Interview: Joseph Aidoo
How has the Covid-19 pandemic affected various segments of the real estate industry?
JOSEPH AIDOO: We initially saw property sales slow due to the uncertainty that the pandemic brought to people’s lives. Job security was not guaranteed and many couples were no longer sure that it was the right time to start a family, which translated to fewer residential sales. As the vaccine rollout progresses, we expect to see a rebound in the residential real estate market, especially as many people who have been working from home want more space and those who put their purchasing plans on hold want to act on their initial hopes of moving up the property ladder. The industrial real estate market behaved differently over the course of the pandemic: warehousing needs grew in tandem with e-commerce and there has been an increase in demand for storage space as a result. In contrast, the hospitality sector suffered a considerable decline in occupancy, and uptake of retail real estate fell significantly due to the sudden decrease in footfall. Many retail outlets were not able to weather the changes brought on by stay-at-home measures and social distancing.
Which new technologies are being implemented in the real estate and construction industries?
AIDOO: Many exciting new technologies are being brought to market and utilised in Ghana. Styrofoam-based technology, building technology systems and formwork techniques are a few. However, the most important change in the sector is related to the concept of property technology, or “proptech”. Proptech is improving all aspects of the industry: from building information modelling platforms, cost-estimation tools and modular construction tools – all of which aid planning, management and development – to blockchain and other digital marketing tools that help the buying, selling and renting of real estate assets. Proptech allows large amounts of information to be processed within a short timeframe, which can then be analysed by the end-user for making strategic decisions. This is used to guide development, increase construction accuracy, facilitate the efficient use of materials, enable effective pricing and provide easy access to customers. As a result, real estate developers can get a broader view of the market to inform their decision-making.
What considerations are there when constructing affordable housing in Ghana?
AIDOO: One of the requirements to get a permit for development is to ensure there is no objection from the local community and neighbours. Constructing affordable housing often facilitates approval, as it is for the benefit of local residents. A key limiting factor in Ghana is that applicants for mortgages are only allowed to put 30% of their household income towards their mortgage; however, average household income is steadily increasing. Ghanaian incomes are still not comparable to international incomes, so there is a constant dialogue between communities, the authorities and developers to ensure the design and deployment of units that are affordable for the local population, while also meeting their needs and desired quality of life.
Where should efforts be focused to boost the competitiveness of locally made building materials?
AIDOO: One of the biggest barriers to making locally produced materials competitive is the cost of power. If regulators could drive the cost of electricity down, doing so would lower the cost to produce construction essentials, as well as the cost of operations overall. Mandating the use of locally produced inputs as opposed to imported products would also be beneficial: by doing so the volume of locally produced materials would increase and prices would eventually fall due to economies of scale. Lastly, the private sector must invest more in research and development to better utilise Ghana’s resources and facilitate the move towards a more competitive and localised construction industry.