Why are rents so expensive in Ghana, Accra?

 

Factors that riggers rent hikes  include:

1. Cost of building materials,
2. Under supplied units,
3. Ineffective rent control law,
4. Increase in urbanization, 
5. Unstable Ghana cedis.

Accra metropolis has about 37.5% of the household renting homes.  Most landlords depend on their property’s cashflow for a livelihood. So they want a top dollar for rents, which is pretty understandable. Others depend on rents in order to be able to pay for debt service (mortgage). Unlike in the western countries where tenants pay rent per month or even month-to-month(MTM) leases, in Ghana it is different. By law, in Ghana, a landlord shouldn’t collect more than 6 months of rent. However, most landlord collect a minimum of  one year(if you are able to persuade him/her enough) to two years advanced payment.

 

1.Cost of Building materials

Building materials is mostly imported into the country but due to inflation and the depreciation of Ghana cedi against the dollar,  suppliers have to increase prices in order to stay in business which affect the cost of construction or renovating of existing properties. For example, cement manufacturers in the country increase the price of 50kg bag of cement to 68GHS in July through August 2022 due to high cost of production which had an impact on real estate market. Todays the price of 50kg bag of cement is between 80 to 115GHS.

 

Read also: BUYING VS. BUILD A HOUSE IN GHANA, WHICH IS BETTER?

2.Undersupplied units

Ghana has housing deficit of 1.8million units to meet the fast-growing population demand. There is growing number of the population moving into the capital, which put a strain on the already undersupplied residential market. To add to that, foreigners also play a role, most expensive apartments in Osu (known for rent hiking), Labone, Ridge Cantonments are renting for $2000 per month are rented by foreigners. So landlord “X” thinks if landlord “Y” is renting out for $2000 why should he/she rent below that? Did you catch my drift?

 

3.Ineffective Rent control law

Ghana’s real estate market is not regulated so anybody can get away with anything, including ripping off tenants. I bet you have heard about rent control law in Accra, is exit only on paper(in the constitution). None of the governments is doing anything about it. They are benefiting in some way so why should they control rent for the ordinary Ghanaian struggling to make ends meet? There is no political will either, to enforce the law. In Ghana, there are laws existing on paper but not in practice. It is one thing to enact laws, it is another to enforce it. I always say if Ghana could enforce existing laws in the country we will be at a better place economically, socially and politically than where we are now.

Read also: How To Rent A Room In Accra: Houses & Apartments For Rent

 

4.Increase in urbanization

Everyday  thousands of Ghanaians in rural areas are moving into areas to make there their next home. A report from 2021 population census show that there has been  11.4%  increase of urban migration in Ghana between 2010 to 2021. The urban migration continue to increasing from 12.5 million (50.9%) in 2010 to 17. 5 million (56.7%) in 2021 with almost half (47.8%) of the increase in Greater Accra and Ashanti regions. With this continues increase of the population moving to Accra, the demand for housing obviously also increased. Landlords have a say than renters-the choose who to rent to and under what payment terms. It is demand and supply relationship. The cause of causes of urbanization in Ghana include:  unemployment, access to social amenities, escape poverty, family reasons, economic reasons, high income job, personal reason and climate. Education is also a  key reason for urban migration. Ghana’s literacy rate for adult male population is 82.04% (8,557,520 persons). About 1,873,646 are illiterate. And for literacy rate for adult female population is 71.35% (7,522,421 persons). About 3,019,975 are illiterate.

People who move to urban areas have one thing in common- to improve their quality of life. Most people get the opposite. The implication is this urban movement comes with challenges. The effects of  urbanization in Ghana include: congestion, high crime, unemployment rate, poor sanitation, health problems, air pollution and poor nutrition

 

5.Unstable Ghana Cedis

Ghana’s Cedis is “anchored” to the USD. The stability of the Cedi determines the price of good. A price of imported building materials directly affect the prices of building or renovation of units. Also  the 2021 54.1% hyperinflation the country recent has affect everything including  housing -rent also increased as a result.  In Ghana prices always goes upwards and never comes down even when the economy stabilized. It sucks but is the the state of affairs in the country.

 

What is the best place to live in Accra?

Supposing you are loaded, the best place to live in Accra are affluent neighborhoods like Cantonments, North Ridge, Labone, Airport residential, Dzorwulu, Roman Ridge, East Legon, MacCathy Hill, Airport Hill, West Legon and part of Osu and Arguably Spintex road.

