3 Ways The Ghana Cedi Depreciation Affects The Real Estate Industry In Ghana

• The depreciation of the Ghana cedi against the dollar has affected several industries in the country, including the real estate industry
• Many people have had to halt their real estate projects so that they do not lose their valuable assets and investments
• Nevertheless, there is a way that the Ghanaian government can cushion the real estate industry against the current economic crisis

For much of 2022, the Ghana cedi steadily decreased in value against the dollar and was at one point the worst-performing currency in the world. The economic crisis affected goods, services and the various industries in the country, including the real estate sector. Below are three ways the real estate industry has been impacted by the cedi depreciation.

Wealthy people are acquiring more real estate assets

Those that can afford it are buying more real estate properties as a way to cushion their finances against the devaluation of the cedi. Property may be used as a powerful hedge to guarantee that investors continue to get a stable income because it is an asset that maintains pace with inflationary pressures. Land has intrinsic worth and may increase over time as inflation increases since it is a scarce resource.

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Property will become more expensive

Most real estate developers import building materials from abroad to build houses in the country. The depreciation of the cedi means that they have to significantly increase the prices of their properties so that they can continue to import materials and make a decent profit when they sell their homes.

Middle-income earners may not be able to afford a house

The average Ghanaian may not be able to buy a house because of the high prices of the properties. According to Mouhamad Hamidi, Chief Executive Officer of EYE-con Construction, the real estate sector would suffer greatly if the central bank does not take action to stop the cedi's devaluation. He explained:

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According to how I see the situation, if no practical steps are taken to stop the cedi from plummeting anymore, real estate companies will continue to build but no one will buy. People will wait till the cedi is stabilised.

How The Government Of Ghana Can Support The Real Estate Industry Amid The High Cost Of Living In Ghana

In a related story, YEN.com.gh wrote about how the government of Ghana can cushion the real estate industry against the economic storm brewing in the country. The average Ghanaian has not found the real estate market to be welcoming, as houses are priced in dollars and landlords require one or two years' worth of rent in advance.

Given the devaluation of the cedi against the dollar and the high cost of living in the nation, the issue has gotten worse. However, the Ghanaian government has a role to play in protecting the real estate sector from the country's financial instability.

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Source: YEN.com.gh