By Daniel Kontie – CEO, Africa Continental Engineering and Construction Network Limited (ACECN)
Between January and May 2025, the Ghanaian cedi has experienced a remarkable appreciation of approximately 16% against the US dollar, positioning it as one of the world’s best-performing currencies, according to Bloomberg News (2025). This surge is attributed to a combination of factors, including the Bank of Ghana’s tight monetary policy, increased gold reserves, improved fiscal discipline and enhanced foreign exchange inflows.
This development came as a huge sigh of relief to Ghanaians as it appears to be a novel development leading to a significant reduction in fuel prices, transportation fares and the general price level of goods and services. For this reason, pressure has been mounted on the Ghana Real Estate Developers Association (GREDA) and other stakeholders of the real state sector alike to also respond to this general price reduction by also reducing property prices occasioned by the strengthening of the Cedi.
While this development signals macroeconomic stability, boosting investor confidence, it has nuanced implications for Ghana’s real estate sector, where properties are predominantly priced in US dollars. This article delves into the multifaceted impacts of the Cedi’s appreciation on the real estate market and offers strategic recommendations to navigate the evolving landscape.
But before we go into the details, do you think this call to reduce property prices is justifiable? Do not go away, get ready as we discuss details of the insights in the subsequent paragraphs of this article.
Implications for Local Property Buyers
In fact, the Cedi’s appreciation has led to a huge exchange rate depreciation loses in favor of buyers and at the expense of developers. What this means is that a prospective US dollar earning buyer will need more dollars to buy a property now than it was in the past, a stuck reverse of the status quo in the last couple of years.
Put it differently, the Cedi’s appreciation against the US Dollar has led to a significant decrease in the local currency equivalent of dollar-priced properties. For ease of comprehension, let me give you a practical example, a property listed at USD$200,000 would have cost approximately Ghs 3 million at an exchange rate of GHS 15/1$USD in January 2025.
By May 2025, at an exchange rate of GHS 10.20/1$USD, the same property would now cost around Ghs 2.04 million resulting in an exchange rate loss of about USD$94,000, a Cedi equivalent of Ghs 960,000 approximately. This is a huge quantum leap, making properties more affordable for Cedi-earning or local buyers. If these gains are sustained, these reduced Cedi-equivalent prices will spur interest among local buyers, particularly the emerging middle class seeking investment opportunities in the real estate sector. This will lead to a significant expansion in demand for properties in the mid-end market segment, where demand remains robust, driven by urbanization and a growing middle class.
However, demand may remain unchanged even with upward price adjustment for high-end properties by virtue of the ostentatious nature of that category.
Implications for Foreign Property Buyers
Property demand from the diaspora community or foreign buyers will fall due to the strengthening of the Cedi. What this means essentially is that foreign buyers will need more dollars to be able to buy a property which could have been bought with less dollars in the past as demonstrated earlier in the preceding subheading, “implications for local property buyers”.
For example, in January where the exchange rate was USD$15/GHS1, a person buying a property worth USD$100,000 in Ghana would need Ghs 1.5million cedis to be able to buy the property, now compare that to today’s (June, 3, 2025) exchange rate of USD$10.22/GHS1, this same buyer will need about USD$146,777 to be able to purchase the property.
This gives an exchange rate difference of about USD$46,777 in favor of the developer and against this foreign buyer in question. This is significant and has the potential to discourage foreign participation in the Ghanaian real estate market in the short-term.
Implications for Local Buyers on US Dollar Denominated Mortgage Loans
With a stronger Ghana Cedi, the value of US Dollar denominated mortgage loans decreases for local cedi earning buyers. This translates into lower monthly payments, freeing up more funds for other expenses or savings. This is the time all local cedi earning buyers with US Dollar denominated mortgage facility can make a lot of savings by massing up savings to service their loans before the Dollar bounces back, if it ever does at all.
Implications for Buyers on Cedi Denominated Mortgage Loans
For property buyers on Cedi denominated mortgage or construction loan facilities, there are virtually no negative implications. However, there is a potential risk of interest rate hikes if the Bank of Ghana (BoG) continue to tighten the policy rate in attempt to curtail further inflation.
Therefore, until the economic fundamentals are reviewed to focus more on supply side economics, the current policy rate tightening is a cul-de-sac and will soon reach its maximum potential resulting in extreme interest rates against buyers on floating or adjustable mortgage interest rates.
For this reason, it is also advisable for those on floating or adjustable Cedi denominated mortgage facilities to double up on their loan servicing efforts.
Implications for Resident Foreign Property Developers/Investors
On the assumption that these gains are sustained, foreign investors or buyers may exhibit caution due to the reduced dollar-denominated returns when converting profits back to their home currencies. The appreciation of the Cedi implies that the same Dollar investment yields fewer returns upon repatriation, potentially dampening foreign investment enthusiasm in the short term.
This development is likely to trigger a short-term foreign investor withdrawal from the market, with existing foreign residential developers likely to stop listing their properties for sale in expectation of a stronger Dollar or adjust prices to compensate for the exchange rate depreciation losses.
Moreover, both resident foreign and local developers who rely largely on diaspora clients may face low sales turnover as foreign participation in the market takes a nosedive. It will require reconsidering new sales strategies to stay in business.
Development Cost Implications for Developers
Developers relying on imported materials and equipment may benefit from the stronger Cedi, as the cost of imports in local currency terms decreases. This reduction can lead to lower construction costs and potentially more competitive pricing for new developments.
Market information gathered in our recent survey suggests a significant reduction in many of the inputs for property development. Fuel prices, which is an integral factor in transportation in the construction industry, has dropped considerably, with steel reinforcement bars and some others towing the same trajectory. Cement a major input has also dropped significantly et cetera.
The impact of these price reductions may be reflected in the pricing of these properties if the Cedi’s strength is sustained for a reasonable period. In fact, it is only under this circumstance that it will be justifiable to push developers to reduce prices, but until that, existing properties already listed for sale before the emergence of this trend, may still have to maintain their prices or better still adjust prices upward to compensate for the exchange rate depreciation differences.
