Real Estate Finance, Real Estate Investment Trust, Arbitrage Potential
THE HOUSING MARKET IN GHANA
PREPARED BY
RESEARCH DEPARTMENT
BANK OF GHANA
NOVEMBER 2007
The Sector Study reports are prepared by the Research Department of
Bank of Ghana for the deliberations of the Bank’s Board of Directors.
The reports are subsequently made available as public information.
Further information may be obtained from:
The Head
Research Department
Bank of Ghana
P. O. Box GP 2674
Accra, Ghana.
Tel: 233-21-666902-8
ISBN: 0855-658X
Table of Contents
1. INTRODUCTION 1
2. REVIEW OF LITERATURE 5
2.1 Macroeconomics and Housing 5
3. THE STATE OF THE HOUSING MARKET 10
3.1 Housing Characteristics 10
3.2 Population Distribution and Housing Stock 11
3.3 Mortgage or Build 17
4. A MODEL MORTGAGE MARKET 22
4.1 Mortgage Market Development in Ghana 23
4.2 Mortgage Financing in Ghana 25
4.3 Factors affecting the Development of a
Vibrant Mortgage Market 29
5. SURVEY OF HOUSE PROVIDERS AND
MORTGAGE PROVIDERS 32
5.1 The Operational Background of Respondents 32
5.2 The Price Structure of Housing Units 34
5.3 Effects of External Macroeconomic Factors on Housing Market 36
5.4 Challenges Facing the Real Estate Market 38
5.4.1 Source of Financing 38
5.4.2 Structural Rigidities and Prices of Inputs 39
5.5 Some Key Recommendations by Real Estate
Developers and Mortgage Financiers on the
Challenges facing the Housing Sector. 40
6. CONCLUSION AND POLICY RECOMMENDATIONS 41
THE HOUSING MARKET IN GHANA
1. Introduction
Contrary to the apparent neglect in mainstream macroeconomic analyses in the past, the housing market has become important and strategic to policy makers in recent times due to its impact on output fluctuations and inflation. Generally, activities in the housing industry may affect the well being of a people in terms of size and composition of household wealth, accessibility to credit, labour productivity, employment and other macroeconomic variables.
When house prices rise, the expectation of further appreciation
PREPARED BY
RESEARCH DEPARTMENT
BANK OF GHANA
NOVEMBER 2007
The Sector Study reports are prepared by the Research Department of
Bank of Ghana for the deliberations of the Bank’s Board of Directors.
The reports are subsequently made available as public information.
Further information may be obtained from:
The Head
Research Department
Bank of Ghana
P. O. Box GP 2674
Accra, Ghana.
Tel: 233-21-666902-8
ISBN: 0855-658X
Table of Contents
1. INTRODUCTION 1
2. REVIEW OF LITERATURE 5
2.1 Macroeconomics and Housing 5
3. THE STATE OF THE HOUSING MARKET 10
3.1 Housing Characteristics 10
3.2 Population Distribution and Housing Stock 11
3.3 Mortgage or Build 17
4. A MODEL MORTGAGE MARKET 22
4.1 Mortgage Market Development in Ghana 23
4.2 Mortgage Financing in Ghana 25
4.3 Factors affecting the Development of a
Vibrant Mortgage Market 29
5. SURVEY OF HOUSE PROVIDERS AND
MORTGAGE PROVIDERS 32
5.1 The Operational Background of Respondents 32
5.2 The Price Structure of Housing Units 34
5.3 Effects of External Macroeconomic Factors on Housing Market 36
5.4 Challenges Facing the Real Estate Market 38
5.4.1 Source of Financing 38
5.4.2 Structural Rigidities and Prices of Inputs 39
5.5 Some Key Recommendations by Real Estate
Developers and Mortgage Financiers on the
Challenges facing the Housing Sector. 40
6. CONCLUSION AND POLICY RECOMMENDATIONS 41
THE HOUSING MARKET IN GHANA
1. Introduction
Contrary to the apparent neglect in mainstream macroeconomic analyses in the past, the housing market has become important and strategic to policy makers in recent times due to its impact on output fluctuations and inflation. Generally, activities in the housing industry may affect the well being of a people in terms of size and composition of household wealth, accessibility to credit, labour productivity, employment and other macroeconomic variables.
When house prices rise, the expectation of further appreciation