Challenges of Real Estate Development in Ghana from the Developers’ Perspective

Abstract

Shelter is one of the basic necessities for human beings nonetheless it remains a critical problem for millions of people. As at 2014, Ghana has an estimated population of 27 million, with a growth rate of about 2.2%. Ghana has an inevitable housing problem emanating from this rising population as the housing stock has not improved much over the years. Successive governments over the years have not played as much role as the private sector in housing delivery. Housing requirement by 2020 stands at 5.7 million new rooms. If these are to be successfully supplied, 3.8 new rooms must be completed in every minute of the working day for ten years. This paper sought to examine why the private real estate developing companies are unable to produce enough houses to meet the deficit and offers appropriate recommendations. The mixed method approach involving literature review, questionnaires and interviews were used for the study. Simple random sampling was used for questionnaire administration to 75 real estate developers. 50 representing 66.7% was realized. 15 key stakeholders in the real estate development industry including architects, quantity surveyors, and structural engineers were purposively selected for the questionnaire administration and also interviewed. Result of the outcome from the questionnaire survey and interviews were mapped and coded for the quantitative and qualitative analysis using basic statistical tools. Among the major problems identified were finance, acquisition of disputed land titles and persistent increase in prices of building raw materials. The study recommends an establishment of an extensive land information system to support the land administration project, institution of macro-economic programs (to combat rising inflation and interest rate and depreciation of the cedi) and financing  strategies (forward funding, corporate loans and lease- own arrangement) to boost the demand for houses of real estate developers.

Keywords: Real estate development, Developer, Finance, Land acquisition, Ghana