Which Places are cheap to rent in Accra?

Cheap Places areas  include: Nima, Taifa, Ashiaman, Jamestown, Tantra, Kisseman, Tesano, Kasoa (although it is part of Central region but gradually in proximity to Accra it has become fast-growing sub town). Even though there are locations where rent is low it will depend on the type of property, furnished or unfurnished or number of bedrooms and the amenities.  Also, as they say, you get what you pay for – in some areas like Nima community which is known for violence and crime, you will have to sacrifice your safety -in other words you could get robbed.

Read also:  BEST AREAS TO BUY CHEAP PLOTS OF LAND IN ACCRA

Things to consider before renting a house in Accra

You will do yourself a favour if you could take some time to find out more information about the neighbourhood you’re planning to move into or probably raise your kids. Let’s take a look at things you should take into account.

1.Crime rate – Accra is no different from any metropolis in the world. That said, there are areas which are safe to live, while others it will be a pain in the neck, especially if signed a long lease. I had a friend who was robbed in a broad daylight when he was walking home from work. You don’t want to compromise your safety for proximity or affordable rent.

Read also: 10 Less Desirable Area to Live in Accra: Avoid at All Cost

2.Health centres –Find out what are the nearest hospitals or clinics or pharmacy stores. If there is none. How much time will it take you to get there in case of an emergency situation? Our health system is not the best, and you won’t be doing yourself any good by adding insult to the injuries.

3.Nonrefundable rent: – One thing you should take note of in Ghana is that as soon as there is change of hands ­­– rent for the keys, it is going to be difficult to get the remaining lease amount back if you decided to terminate the lease. Landlords in Accra won’t budge, no matter how good your reason is. Money paid is gone like placing a bet on a roulette table unless you have a provision in your lease agreement.

4.Traffic congestion–  The traffic situation in Accra has improved a bit but not much – you definitely want to make sure, you sit in traffic for hours commuting to and fro. For example, on Aflao one carriage road from Prampram to Tema takes 2 to 3hours drive. Imagine a 30mins normal drive  between Tema and Ada now takes 3hours. Hopeful the government’s planned dual carriage phase 1 will solve the problem on that stretch. Some commuters have to wake up at 3am including their kids to beat traffic.  Kasoa is another traffic congestion route you need to be aware if are making plans to relocate to that neighborhood. But wait.

Read also: Top Locations in Accra: Houses and Apartments for Rent or Sale, and Commercial Spaces for Rent

 

5.Sign lease agreement: – In Ghana, most lease are verbal. You meet the landlord or his agent and negotiate, money down before keys. Make sure you sign a lease agreement not verbal agreements or handshake. If you are leasing from a professional property management company representing the owner of course they will require you to sign a lease agreement. Someone I know ask me to recommend him a lawyer to help him get a refund of the remaining lease as he don’t want to live there anymore. I asked him if he had a lease agreement with the landlord which has a termination clause? As you rightly guess, the answer was no. Without a contract and a provision in it, you have to case. The landlord can choose not to listen to your plight or return your calls.

 

Why is there so much traffic in Accra, Ghana?

The causes of traffic congestion include:

1. Increase in population
2. New car owner
3. Poor road network
4. Indiscipline driving
5. Breakdown of traffic lights
6. urbanization

 

 

What should be in your lease agreement:

• Property name (if any)
• Property address
• Number of bedrooms
• Owner’s name, address and best contact information
• Lessee’s name, address and best contact information
• How much is rent per month
• When is rent due?
• Rent payment method(I recommend you pay from a verifiable source than handing over physical cash)
• Lease duration or period
• Who pays for the Utility bills: –
• How much is the utility bills, and When is it due?
• Termination procedure – what penalties do the terminating party has to pay, and under what circumstances or conditions can the lease be terminated?
• Lease renewal, under what terms, if different from the current terms? What will be rent bump?( rents never goes down in Ghana but an upward spiral, it is better to negotiate that in advance)

 

In summary, find a place that  best fit you. Make sure the area is safe to live. Any metropolis has crime areas. Your job is to ask around, use google and you will find the ideal location and affordable properties for rent that meet your budget.

 

 

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Read also: Why do Americans leave their luxurious life and move to Ghana?

 

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Read also: ECO-FRIENDLY HOMES FOR SALE WITH SOLAR IN GHANA

 

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