Housing Needs of the Ghanaian Population

The Zoning Guidelines and Planning Standards (2011) recommended maximum room occupancy for low income households of two people per room. On the basis of two people per room occupancy, the need for rooms was calculated from the household sizes data from the 2000 Population Census by the UN Habitat Ghana National Housing Profile. Accordingly Housing Profile survey showed that almost 60% of households occupy only one room, 25% at two rooms, 9 percent at three, and 4 percent at both four and five – plus rooms. In contrast there is much lower demand for single rooms; greater demand for two rooms per household (at 2.5 and 3 persons per room occupancy rates). Very few households needed more than four rooms at that crowding threshold.

Based on the household size data for 2000 from GLSS 5 the Housing Profile estimated that there are more than 30% of households occupying one room who should be in more rooms at crowding thresholds of 2 persons per room and 2.5 persons per room, and more than 20 percent at the 3 persons per room threshold. Thus out of the 1,733,000 households in urban Ghana in 2000, between 295,000 and 520,000 households occupied single rooms when they should be in two or more rooms just to clear the various overcrowding thresholds.

The Housing Profile has estimated roughly that just to clear the shortfall in the number of rooms available for occupation in urban Ghana, at 2 persons per room, 1.7million rooms must be built. The provision for new households is, however, much greater. Assuming an urban mean household size 4.75 person, the population growth is likely to add two million extra urban households by 2020.
At the preferred threshold of 2 persons per room, total stocks of 4 million new rooms are already required for the additional households between 2000 and 2010. This includes the existing shortfall of 1.7 million rooms as at 2000. Additionally, 3.2 million rooms will be needed to keep up with population growth by 2020. Thus, going by the preferred maximum occupancy of two persons per room, a total of 7.2 million extra rooms are required by 2020 to be able to address the deficit and accommodate the new households. However, if the housing sector profile assumes the 1.5 million estimated supply between 2000 and 2010, the numbers of the rooms required during the next decade reduce to5.7 million at the preferred occupancy threshold of 2 persons per room.

Ministry of Water Resources, Works and Housing 2015


Housing Ownership In Ghana

The 2010 Population and Housing Census records that nationally about 47.2% of dwelling units are occupied by their owners, while 31.1% lived in rented premises, 20.8% are occupied rent free. The results indicate that ownership of living units is mainly by private individuals, households’ members and relatives who are not household members. Only 3.7% of dwelling units are owned by employers (public and private).
The Ghana Living Standards Survey (GLSS) 5 classifies housing into eight (8) types as follows;
1. Rooms in compounds
2. Rooms (other types)
3. Separate houses (bungalow )
4. Flats/ apartments
5. Semi – detached houses
6. Several huts / buildings
7. Tents/ improvised housing (kiosks/ containers)
8. Others

Compound houses still dominate the existing housing in urban Ghana but have declined from 62 per cent of Accra’s housing stock in 1990 to 42.5% in 2000. Newer forms, such as bungalows and especially flats and informal types (wooden shacks, kiosks, etc.) are growing very rapidly in proportion, but each is still a small component of the stock. In contrast, in Tamale, the housing sector profile found that all four of the sampled houses in newly- developing areas are compounds. Out of the 11.5 million rooms in Ghana, 40 percent (4.6 million) are in urban areas of which 13 percent (1.5 million) are in Greater Accra Region.

There is a high concentration of households in the urban Ghana (around two fifths – 2.7 million) occupying single rooms. It is evident, also, that about one third of urban households manage to obtain two rooms (31% in Accra) but very few enjoy three or more rooms. In Accra almost 60 percent of rented or rent – free properties are owned by private landlords; 50 percent in other urban areas. In Accra, about one in four renter and rent – free households live in houses owned by a relative but about 40 percent do in the rest of the urban areas. Publicly – owned housing is a small proportion of all rented and rent – free accommodation, only 9.3 percent in Accra and 4 percent elsewhere.

Ministry of Water Resources, Works and Housing..2015


Why Foreign Investors Are Having a Rethink about Ghana’s Real Estate Market

An old school friend once told me in 1999 that Ghana would one day become the ‘Jewel in the Crown’ of West Africa. At the time I thought nothing of this passing comment, but as Ghana’s GDP growth rate has averaged 7.72 percent from 2000-2013, several international investors during this period have taken note and have seen Ghana’s potential.

