Interview: John Entsuah
What factors account for the growth in real estate and the challenges regarding land acquisition?
JOHN ENTSUAH: The real estate sector’s growth is influenced by a combination of factors, and it is essential to address the challenges that hinder progress, particularly for middle-income earners. The aspirations of such individuals to own a home is driving sector growth, as this demographic seeks affordable and quality housing. In addition, urbanisation is a significant trend, with people from various regions moving to urban centres like Accra. This influx is driving demand, creating opportunities for developers. Ghana’s urban areas are expanding outwards, enabling real estate companies to build homes in areas with more affordable land and offer housing solutions that cater to the working person. As Ghana’s population continues to grow steadily, so does the fundamental need for more housing options.
The nature and extent of land acquisition has evolved in response to economic and environmental factors. The acquisition and registration of many lands is beset by various hurdles, including unlawful land encroachment and incomplete record-keeping practices. Digitalising, automating and streamlining land registration procedures, as well as efficient record keeping, are among the ways to address these challenges.
Which strategies provide a solid foundation for public-private partnerships to bridge the housing gap?
ENTSUAH: Ghana’s housing deficit is a critical issue that has seen improvement in recent decades. Resolving this challenge requires collaboration among government, private sector and financial institutions. The government’s role is to facilitate access to hassle-free affordable land for developers. Streamlining permit issuance and increasing transparency in government agencies are essential. Developers, for their part, must build the capacity to deliver quality housing, with financial institutions stepping in to offer mortgages at competitive rates, and implementing mortgage schemes that make home ownership accessible and affordable for the average Ghanaian. The key to success lies in the willingness of all parties to work together effectively.
In what ways do inflation, depreciation and exchange rate volatility affect the real estate sector?
ENTSUAH: Currency depreciation and exchange rate volatility have had a substantial impact on real estate companies. A significant portion of transactions are quoted in foreign currency due to their use of imported materials for fixtures and fittings, and other construction inputs. Companies that generate significant earnings in foreign exchange are insulated from fluctuations in the cedi since their payments for imports are made in foreign currency. However, transactions in the affordable housing market are primarily conducted in cedis, making their exposure more pronounced. Developers and the government must work to address this issue, as it affects the affordability and sustainability of housing.
In which markets could Ghana’s real estate sector look to attract further investment?
ENTSUAH: Developers, whether local or international, may consider exploring markets in Ghana and Africa due to the many untapped opportunities. Focusing on affordable housing segments could help introduce valuable products to the market that address the housing shortage. However, such an expansion or ramp-up in investment is influenced by factors such as due diligence, political stability, population growth, government support for developers and pent-up demand for housing. Regulatory and environmental conditions are also critical factors in assessing project viability.
Accurate data about Ghana’s housing and real estate markets should be the basis for making any such investment choices. When used effectively, data analytics can assist developers in identifying the ideal clients who, given their location, tastes and budget, are likely to be more interested in purchasing affordable housing units.
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