This post on the real estate implications of coronavirus in Ghana originally appeared on Traverse on March 29, 2020. It was penned by Kwame Kankam Adom, a real estate consultant. This post has been slightly edited for clarity, grammar and context.


The COVID-19 pandemic has caused a global halt on all aspect of economic activities. Though, certain activities such as stock exchange trading, education and construction could wait for the virus spread to calm down; the basic things such as shelter, food and water must continue to be available for human sustenance.

The Covid-19 has shown some serious impact on the global real estate market and the Ghanaian market is no exception.  A look into the property rental market in Ghana has shown lots of transactions from the beginning of the year 2020 (according to market data analytics.)  

Globally, there is a pullback by buyers, which will eventually reduce the momentum in the real estate market, resulting in price falls.  In the Ghanaian context, the real estate market seems to be one of the few, where the principle of demand and supply does not work in some scenarios. For instance, property rental values are hardly reduced by the property owners and some properties can remain on the market for years without letting.

The Rental Perspective: Could Ghana’s real estate market be hit by the Covid-19 pandemic causing price drop?

The rental market in Ghana can be segregated into two main segments: the “dollar market” and the “cedi market”. Property owners in the cedi market insist on one or two-year payment in advance, which is not a practice in the European market. Nevertheless, the main reason why property owners insist on one or two years’ rent in advance hovers around the tendency of people defaulting in payment and the depreciation of the cedi.  

With the emergence of COVID-19, countries around the world have issued statements making it a criminal offence for any property owner to demand rent for the next three months. Certainly, it is time for Ghana to take a critical look at how the Rent Act can be enforced. The states’ ability to enforce the Rent Act will be a great economic relief on Ghanaians.

The “cedi rental market”, seems not to have suffered major liquidity challenges concerning rent payment since property owners have taken their rent in advance which is unlike the European markets. Currently, there may not be an immediate effect of COVID-19 on the cedi property market as the majority of them have taken rent in advance from tenants.

Meanwhile in the “dollar rental market”, there are many factors that might affect the flow of business, as property owners accept a refundable security deposit and rental payments monthly. Property owners may have to give their tenants some moratorium on rent payments.

Most tenants in this category are expatriates and due to the global pandemic, there has been a shutdown of most corporate headquarters which may cause a delay in expatriate’s rental payments. Property owners in these segments may need to make some concessions for their tenants, similar to the European markets. 

The dollar property market is bound to see a decreasing trend with respect to rentals due to the closure of Ghana’s airports and travel restrictions worldwide.  In a nutshell, the rental market including hotels and Airbnb will be hit hard thanks to the spread of the virus.  

Is this a good time to buy a property?

coronavirus home selling
Image via Realtor.com

In these current circumstances, buyers who are in very secure jobs are actually in a strategic position to purchase a property because of the gradual market decline. COVID-19 will reduce the buyer segments to those who are in good financial standing. People who are also looking to buy houses on a mortgage will stand the risk of being affected, though policy rate has dropped it may not reflect in mortgage rates.  

I am looking to Sell. What do I need to know?

If you are a seller, you need to appreciate that things are going to be weaker. However, sellers who have the flexibility to accept the prevailing market value could cut their losses and break even. In addition, individuals who are likely to default their mortgage payment would prefer to sell. It will be prudent for them to liquidate their property, pay off their mortgage instead of waiting for foreclosure of their properties.

I am a property investor. What do I need to know?

The real estate market has been sluggish since 2008, and it is getting more difficult for the investor. For instance, apartments are oversupplied at the moment and there has been some downward pressure on rents. Investors can benefit from the decline of the dollar, but that benefit is offset by declining market rent. The turnover will decline but there will still be new upcoming development into the market.

How will the Coronavirus cause further risk in the property market?

The weakness that COVID-19 is worsening in the economy will intensify the downward pressure on rent on the “dollar” in the short term and that’s something investors need to consider.

Many expats have left and many more are likely to leave for their home countries in the face of the pandemic. Many more are likely to leave to their home country when COVID-19 declines. If prices drop, investors could be in a better position to buy (to create or add to an existing property portfolio) but that weakness in rents is a real factor and is unlikely to go away in the short run, as the supply of houses, apartments, townhouses, condos, etc continues to rise steadily.

Conclusion: The Year 2020 in Real Estate in Ghana

2020 will, in many ways, be a hard year for the real estate market in Ghana and the world at large.  Talks of a recession are on the horizon. Most aspects of the economy will suffer. This includes the real estate sector, which is a major factor of production.

While large corporations may not lay off a lot of people, a lot of SMEs are likely to face the prospects of low to no revenue after the COVID-19 pandemic.

The financial capacity of small and medium-sized businesses will be harshly affected. Most businesses occupying rental facilities, such as restaurants and retail outlets may have no option but to reduce staff or close down for now. This will have a direct correlation on the real estate market not only the residential sector but all complementary businesses as well.  

I'm Kadi Tay and I write about different things, real estate is one of them. The plan is to make real estate info fun by kicking out Mr. corporate stiff. So don't be surprised if you see a Kwesi Arthur reference somewhere. I promise it'll make sense. When I'm not working magic here, you'll find me talking geek stuff in Africa, travelling with my buds, or doing random things.

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