Initial Perspectives of International Real Estate Investors

In 2006, whilst I was working for a US law firm, I had just finished a meeting with one of my clients, a leading Real Estate Investment firm. I was speaking with the CEO about his firm’s strategy and I noted that West Africa and in particular Ghana appeared to be an interesting proposition. The CEO responded that his firm had never considered West Africa as an investment proposition and instead were focusing on the Middle-East, in particular Dubai and Abu Dhabi. This was not an uncommon response as several other real estate clients I spoke to seemed to have little interest in West Africa and were intending on expanding their portfolios and investments into the Far-East and Middle-East.

Francis Ayisi, former Vice President of Bank of Tokyo-Mitsubishi UFJ’s African desk in London and current Head of Business Banking at Standard Bank believes “Ghana was not initially seen as an attractive proposition to international real estate investors, the returns were fairly small and the appetite from the international real estate investor was not there, this view however has been changed since the discovery of oil in Ghana in 2007 which has lead to a boom in the real estate market.”

The Changing Perspectives of International Real Estate Investors

In 2007, in the deep waters off the coast of Ghana, a U.S. based oil Exploration Company, Kosmos Energy, discovered a substantial reservoir of oil now known as the Jubilee Oil Field. The finding was among West Africa’s largest, promising to change the fortunes of Ghana and its people.

Samir Jain, a former banker and CEO of Phikanet, a Strategy Consulting firm in the UAE notes “Ghana is seen as a politically stable economy and with the oil discoveries, this has lead to several large powerful property developers in Dubai and Abu Dhabi to seek to form joint ventures with local developers in Ghana and to undertake large scale residential and commercial developments.” This view is also supported by Tetyana Lementarova the Managing Partner of the FEOD Group, a leading law firm based in the Ukraine, who notes that, “since the discovery of oil in Ghana and in particular over the past few years, we have found that our clients in Russia and Ukraine have been looking at real estate investment opportunities as they believe the returns on real estate in Ghana far exceeds those found domestically.”

It is clear why international real estate investors are keen to obtain a foothold in the Ghanaian market. A recent report from the Housing Data Centre which collates information from the real estate and housing sector in Ghana, believe that house prices are likely to go up by at least 50 percent this year alone and The Ministry of Water Resources, Works and Housing believes the housing deficit in Ghana stands at around 1.7 million units. At the end of 2013, it was also reported that the average retail rent in Accra had risen by around 50 per cent to between $60 to $65 per square meter since 2012.

Companies and law firms based in Ghana are also seeing with interest the change in the types of investors coming into Ghana. Elikem Nutifafa Kuenyehia, founder, of Oxford & Beaumont, a firm headquartered in Accra, has seen the change in profile of foreign real estate investors and notes “In the ten years that I have been in Ghana, there has been a significant increase in foreign direct investment. One consequence has been demand for commercial and residential properties driven by foreign investors. It is no surprise there is the high level of construction going on and pricing (as well as returns) have increased significantly. Historically, the demand has been from our traditional trading partners – The US and Western Europe. However increasingly there is a lot more demand from other African countries – Nigeria in particular as well as the Middle East and Eastern Europe.” Kevin Dadzie, the Group Head of the CH Group of Companies in Ghana also believes that he has seen changes domestically “as investors in the Middle-East and Russia are now comfortable with Ghana and are investing and expanding their operations in the country both on the commercial and residential real estate side, and this can only be good for Ghana.”

It is clear that both international companies and local companies in Ghana support the view that there has not only been a change in the perspective of international real estate investors. The profile of international real estate investors has also changed with an influx of Russia, Ukraine and the Middle-East investors seeking opportunities. Some of my real estate clients at Aspen Morris Solicitors have revised their business plans with Ghana being seen as the gateway to breaking into the lucrative West African market.

The high demand for housing and prime office space and the potential returns and political stability coupled with the discovery of oil has fuelled their appetite even further. It appears that the change of perspective is here to stay and the more investment coming into the country can only be beneficial for Ghana and its people.

