Ghana's Housing Crisis: Why Investment Alone Isn't Making Homes Affordable

Accra, Ghana – Ghana faces a significant housing deficit, needing over 1.8 million additional units. While attracting investment is crucial, the primary challenge lies in ensuring that the homes entering the market are actually affordable for the majority of the population. This tension was a central theme at the Africa Real Estate Conference & Expo (ARCE) in Accra, which convened developers, policymakers, investors, and technology entrepreneurs.

Despite discussions on expanding construction, improving housing finance, and adopting new technologies, a persistent question remained: how can Ghana make housing commercially viable for developers without excluding those who need it most? The urgency is underscored by the fact that 56.7 percent of Ghana’s population resides in urban areas, yet only about 5 percent can afford housing without state assistance. This significant gap between housing demand and purchasing power impacts both private developers and conventional mortgage providers.

The Ghanaian government has implemented measures to lower borrowing costs and boost construction. The National Homeownership Fund has reduced mortgage rates from 13.5 percent to 8.4 percent. Additionally, a three-billion Ghanaian cedi (approximately $256 million) revolving fund is available for public sector workers, offering repayment periods of 15 to 20 years. Efforts are also underway to revive the stalled Saglemi Housing Project, with the first 700 units targeted for completion by March 2027, and plans for a 200-acre Green City Project in Dedesua have been announced.

At the National Conference on Housing Finance, President John Dramani Mahama announced a one-billion Ghanaian cedi allocation in the 2027 budget for the National Housing Fund. He also acknowledged the difficulties faced by informal-sector workers in accessing mortgages, even with regular incomes, due to a lack of payslips and conventional banking records. "A system that cannot recognise these livelihoods excludes a substantial part of our nation from the opportunity to own a home," Mahama stated, urging banks to develop alternative borrower assessment methods. Housing Minister Ahmed Ibrahim echoed the call for increased private-sector involvement in affordable housing and mortgage finance.

While these interventions address key barriers, their effectiveness hinges on whether financing reaches the intended households and if developers can build at sustainable prices. High costs associated with land, infrastructure, and construction can negate the benefits of lower interest rates.

The root of the housing shortage is complex. Approximately 90 percent of housing in Ghana is constructed through personal savings and incremental building, with mortgage penetration at a mere 0.3 percent of GDP. This indicates a market where most individuals finance their homes over extended periods rather than relying on conventional mortgages for completed properties.

Bako Ambianda, CEO of Backbone Capital Ventures and a keynote speaker at ARCE, identified the core issue not as a lack of demand, but as a disconnect between the cost of delivery, available financing, and household purchasing power. "Africa’s housing challenge is not a lack of demand," he told Al Jazeera. "It is a mismatch between the cost of delivering homes, the financing available to build them, and the purchasing power and payment patterns of households."

Samuel Amegayibor, executive director of the Ghana Real Estate Developers Association (GREDA), highlighted access to finance and secure land tenure as major hurdles for developers. Despite a reduction in borrowing costs from around 30 percent to 9-15 percent, financing remains expensive. Land acquisition is also challenging due to ownership complexities and inadequate infrastructure, adding to uncertainty and costs.

"Our land tenure system, you know the problems we have. It has always been a challenge for people to get secured land," Amegayibor noted. Developers often bear the additional costs of extending utilities and constructing access roads, expenses that are ultimately passed on to homebuyers.

The cost of building materials further exacerbates the problem. Amegayibor estimates that around 70 percent of housing inputs are imported, making developers vulnerable to import duties and fluctuating exchange rates. "Apart from sand, gravel and water, most of the things are import-based," he said. He suggested that boosting local production could reduce import reliance and create investment opportunities within the construction supply chain, but cautioned that lower production costs must translate into lower house prices, not just increased developer profits.

The affordability gap is also evident in the rental market. Despite the Rent Act of 1963 limiting advance rent payments to six months, landlords frequently demand one to two years upfront. New government enforcement measures, reportedly introduced in April 2026, include penalties for non-compliance. The FirstKey app aims to identify non-compliant landlords, and the proposed Easy Rent program would have the National Housing Fund pay rent advances directly to landlords, with tenants repaying monthly. However, these measures address immediate financial burdens rather than the fundamental shortage of affordable housing.

With approximately 70 percent of Ghanaians falling into the low- and middle-income brackets, the continued focus on developing housing for higher earners remains a significant issue. The challenge, therefore, is not merely to increase supply but to align it with the financial capacities of households.

Technology offers potential solutions. At ARCE, 30 PropTech startups showcased innovations aimed at improving building performance, reducing operating costs, and modernizing property management. Isaac Ayitey Chris-Quaye, co-founder of NeuraHomes, explained that smart-home systems can help residents monitor energy use and enhance security. His company allows for gradual feature integration, mitigating high upfront costs. "Traditional homes seem affordable or cheap," he observed. "Cheap because you end up paying the price for it in the future." He cited instances where property managers achieved annual energy cost reductions of 20 percent, with systems paying for themselves within four years.

William Atitso Amankwah of AWA Roofing Sheets is addressing energy efficiency with a Cool Roof coating that reflects sunlight and can lower indoor temperatures, potentially reducing cooling energy consumption. While these technological advancements show promise, their impact on affordability depends on installation costs, adoption rates, and whether savings are passed on to consumers.

Alternative construction methods are also being explored. Acheampong Builderman of Builderman Estates has developed homes using sandbags and recycled materials but is seeking partners and funding for expansion. "People were interested, but they wanted you to fund everything," he recounted.

These examples highlight how technology and alternative materials can improve efficiency and reduce certain costs. However, as Bako Ambianda cautioned, digital tools or energy-saving products alone cannot resolve fundamental issues like insecure land titles, inadequate infrastructure, or expensive development finance. "A beautifully designed app will not make an overpriced plot affordable, provide a road or drainage system, lower the cost of capital by itself, or resolve an unclear title," he stated.

Reimagining housing finance is crucial. Ambianda advocates for alternative methods to assess borrowers' repayment capacity, especially for informal-sector workers. "We should stop assuming that the conventional mortgage is the only route to homeownership," he urged. Lenders could potentially use transaction histories, savings patterns, mobile-money activity, and rental payment records, with borrower consent, to evaluate eligibility, provided that affordability, data privacy, and responsible lending remain paramount.

Land policy reform is also essential. Ambianda called for governments to facilitate access to secure, serviced land through transparent processes. GREDA has proposed the establishment of a National Housing Authority, led by technocrats and insulated from political cycles, to ensure policy consistency.

Ultimately, Ghana's path to affordable housing requires integrating investment with secure land tenure, reliable infrastructure, reduced construction costs, and financing mechanisms tailored to household incomes. Government initiatives, private capital, and technological innovation are all vital components, but their success will be measured by their ability to deliver homes that ordinary Ghanaians can genuinely afford. "Africa’s housing opportunity is immense, but the answer is not simply to attract more money," Ambianda concluded. "It is to make projects deliverable, financing accessible and homes genuinely attainable."