The real estate market in Ghana: the nexus between price and income levels

This study aimed to identify the link between the income levels of government workers and the prices of real estate houses in Ghana to identify the prevailing mortgage gaps and to stimulate both reactive and proactive government policies backed by continuous stakeholder engagements under the new normal.

The quantitative approach was used for this study. Two data collection methods were used to achieve the objectives of the study: the survey method, using a questionnaire to collect the primary data, and the use of documentary information as the source of secondary data. For the primary data, prices of two-bedroom and three-bedroom houses were collected. The secondary data collected were: (1) salary levels of government employees and (2) mortgage values prevailing. The three data sets were analysed and structured to identify the relationship between income levels and the prices of real estate houses within the prevailing mortgage system.

It will require a quadrupling of the salaries of only the highest income earners of government employees to afford the average price of a basic two-bedroom and three-bedroom housing in Ghana. Largely, government employees cannot afford these houses with the current price levels and the mortgage systems available. The real estate market in Ghana has not focused on lower-earning groups. The effects of the new normal resulting from the effects of Covid-19 require a paradigm change.

The paper established the relationship between salary levels of government employees and the process of basic accommodation types on offer in the Ghanaian market by the real estate industry: two- and three-bedroom houses. The findings will help real estate developers to consider their approach to housing designs and construction methods and the pricing to ensure that they meet the needs of the public sector workers who could form a large customer base.