Why more investment is not making housing affordable in Ghana

Accra, Ghana – Ghana needs more than 1.8 million additional housing units, but attracting investment to build them is only half the challenge. For millions of people, the deeper problem is that the homes reaching the market remain beyond their means.

That tension ran through the Africa Real Estate Conference & Expo (ARCE), which brought developers, policymakers, investors and technology entrepreneurs to Accra this week. While participants presented plans to expand construction, improve housing finance and deploy new technologies, their discussions pointed to a stubborn question: how can Ghana make housing commercially viable for developers without pricing out the people who need it?

The stakes are considerable. Some 56.7 percent of Ghana’s population lives in urban areas, yet only about 5 percent of Ghanaians can afford housing without state support. The gap between housing need and effective purchasing power continues to shape the market, limiting the reach of both private developers and conventional mortgage lenders.

The government has introduced measures intended to reduce borrowing costs and stimulate construction. The National Homeownership Fund has lowered mortgage rates to 8.4 percent, from 13.5 percent, while a revolving fund of three billion Ghanaian cedis (about $256m) targets public sector workers with repayment periods of 15 to 20 years.

Authorities are also seeking to revive the stalled Saglemi Housing Project, targeting the first 700 units for March 2027, and have announced plans for a 200-acre Green City Project at Dedesua.

At the National Conference on Housing Finance earlier this month, President John Dramani Mahama announced an allocation of one billion Ghanaian cedis (about $85m) in the 2027 budget for the National Housing Fund. He also highlighted the difficulties informal-sector workers face in accessing mortgages, despite earning regular incomes, because they often lack 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 said, urging banks to develop alternative ways of assessing borrowers.

Housing Minister Ahmed Ibrahim, who represented the president at ARCE, also called for greater private-sector participation in affordable housing and mortgage finance.

These interventions address important barriers, but their impact will depend on whether financing reaches the households most in need and whether developers can build at prices those households can sustain. Lower interest rates cannot compensate indefinitely for expensive land, infrastructure and construction.

About 90 percent of Ghana’s housing is built through personal savings and incremental construction, while mortgage penetration stands at just 0.3 percent of gross domestic product (GDP). The figures point to a market in which most households must finance construction themselves, often over many years, rather than buy completed homes through conventional mortgages.

Bako Ambianda, CEO of Backbone Capital Ventures and an ARCE keynote speaker, said the central problem was not a lack of demand but the difficulty of turning that demand into viable housing projects.

“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), identified access to finance and secure land as two of the biggest obstacles facing developers.

Although borrowing costs have fallen from around 30 percent to between 9 and 15 percent, depending on the bank, finance remains expensive. Land can be equally difficult to secure, with ownership complications and inadequate infrastructure adding uncertainty and expense.

“Our land tenure system, you know the problems we have. It has always been a challenge for people to get secured land,” Amegayibor said.

Even after acquiring land, developers may have to extend electricity and water connections and construct access roads before building can begin. Those costs are eventually reflected in selling prices.

Materials create another pressure. Amegayibor estimated that about 70 percent of housing inputs are imported, leaving developers exposed to import costs and taxes.

“Apart from sand, gravel and water, most of the things are import-based,” he said.

He argued that expanding local production could reduce reliance on imports while creating investment opportunities across the construction supply chain.

“That deficit is a business opportunity for both the supply side and the demand side,” he said, encouraging investors to establish domestic manufacturing capacity.

The difficulty is ensuring that lower production costs translate into lower house prices rather than simply improving developers’ margins.

For tenants, the financial barrier often comes before monthly rent begins. Although Ghana’s Rent Act of 1963 limits advance rent to six months, landlords routinely demand one to two years up front, forcing tenants to find large sums before securing accommodation.

Government enforcement measures reportedly introduced in April 2026 carry penalties of up to 3,000 Ghanaian cedis (about $257) or six months’ imprisonment. The FirstKey app is intended to help identify non-compliant landlords and verify listings. Under the proposed Easy Rent programme, the National Housing Fund would pay rent advances directly to landlords, with workers repaying the amount monthly.

Such measures could ease the immediate burden, but they do not address the underlying shortage of homes within reach of ordinary earners. About 70 percent of Ghanaians fall within the low- and middle-income bracket, yet much housing development continues to target higher earners.

The challenge, therefore, is not simply to increase supply, but to align that supply with what households can afford to buy or rent.

At ARCE, 30 PropTech startups presented tools intended to improve building performance, reduce operating costs and modernise property management. Their innovations offer potential savings, but their contribution to affordability depends on up-front costs, adoption and whether benefits reach households rather than only property owners and developers.

Isaac Ayitey Chris-Quaye, co-founder of NeuraHomes, said smart-home systems can help residents monitor energy use, improve security and make better-informed decisions. His company allows homeowners to introduce features gradually instead of paying for a complete system up front.

“Traditional homes seem affordable or cheap,” he said. “Cheap because you end up paying the price for it in the future.”

Chris-Quaye cited one case in which property managers reduced energy costs by 20 percent annually, with the system paying for itself within four years. The result illustrates the potential to reduce operating expenses, although actual savings depend on installation costs and energy consumption.

“A smart home is not a luxury,” he told Al Jazeera. “It’s human dignity.”

William Atitso Amankwah, founder of AWA Roofing Sheets, is addressing energy use through a Cool Roof coating that reflects up to 60 percent of sunlight. He estimates that it can lower indoor temperatures by 2-5 degrees Celsius (3.6-9 degrees Fahrenheit) and reduce cooling-energy consumption by 11 to 27 percent.

For a typical Greater Accra household, he estimates annual savings of 330–810 cedis (about $28–69). The coating adds an estimated 120–500 cedis (about $10–43) to the price of a pack of 20 roofing sheets. Whether the investment pays off quickly depends on energy use, installation costs, and electricity tariffs.

Alternative construction methods may also help reduce costs. Acheampong Builderman, managing partner of Builderman Estates, has developed homes using sandbags and recycled materials but is seeking partners and funding to expand the approach.

“People were interested, but they wanted you to fund everything,” he told Al Jazeera.

The examples demonstrate how technology and alternative materials could improve efficiency or lower some costs. But neither digital tools nor energy-saving products can independently resolve insecure land titles, inadequate infrastructure or expensive development finance.

As Ambianda warned, “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.”

For Ambianda, the solution also requires rethinking how households qualify for housing finance. Conventional mortgages often fail to accommodate informal-sector workers whose incomes arrive daily or weekly rather than through regular salaries.

“We should stop assuming that the conventional mortgage is the only route to homeownership,” he said.

With borrowers’ consent, lenders could assess repayment capacity using transaction histories, savings behaviour, mobile-money activity and rental-payment records. Such approaches could bring more households into the formal financing system, provided that affordability, data privacy and responsible lending remain priorities.

Land policy also needs attention. Ambianda called on governments to make secure, serviced land available through transparent and predictable processes. The Ghana Real Estate Developers Association (GREDA) has proposed a National Housing Authority led by technocrats and insulated from political cycles, arguing that housing delivery requires consistent policy beyond individual governments’ terms.

For Ghana, the challenge is to connect investment with secure land, reliable infrastructure, lower construction costs and financing suited to household incomes. Government programmes, private capital and technological innovation can all contribute, but none is sufficient on its own. The measure of success will be whether they enable developers to deliver homes that ordinary Ghanaians can actually afford.

“Africa’s housing opportunity is immense, but the answer is not simply to attract more money,” Ambianda told Al Jazeera. “It is to make projects deliverable, financing accessible and homes genuinely attainable.”