How Inflation and Rising Costs Impact Ghana’s Rental Market
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Loading... - Eric Armah
- 30 Jan 2023
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The price of renting a home is increasing along with the cost of living in Ghana. Many Ghanaians find it difficult to keep up with the rising costs as a result of the skyrocketing rental prices exacerbated bro by inflation. We examine how inflation affects Ghana’s rental market and offer suggestions on how to lessen its effects.
Simply put, inflation is an increase in the cost of goods and services over time, which can be caused by several factors including a decrease in supply, an increase in demand, or a combination of both. As prices rise, money becomes less valuable, which means that people need more of it to buy the same amount of goods and services. This affects all members of society and in particular those who are already struggling financially.
Inflation has risen steadily for years, leading to a dramatic spike in producer price inflation which peaked at 78.1% in November 2022 according to the statistics service and slowly retreated in December to 52.2%. The consumer price inflation accelerated to 54.1% in December year-on-year due to rising fuel, utilities, and food costs.
Affordability is an issue. It is not uncommon to see listings of between $1000 – $3500 (11500 GHS – 40200 GHS) a month for a two-bedroom furnished apartment in East Legon, Cantonments, and other prime locations in Accra. These rates are beyond the reach of many households where typical gross salaries range from 2000 – 5000 GHS ($175 – $434) a month. This means many of the sought-after apartments rely on the patronage of expats and seasonal travellers or sit empty for long periods of time – for months or even years. The underutilization of properties adversely affects landlords, who rather than owning assets that attract steady year-round revenues, end up managing liabilities that require them to fork-out funds for maintenance, security, and marketing fees. Read More…
