Ghana’s Real Estate Pricing: Fair or Flawed?

Magnificent 3-bedroom house in the heart of West Legon boasting a spacious master bedroom and 2 other rooms with adjourning bath. You’ll rush home to make dinner in the fully fitted kitchen with windows that overlook a plush backyard garden. The living room and dining area meet in an open space and both flaunt a gorgeous POP ceiling complete with recessed lighting. A back-up water reservoir promises flowing water year-round and the Police station is a short 5 minute walk away along the main road.

Wow! Sounds like a place you’d love to call home. You’re already imagining your neighbors and early morning runs down the boulevard. Now to click the “See Price” button so you can contact the real estate agent. Can’t be that bad. The road leading to the house is untarred with a network of crater-like potholes. There are no streetlights…yet? The shared bath has old school tubs. And though a lovely up-and-coming neighborhood, it’s still North of Tetteh Quarshie… (read: not the closest to Accra’s center and not traffic averse)

You want it. You can close your eyes to the imperfections. It’s likely priced low enough taking all these into consideration… So why are your palms sweaty? You’ve been holding your breathe and finally let it go as you reach to click the button. Can’t be more than GHS 300,000. CLICK! Staring at you, in red, bold, the listing agent has described the property’s selling price as “a cool $400,000”! No way…You check the url… perhaps somehow your hand slipped and tapped realtor.com, one of the many house hunting tabs you have open… Nope! You’re still on the Ghana real estate marketplace. Just shy of half a million dollars, plus a 5% commission to be paid to the estate agent; Oh, and a 50 cedi registration fee. Is this a joke? You’re upset because in one click your dreams are dashed.  Most properties with similar amenities cost about the same if not worse. Those reasonably priced, are on the outskirts of the city, are a condo unit, or have the most bare bones features and pitiable square footage.

What is going on in Ghana? Properties being sold and rented in dollars and what not. Whether what most will describe as ridiculous pricing for owning a property in Accra, is fair or not, is a bitter debate. The divide tends to be along those looking to buy/rent versus those who stand to make money through a sale or rental. The real estate agents tend to ride the middle line, some admitting that the price tags are a little preposterous while others solely operating on “the higher the price the sweeter my commissions” philosophy. Unlike in the West where agents are clearly representing the buyer or seller, too many in Ghana operate in the shady area of shellacking from both ends. Where ethics stands in the matter, one can only guess, because sadly there is no official national regulation on real estate pricing to held reign in the greedy.

There are indeed valid points to both sides about what real estate should cost in Ghana’s capital city. Around the world pricing is done based on some underlying factors that potential property buyers and tenants are fine with. Size of the home (square footage and number of rooms), location and property & community amenities are 3 such indicators that no one argues with. So perhaps not too many people in the middle-upper income bracket would be bothered to see a $200,000 3-bedroom home in central East Legon, close to Jungle Avenue which boasts a shopping center with a gym and kids play area; many eateries and beauty parlors. The raised eyebrows happen when this same price tag is affixed to a same sized home much further out in a less desirable neighborhood 10 minutes off a ridiculously bad road. How did this owner come up with this price? Pricing is supposed to be all about supply and demand; a mélange of science and art almost. It should also be apples to apples – if you are selling a home that your parents built 25 years ago, it cannot be same price as a new-build.

A conversation with such a seller may reveal claimed justifications like the quality of materials used to construct the home; the fact that many interior fixtures were shipped in from abroad…and even the land cost. And then there are the “me too” property sellers who simply come up with a price because they feel they deserve that and want what others get for their real estate sales. Many are so married to attaining these incomes that they are woefully unwilling to budge even at a great offer. Too many properties in Accra lay vacant for long stretches of months, even years, because the owner (selling or leasing) is unwilling to accept a lower rate. Technically Ghana’s should perpetually be a buyer’s / renter’s market considering how much supply outweighs demand but it seems to heavily be a seller’s market. The influx of very well-paid expatriates and even returnees are part of the cause. These groups have created a niche demand for what the average Ghanaian would consider “luxury” and yet are really nothing extraordinary. Builders in the past decade have rushed into putting up properties targeted at these people, shirking the need of the much larger middle class.

It appears the vast majority are rather frustrated by the property landscape in Accra, where many young adults are trying to live the dream of becoming homeowners in their 30’s or simply rent a nice place to call home. A Happy Hour talk about property that would get people in the West excited, turns into a rather discomforting argument in Ghana. Even those who can afford, feel stinted by the system, recognizing that in most cases the value-for-money is quite minimal. Somehow someone always quiets the storm with the remark that it’s a free world and economy and one is entitled to place whatever value they deem appropriate on their properties.

What are your thoughts?

Author :: Awoyaa Mensah