new-real-estate-economics.amp.html
• Heliyon Journal (2023). Landed Property and Access to Credit in Ghana. https://www.sciencedirect.com/journal/heliyon
• MarcoPolis (2023). Risks in Ghana’s Luxury Real Estate Market. https://marcopolis.net
• ModernGhana (2013). Mortgage Securitization and Liquidity Constraints. https://www.modernghana.com
• News Ghana (2025). Interest Rates and Housing Finance Constraints. https://newsghana.com.gh
• PMC Housing Study (2023). Credit Constraints and Housing Finance in Ghana.https://www.ncbi.nlm.nih.gov/pmc/
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About Author

Daniel Kontie is a young enthusiastic Ghanaian Entrepreneur, the Executive Chairman of the Africa Infrastructure Group; comprising the Africa Continental Engineering & Construction Network Ltd (ACECN), Falcon 48 Developers; Africa Infrastructure Energy and Africa Land Banking Investment Ltd. All these are infant establishments, disrupting the conventional way of brand building across the African Continent. Daniel is a columnist, a writer and a member of the Ghana Built Environment Writers Association. He can be contacted via Tel: +233209032280; Email: d.kontie@acecnltd.com; Website: https://acecnltd.com/