Ghana Faces Housing Affordability Crisis Despite Investment

Ghana needs more than 1.8 million additional housing units, but attracting investment is only part of the challenge. For millions of people, the deeper issue is that available homes remain unaffordable.

At the Africa Real Estate Conference & Expo (ARCE), developers, policymakers, and entrepreneurs discussed ways to make housing commercially viable without excluding low-income residents.

About 56.7 percent of Ghana’s population lives in urban areas, yet only 5 percent can afford housing without state support. This gap limits the reach of private developers and mortgage lenders.

The government has introduced measures to reduce borrowing costs, including lowering mortgage rates to 8.4 percent and creating a revolving fund of three billion Ghanaian cedis. It also aims to revive the Saglemi Housing Project and launch a Green City Project.

President John Dramani Mahama announced a one billion Ghanaian cedis allocation for the National Housing Fund in the 2027 budget. He highlighted the challenges informal-sector workers face in accessing mortgages due to lack of formal financial records.

Housing Minister Ahmed Ibrahim called for greater private-sector involvement in affordable housing and mortgage finance. However, the success of these efforts depends on whether financing reaches the most vulnerable households and whether developers can build at sustainable prices.

About 90 percent of housing in Ghana is built through personal savings and incremental construction, with mortgage penetration at just 0.3 percent of GDP. Most households must finance homes themselves, often over many years.

Bako Ambianda, CEO of Backbone Capital Ventures, stated that the central problem is not a lack of demand but a mismatch between housing costs, financing availability, and household purchasing power. Samuel Amegayibor, GREDA executive director, identified access to finance and secure land as major obstacles for developers.

Developers face high costs for land, infrastructure, and imported materials. About 70 percent of housing inputs are imported, exposing developers to fluctuating import costs and taxes. Expanding local production could reduce reliance on imports and create investment opportunities.

Land tenure issues, inadequate infrastructure, and high development costs continue to hinder affordable housing. Even after acquiring land, developers must often extend utilities and construct access roads before building can begin, which increases selling prices.

For tenants, upfront rent payments often exceed six months, creating a financial barrier before securing housing. Government measures aim to enforce the Rent Act of 1963, but the underlying shortage of affordable homes persists.

Technology and alternative construction methods offer potential solutions, but they cannot resolve fundamental issues like insecure land titles, inadequate infrastructure, or expensive financing. Smart-home systems and energy-saving materials may reduce operating costs, but their impact on affordability is limited.

Ambianda emphasized the need to rethink housing finance to accommodate informal-sector workers. Lenders could assess repayment capacity using transaction histories, savings behavior, and rental-payment records. Secure, serviced land and consistent policy are also critical for long-term housing solutions.

Ghana’s challenge is to align investment with secure land, reliable infrastructure, and financing that matches household incomes. While government programs, private capital, and technology can contribute, none alone can solve the affordability crisis. The success of efforts will depend on whether they enable developers to deliver homes that ordinary Ghanaians can afford.