By Peter Petrou, Aspen Morris Solicitors (Managing Partner) & Lawyer at FEOD Group


Ventures Africa


January 21, 2015


Processes Involved in Title Registration

Step 1

Applicant obtains appropriate registration forms from the Land Title Registry, completes and submits them to the Registry together with copies of all relevant documents and the required registration fees.

Step 2

Upon submission of application an applicant is issued with:

(i) A receipt of acknowledgment (“yellow card”) and

(ii) A letter of request addressed to the Survey Department for the preparation of parcel plans.

Step 3

Applicant pays for and collects parcel plans from the Survey Department whenever they are ready and submits same to the Land Title Registry to assist in the processing of their application.

Step 4

From the Land Title Registry applicant is issued a photocopy of the parcel plan together with a Request Form to be sent to the Lands Commission for a search report

Step 5

Upon receipt of the search report by the Land Title Registry, and satisfying itself that there are no objections or adverse findings in the report, the Registry then proceeds to publish the application in the dailies to notify the general public of such application.

Step 6

Counting from the date of publication, fourteen days notice is allowed to receive objections from interested parties who may wish to challenge the application. If no objections are received within the fourteen day period the Registry then continues with the process of registration.

Step 7

The Land Title Registry prints and sign certificates, records particular on sectional plan and notify applicants of completion of registration exercise. The Land Title certificates are finally issued out to applicants upon submission of their “yellow cards”.

By Rebecca Sittie

Barifec Estate

African real estate market is expected to boom

A number of geopolitical risks have caused instability of the world economic growth and made investors look for where to invest money safely and profitably. The real estate sector is one of the few which have not lost their credibility among investors. The most forward-thinking investors are paying more and more attention to the African continent, where the retail and residential property market is growing dynamically, surpassing all expectations of its popularity among specialists.
China has recently become the world’s major exporter of capital and thus gave a boost to diversification of global investment strategies into property. According to the Financial Times, the outgoing direct investments of China exceeded the internal ones in 2014. As shown in a recent report of CBRE, the top global real estate advisory firm, Chinese investments into international commercial real estate property totaled $ 40 billion last year exceeding the numbers of 2013 ($ 32.5 billion) by 23 %.
Mark Giuffrida, CBRE’s Executive Director, Global Capital Markets (Asia), commented on the global real estate market situation: “Last year was very important for the sphere of international property investment: we observed accelerated implementation of capital due to stimulation by a combination of structural and cyclical factors occurred when new capital entered the market. According to our estimates, this key trend will continue in 2015. We already observed the Chinese and Taiwanese insurers starting to operate more actively in international real estate markets in the second half of 2014”.
Africa has been the China’s largest investment site for the past few years. China has invested into more than two thousand African projects so far, including agriculture, infrastructure facilities, manufacturing sector and logistics.
Inflow of foreign investments, a significant share of which belongs to China, has played a crucial role in the dynamic economic development of African countries. According to the Financial Times citing a joint report of the African Development Bank (ADB), the United Nations (UN) and the Organization for Economic Cooperation and Development (OECD), the inflow of foreign investments into African economy was $ 84.3 billion in 2014, which set a record in its history. African economy grew by 4.8 % in 2014 against 3.9 % rise of the previous year. The projected acceleration of growth for this year is up to 5–6 %, the same as during the pre-crisis period.
Experts say that African real estate market is going to develop rapidly in the short run. Moreover, the legislators across the continent have focused on the development of extremely transparent laws for the protection of property rights in order to make the growing cities in Africa meet the international interests and their own ambitions. In the opinion of James Roberts, the Director of Knight Frank (the research department for real estate markets), the commercial property market will take leading positions: “The volume of investments in world office real estate was $ 202 billion in 2009, and we expect it to grow to $ 606 billion in 2015. As part of this global trend of rapid progress, office markets of developing African countries will also be dynamically expanding in terms of investment activity, among which are particularly noteworthy Kenya (particularly Nairobi), Botswana, South Africa and Nigeria. Cape Town, Johannesburg, Lagos and Dakar, as well as Dubai, which caters to the growing African investment flow of capital, are strategic hubs of the continent”.

