How The High Rate Of Inflation Affects The Cost of Housing in Ghana

• When a country experiences a significant rate of inflation, it affects the prices of everything, including housing
• The real estate sector suffered a major setback during the COVID-19 pandemic period but is gradually bouncing back post-COVID
• The current inflation that Ghana is experiencing has had an effect on the prices of homes, which makes it difficult for people to afford decent accommodation

The Ghana Statistical Service has revealed that the cost of housing, water, electricity, gas, and other fuels has increased by 28.7%. In comparison, transportation costs have increased by 17.4%, bringing the inflation rate, which began in January 2022, to 13.9 per cent.

Rising interest rates are one of the main causes of the rise in house prices in Ghana. When interest rates are low (not growing), it is more cost-effective to provide financing to homeowners, making homes more accessible for purchase.

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Historically, this has led to a rise in demand for mortgages. Unfortunately, fewer homeowners can afford to buy homes when interest rates climb.

Speaking to YEN.com.gh, the CEO of a property brokerage firm, Mr Ralph Odjerbio, added that:

Increasing labor expenses, rising property taxes, growing insurance prices, and a lack of inventory in many areas in the near future will all contribute to further accommodation price rise in 2022 and 2023, in my opinion.

Mr Ralph Odjerbio also touched on his experience in the rental sector. He asserted that:

Many landlords may need to increase the rent to keep up with rising living expenses. Landlords will see a decreased return on investment over time if rents are not adjusted to reflect the declining worth of money. Additionally, if the cost of a new building increases due to inflation, landlords will have to raise rents to make up the difference.

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Real Estate Trends in Ghana That will Shape the Industry for The Next 10 Years

In an earlier article, YEN.com.gh wrote about how Ghana's real estate sector will take shape in ten years' time. Positive and negative changes, such as economic expansion and the COVID-19 epidemic, have both had an impact on the sector.

The price of the property, the locations where homes are developed, and the kind of individuals who can afford a home will all be impacted by the real estate market trend in the foreseeable future.

Source: YEN.com.gh