Ghana’s emerging real estate sector contributes significantly to the development of the economy as far as housing is concerned. The government has helped to establish the Ghana Real Estate Developers Association as an initiative for public and private sector participation in housing investment and delivery. The association was formally inaugurated on October 28, 1998 under the laws of the country as a private company limited by guarantee.


The real estate sector in Ghana is changing in response to developments in the nation’s political economy. Monitoring has become a critical instrument for ensuring the survival and efficient operation of firms. Government intervention is required to create a conducive environment for the effective flow of cash for operators. In 1990 the government established the Home Finance Company (HFC) with the objective to provide services and raise funds for real estate finance. HFC provides funding to prospective home owners, but does not fund the operations of corporate real estate developers. Since the collapse of the Bank for Housing and Construction, which aimed to develop formal debt finance systems for the sector in the mid-1990s, Ghana has not had a special construction bank to ease the financial constraints affecting the sector. According to the Centre for Affordable Housing Finance in Africa, increasing public debt, totalling GHS97.2bn ($25.2bn) as of December 2015, slowing economic growth, increasing inflation, high interest rates and a depreciating cedi have affected the housing finance sector.

Real estate investment trusts (REITs) in Ghana began with collective investment schemes, which are governed by Securities Industry (Amendment) Law 2000 (Act 590) and regulated by the Securities and Exchange Commission (SEC). Collective investment schemes can be mutual funds or unit trusts. HFC REIT was launched by HFC in 1995, the same year it was approved by the Bank of Ghana, acting for the SEC. slowdown: The real estate market boom from 2007 onwards due to oil production and a fast-growing economy has slowed down gradually as a result of a recent decline in the expansion of the economy. The factors that contributed to this situation are deteriorating economic fundamentals buoyed by rising inflation, high interest rates together with reduction in disposable incomes, the impact of energy issues, and more importantly, a weakened global economic environment. The latter saw total remittances – a significant source of investor funds for the real estate sector to Ghana – drop to $1.92bn for 2015. In that year the sector was characterised by the availability of the supply of space on the residential front. With cost structures reflected during the boom periods affecting the competitiveness of available space, it is not addressing existing demand levels.

The real estate sector continued to record high rental prices in 2015. It also witnessed prime retail space averaging $42 per sq metre per month, and it appeared to be on the rise throughout the year. In view of the above, the sector needs huge investment.

HFC REIT’s assets grew by 19.75% in 2015 to GHS45.1m ($11.6m), up from GHS37.7m ($9.7m) in 2014, due to continued patronage of the REIT and impressive investment returns. In 2015 the REIT returned a 24.3% yield to investors, which was significantly above the inflation rate of 17.5% at the end of year. Moreover, the number of unit holders in the fund increased from 4833 in 2014 to 5575 in 2015.

The outlook for REITs remains bright in the near to long term despite the economic challenges currently affecting Ghana’s economy. The risk of an increase in inflation is expected to be a major issue in 2016, since it has an unfavourable effect on the activities of the real estate sector, while high interest rates are also seen as detrimental for the sector. It is expected that investors will continue to invest in REITs in order to diversify holdings as well as to hedge against inflation.