Great prospects for the development of commercial real estate market are expected in sub-Saharan Africa. Due to rapid urbanization there is a rising demand for modern structure real estate and commercial real estate of high class (Class “A”), which the region is sorely lacking. According to The Globe and Mail portal, it is projected that investments in shopping centers, office buildings and industrial complexes of these countries benefit at least 20 % per annum of net income. That is what attracts the global investors expecting large income in the long run.
The ultra-high income has already attracted a number of foreign companies involved in the construction and subsequent management of property. Oleg Yantovsky, the head of the Russian branch of Hermes-Sojitz, an international investment foundation, and a member of Hermes-Sojitz’s Board of Directors, confirms the profitability of the real estate development business in Africa: “The realities of the African real estate market significantly differ from the real estate markets of the developed countries. However, this fact is rather an advantage than a disadvantage. The rate of return on investment is higher indeed in emerging markets. It is essential that the risks accompanying any development project on construction of commercial and residential real estate property are much higher. Nevertheless, it is possible to minimize them by choosing a consistent approach”.
Hermes-Sojitz international foundation is an investor of the construction of 65-storey skyscraper and several shopping centers with over 100 thousand sq. m. space each in West Africa. The total investment volume of the projects implementation in Africa is $ 3 billion until 2017. In addition to Hermes-Sojitz, there are some other corporations investing in the African development business. Momentum Global Investment Management fund launches a $ 250 million project on construction of shopping centers and office buildings in countries such as Mozambique and Rwanda. Actis company has already invested $ 500 million in real estate markets of Nigeria, Zambia and Mozambique and expects high profits.
Investment fund managers confirm that the income and purchasing power of the people of Africa are growing, and migration to the cities is a continuous process, which fuels the demand for real estate. “The growing middle class need to meet, communicate and spend their free time in shopping malls, restaurants and cafes, which are not inferior to European and American counterparts. This desire will become stronger,” said David Morley, the Head of the Real Estate Department of Actis, a private equity firm.
The massive influx of foreign capital had a positive impact on the transparency of commercial real estate market. The residential real estate market can also be considered as a profitable sector for investment. The anticipated profit ratio will be slightly lower though.
In order to attract local and foreign investors, authorities of some African countries make noticeable breaks in the tax policy of the housing sector. For example, the Nigerian government intends to reduce the percentage of mandatory registration fees on the purchase of residential properties from 16 % to 3 %.
Dynamic growth of the real estate value is observed in Dakar, the capital of Senegal, which is 250 % over the past few years, according to Global Property Guide portal, citing data from the National Statistical Agency of Senegal. Capital real estate market attracts investments of regional elites, because it is treated as a safe haven in turbulent West Africa. However, some foreign investors from Europe and America appeared at the local market in 2014, counting on a solid income in the long run.

A double-digit growth in property prices in Dakar is being recorded for several years due a sharp increase in the population (mainly due to migrants from rural areas of Senegal and affluent segments of the population of the neighboring countries).
More than a half million residents of Dakar are tenants. Local rental charges were steadily increasing over the past two decades, and now are almost the same as in the largest cities in Europe. Property in the center of Dakar is almost twice as expensive as in the central business district of Abidjan, the commercial capital of Côte d’Ivoire, and many other capitals.
Some positive trends are observed in the real estate market in South Africa. After six years of stagnation the South African housing is rising in price, although the local economy is still reeling from the effects of the economic crisis. The number of foreign buyers is growing there again: they have invested $ 867 million in the country’s elite property during the first eleven months of 2014. The peaceful elections, stable political situation and depreciation of the local currency contributed to the return of foreign investors. The South African rand has fallen by a third since 2012, making local property more attractive.
“The steady increase in housing prices in 2014 allows to predict a positive trend in 2015. The expected price increase will reach 7.5 %, and inflation-adjusted 2 %,” describes ABSA report.
The findings of the Baseline Profitability Index from the investment of money in real estate ranking in 2014 also confirmed that African countries are eligible for investment. The ranking took into account factors such as the protection of investors, changes in exchange rates, the corruption situation in the country, political consistency, the average level of profit and other niceties.
The young diamond Republic of Botswana was at the top of the ranking. The African countries such as Senegal, Ghana and Rwanda entered the top ten ranking list, while European countries were the twentieth.
To sum up, international experts are unanimous in their forecasts regarding the prospects of the real estate market in Africa. This is caused not only by a high return of the capital employed in this sector, but also by minimized risks associated with doing business in Africa.