Demand for Housing in Ghana

Abstract

This study seeks to illuminate in a modest way the housing market in Ghana through an analysis of the demand behavior. Housing demand has been approached from a macro-economic standpoint using a simple stock-adjustment model. The Ghanaian housing market, like those of most developing countries is imperfect. Households in income categories other than the highest income do accept housing which does not meet their expectations. supply of housing lags beyond their capacity. Rural housing problems are identified as qualitative. Mortgage finance in respect of housing has not been very effective and, in most cases, therefore private acquisition of a house has been on cumulative basis through personal savings. Empirically the demand for housing in Ghana has been found to be elastic with respect to income. Thus, income increases will generate housing expenditures increasing as a proportion of income. In the light of the above, the study suggests that efforts must be made to step up investment in housing in order to close the gap between the desired and actual stocks of housing. Constraints that impair supply expansion require identification. Many government policies such as land policy, rent control, housing standards and building codes and need overhaul if ever housing supply is to be responsive to demand.