Ghana's housing crisis persists despite increased investment

Ghana faces a significant housing deficit, requiring more than 1.8 million additional units, yet the influx of investment has not resolved the affordability crisis for millions of residents. This central tension dominated the recent Africa Real Estate Conference and Expo in Accra, where developers, policymakers, and investors gathered to discuss strategies for expanding construction and improving finance.

The urgency of the situation is highlighted by the fact that approximately 56.7 percent of the population lives in urban areas, while only about five percent can afford housing without state assistance. The gap between the need for shelter and the purchasing power of citizens continues to limit the effectiveness of both private development and traditional mortgage lending.

To address these barriers, the government has introduced several measures aimed at lowering borrowing costs and stimulating construction activity. The National Homeownership Fund has reduced mortgage rates from 13.5 percent to 8.4 percent. Additionally, a revolving fund of three billion Ghanaian cedis, roughly 256 million dollars, has been established to support public sector workers with repayment periods of 15 to 20 years.

President John Dramani Mahama announced an allocation of one billion cedis for the National Housing Fund in the 2027 budget during a conference earlier this month. He emphasized the need for banks to recognize the incomes of informal sector workers, who often lack standard banking records. Housing Minister Ahmed Ibrahim, who represented the president at the conference, also called for greater private sector involvement in affordable housing.

Industry leaders argue that the core issue is not a lack of demand but a mismatch between delivery costs, available financing, and household payment patterns. Bako Ambianda, CEO of Backbone Capital Ventures, noted that turning demand into viable projects remains difficult. He stated that the challenge lies in aligning the cost of building homes with the actual purchasing power of families.

Access to finance and secure land remain major obstacles for developers. Although borrowing costs have dropped from around 30 percent to between 9 and 15 percent, they remain high. Samuel Amegayibor of the Ghana Real Estate Developers Association pointed out that land tenure issues and the need to build infrastructure such as roads and utilities before construction begin add significant uncertainty and expense.

Material costs also pose a challenge, as approximately 70 percent of housing inputs are imported. Developers are exposed to import taxes and currency fluctuations, which are ultimately reflected in selling prices. Amegayibor suggested that expanding local production could reduce these costs and create new business opportunities within the construction supply chain.

The rental market illustrates the same affordability gap. Despite a 1963 law limiting advance rent to six months, landlords frequently demand one or two years of payment upfront. New enforcement measures introduced in April 2026 include penalties for non-compliance, and a proposed program aims to have the state pay rent advances directly to landlords while workers repay the amount monthly.

Technology offers potential solutions, with 30 PropTech startups presenting tools to improve building performance and reduce operating costs. Innovations such as smart home systems and energy-reflecting roof coatings can lower utility bills over time. However, experts warn that these technologies cannot independently solve deeper structural issues like insecure land titles or expensive capital.

Ultimately, the solution requires rethinking how households qualify for finance and ensuring that investment connects with secure land and reliable infrastructure. As Bako Ambianda noted, the goal is not simply to attract more money, but to make projects deliverable and homes genuinely attainable for ordinary Ghanaians.