Something significant happened in 2022: fuel prices (petrol) which were around GH₵6 per litre jumped to as high as GH₵19 per litre before coming down to settle at roughly GH₵13 per litre. This astronomical jump in prices was the result of a global hike in oil prices and a sharp depreciation of the Ghana cedi. The oil-producing country which had allowed its state refinery to run down was caught criminally unprepared for a sharp rise in the refined fuel it had got used to importing as well the closure of the Eurobond market which had financed its fuel thirst.

Why do I begin an article on real estate choices with fuel prices? Well, it’s important to understand the factors that drive the choices people make when it comes to deciding on a permanent residence. For years new developments outside of the city center have attracted rich and upper-middle class Ghanaians (in Ghana and the diaspora) with the promise of affordable 2&3-bedroom homes which are close enough to the city to allow daily commutes but far enough from “prime areas” not to cost an arm and a leg.

Do not get me wrong, such property is still a fantastic deal if you have the means. With about $50,000 – $150,000 one could be the owner of some of this property in gated communities on the outskirts of Accra. But the fuel price hike has suddenly complicated the financial math. On a compound growth basis prices (measured by the Ghana Statistical Service’s CPI) have increased by 90% over the 2022 and 2023 years; transport fares have more than doubled and so have fuel prices. Using personal and anecdotal data, the cost of running a compact/mid-sized sedan around Accra for a month is easily GH₵3,000 ($250). For a luxury sedan or SUV it is reasonable to assume this is double. And if you’re going through long commutes and traffic each morning and evening it is not outrageous to think you can be spending GH₵8,000 – GH₵10,000 a month on fuel alone.

Now let’s consider other factors. The average Ghanaian household size has fallen from 5.1 in 2000 to 3.6 in 2021. Ghanaians are having fewer children but also large extended family dwellings are becoming rarer. In the meantime Accra continues to dominate as the commercial capital and preferred destination of the country. With 5.4 million people, the capital region has a population density of 1,678.3 people per square meter which is almost 6 times more dense than the second most dense region of Central region. There is only so much land available. The dream of other regions becoming hubs in of themselves remains a dream as net migration into Greater Accra of 1.1 million dwarfed the Ashanti region’s 207,000 and 10 of the 16 regions saw negative net migrations. Accra is going to remain the commercial hub of the country for the foreseeable future.

So what does all this mean for city apartments? What it means is that owning an apartment – be it studio, one-bedroom, two-bedroom, or even three-bedroom is an attractive proposition if it is located near the city centre. The savings on fuel, the shorter commutes, the access to utilities, and the better roads have contributed to increasing the functionality of city apartments when compared to homes in suburban communities.

This does not mean that one should not aspire to own a home with their own compound. It does not also mean that property far from the city centre is a bad investment, far from it. The cultural pull towards owning a piece of property where you have some “stretching room” is real. And I do believe that the challenges with Ghana’s currency, inflation, and credit worthiness requires that real estate forms a part of everybody’s investment portfolio. However, too many people consider apartments to only be suitable for rent or purchase by high net worth individuals who only stay in the country for two weeks every year. Giving that these apartments are priced similarly to the homes initially spoken about, you should definitely consider them if you have the budget.