Ghana’s real estate market is one of the most lucrative in Africa, with a growing demand for housing and commercial properties. The average ROI for real estate in Ghana stands around 20%-25%. Those are impressive numbers that would make any investor happy. As real estate developers, we understand the importance of identifying the best real estate investments in Ghana for potential investors. In this article, we will highlight some of the key factors that investors should look out for when considering real estate investments in Ghana.
Signum Development – The Mark Of Excellence In Ghanaian Real Estate
Ghana has a housing deficit of about 1.8 million, which means there is a high demand for buildings in Ghana. Given the growing demand for housing and commercial properties, Ghana’s real estate market presents a tremendous opportunity for investors. At Signum Development, we are committed to helping investors identify the best real estate investments in Ghana through our strategically located properties in Accra.
In this article, we will provide a comprehensive guide to help investors navigate the Ghanaian real estate market successfully. Signum Development has been in operation for over 20 years. We have watched the Ghanaian Real Estate market rise over the years and this has influenced most of our real estate developments. We will highlight some of the key factors that real estate investors should consider when evaluating potential real estate investments in Ghana.
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The Location of the Property
One of the most important factors to consider when investing in real estate is the location. In Ghana, prime locations such as Accra, Kumasi, and Takoradi are highly sought after due to their growing population and economic activities.
Let’s face it, Accra is the capital city of Ghana with a leading population of 5.4m and serves as the core of the country’s business activities. With prime areas such as Airport Residential, Cantonments, East Legon, Tse Addo, Ridge and East Legon Hills, there are many choices to be made when it comes to buying property in Accra. These regions tend to experience high demands for services and goods; high demand means an appreciation in the pricing of real estate.
However, there are also many upcoming neighbourhoods such as Oyarifa, East Legon Hills, Dawhenya, Prampram, Oyibi and many more that are appreciating at over 15% annually. This gives investors a good opportunity to take advantage of a growing market.
According to the Ghanaian real estate market report; the majority of real estate transactions in the Ghanaian market are concentrated in Accra and Kumasi. This should be a target for all who are looking to invest in Ghanaian real estate. Properties located in close proximity to amenities such as schools, hospitals, shopping centres, and transportation hubs tend to have higher demand and appreciation potential. Investors should also consider the neighbourhood and surrounding areas to ensure that they are safe and attractive to potential tenants or buyers.
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Property Type
A factor to consider when investing in real estate is the property type. The Ghanaian real estate market offers a variety of property types, including residential, commercial, and mixed-use properties. Residential properties, such as apartments and houses, are typically in high demand, especially in urban areas with a growing population. Commercial properties, such as office buildings and retail spaces, can also offer lucrative investment opportunities, especially in prime locations with high foot traffic. Signum has residential properties in prime residential areas in Accra such as Tse Addo, Nungua, Oyarifa, Labone and more.
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Infrastructure
Another factor we cannot overlook when investing in Ghanaian real estate is infrastructure. Infrastructure is a crucial aspect that should be taken into consideration for numerous reasons, some including the fact that properties located in areas with good road networks, reliable water, and power supply, and access to other basic amenities tend to have higher demand and appreciation potential not because of anything extraordinary but simply because they enhance the quality of life of the residents and hence increase in rental income.
Investors should also consider the closeness to any of the major roads in Accra, as this can affect the attractiveness of a property to potential tenants or buyers.
Development Stage
Investors should also take into account the development stage of the property. Investments made during the off-plan phase, where investors provide funding for property construction, can potentially yield higher returns but come with elevated risks.
Completed properties, on the other hand, offer a lower risk profile but may have lower potential returns. Investors should carefully evaluate the developer and the stage of the property and consider their risk appetite before making an investment decision. Working with a trusted developer who follows all the laid-down procedures required by law greatly reduces your risk as an investor. Signum Development has proven that it can be trusted with over 100 properties sold to happy customers in and from the diaspora of Ghana, you can rest assured that Signum Development will meet your specifications.
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Rental Yield and Appreciation Potential
Investors should evaluate the rental yield and potential for appreciation of a property prior to making an investment choice. The rental yield represents the annual rental income as a percentage of the property’s purchase price, while appreciation potential refers to the expected growth in the property’s value over time.
It is crucial for investors to consider both aspects, seeking properties with favourable rental yields and significant potential for appreciation. The rental yield and appreciation potential in Ghana are both attractive for investors.
Rental yields in Ghana are typically in the range of 8-12%, which is higher than many other countries in Africa. This is due to the high demand for rental housing in Ghana, which is driven by a growing population, a strong economy, and a lack of affordable housing.
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Regulations
Investors should also be aware of the regulations governing the real estate market in Ghana. The government has implemented various regulations aimed at protecting both investors and consumers, including the Real Estate Agency Law and the Ghana Building Code. Investors should ensure that they understand these regulations and work with reputable developers and real estate agents who comply with them.
Now You’re Ready For The Next Step
The Ghanaian real estate market offers a variety of investment opportunities. for investors. When contemplating investments in the Ghanaian real estate market, it is important for investors to take into account various factors such as the location, type of property, development stage, infrastructure, regulations, as well as rental yield and potential for appreciation.
By carefully evaluating these factors, investors can identify the best real estate investments in Ghana and maximize their returns while minimizing their risks. At Signum Development, we are committed to providing our clients with the best investment opportunities in the Ghanaian real estate market, and we invite you to contact us for more information on how we can help you achieve your investment goals.
15th December 2023
6:30pm
The Function Junction, Tse Addo
