20% of Vacancies Are Found in Accra’s Prime Residential Market – Report

Due to a drop in demand from foreign nationals and foreign corporations operating in the nation, the premium residential section of the Accra real estate market still has highvacancy rates, hovering at 20 percent.

This is based on Estate Intel, the Pan-African Real Estate Data Company’s Accra Development Pipeline Report. A data platform called Estate Intel assists organisations in interacting with the African real estate and construction sectors in order to make decisions.

The data analysis firm believes that demand for short-term rentals has been rising, with vacationers and business travellers choosing the medium-sized service apartments over cramped hotel rooms.

The report also says that while Accra has up to 800,000 residential units, an additional 23,000 are expected to be added to the market through ongoing development. This constitutes roughly 3% of the whole inventory of current dwelling units.

In the meantime, the vast majority of people in this pipeline—roughly 80%—are low-to-middle class citizens. According to the research, “the domestic nature of demand also contributes to the mid to low end residential segments’ continued recording of relatively high occupancy rates.”

The demand for housing in the nation remained dominated by those with mid-to low-level incomes. Nonetheless, due to limited demand, the top residential sector is still negative, but the mid-low end segment is positive and shows indications of rising in the market.

Meanwhile more than 80 percent of hotels in Accra’s commercial real estate development pipeline are on hold because of the impact of the Coronavirus pandemic and the currency devaluation. Thus only 14 percent of the pipeline projects are actively under construction.

Although it appears that Accra’s entire inventory of internationally branded hotels will nearly treble, only a small number of pipeline projects are now under development; several have been put on hold because of the pandemic’s effects and the depreciation of the local currency.

1,837 keys, or 69 percent of the total supply, are projected to be in the pipeline from international hotel chains. Therefore, if expenses and the currency rate keep rising, we think the market is oversupplied and that the prognosis for the market will stay negative.

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