After the difficult period of the pandemic year, which saw it contract for two consecutive quarters, Ghana’s real estate sector has come out strongly. It has even surpassed the information and communications sector, becoming the new driver of economic growth in the last quarter of 2020.
Surprise growth of the real estate sector by the end of 2020
Data published by the Ghana Statistical Service (GSS) has shown that the real estate sector surprisingly grew past all sectors of the economy in the final quarter of 2020, recording 43.5% growth, emerging firmly from the -6.6 percent and -23.1 percent it recorded in the third and second quarters respectively.
Prior to this development, it was the information and communication sector which had been reigning as the driver of the economy for some time now. For example, in the second and third quarters of 2020, it grew by 23.2% and 32.6% respectively, further cementing its position as the new driver of economic growth, especially when the pandemic encouraged and forced many activities to go virtual.
However, the sector’s performance saw a dip in the third quarter as it recorded 22.5% and rather worked in the advantage of the real estate sector which saw almost double growth at 43.5% in the same period.
New strategies to revitalize the real estate industry
A real estate consultant, Kwame Obeng Adjinah, in an interview with local media B&FT, attributed the boom in the sector within the period to new players in the market that have departed from the traditional approach of building large and expensive properties to building smaller units and rental apartments that satisfy the middle class.
“Currently we have the real estate market flooded with micro to small scale developers. These are not very big players. They do few units or properties and sell, unlike the big players. There is also another segment that has become very popular these days and they do a lot of apartment complexes and rent it out and it is currently booming. There is also the aspect of land acquisition and sales, and people are doing a lot of service plot sales,” he said in an interview with the B&FT.
Asked why this development is coming at a time when people rather expected the real estate sector to see reduced activity, Mr. Adjinah said the pandemic impact on usually preferred sectors for investors could have influenced this, as some started diverting their investments into real estate given it is less risky. Again, he said, people abroad also started coming home and that increased demand for housing.
“When COVID came, a lot of the sectors started going down and the real estate sector is one of the safest to invest in. So many people who formerly would have invested in stocks or some shares of a company, started putting their monies into real estate.
Reasons for Ghana’s real estate sector boom
People abroad also started coming home and when they came, it increased demand for housing. The only sector that is suffering now is commercial real estate and that’s because of the working from home issue. So if you go to many office complexes, there are vacant spaces up for rent. But when it comes to housing, if people are not working from the office, they will definitely work from home,” he said.
Asked whether he thinks the growth of the sector is just serendipitous or something that can be sustained in the future, Mr. Adjinah was positive that the growth would continue.
“In the short to medium term, I expect things to be much better in the sector especially now that the government has introduced the National Housing and Mortgage Fund which is to complement housing acquisition. Ghana continues to experience a serious housing deficit and so now that investors have realised the sector is as booming as any other sector and even gives more mark-up and has little risk, I expect things to continue to rise,” he said.
As a major player in Ghana’s real estate sector, Green Views is committed to providing its clients with ultramodern units that meet the needs of the middle to high class.