COVID 19 Diaries - Impact of Covid 19 on the Real Estate Industry in Ghana

May / 04 / 2021

When the world heard about COVID-19, many people assumed it was China’s personal problem. It was thought that it would be contained. Besides, wasn’t it just a flu? But that was where humanity erred. This was not just a mere flu. It was a virus that wreaked extreme havoc on the human system. It affected the ability to breathe and in some cases speak and move and what’s worse? The virus started mutating to form various strains that were harder to treat.

Then on 13 March 2020, this novel virus spread its wings on the back of human travel and arrived in Ghana! The two people affected slowly multiplied to tens of people. Within a short span, hundreds of people had been affected!

On 30th March 2020, President Nana Addo Dankwah Akufo-Addo announced a lockdown in Greater Accra and Kumasi. For close to thirty days, Accra and Kumasi were placed in a lockdown with only essential workers being allowed to move from one end to the other. This was a call to contain the increasing spread of COVID-19 in Ghana. The aftermath of COVID-19 in Ghana was felt by every of the Ghanaian. In this blog post, the impacts of COVID-19 on the real estate industry in Ghana will be discussed.

  1. A Decline In Rent for Office Space

Due to the restrictions placed on non-essential workers, lots of companies and agencies had to adapt to working from home. This did not have any major effect on productivity The effect of this has been that several offices are not renewing their rent or downsizing for smaller office spaces.

  1. Short Stay apartments Suffered A Huge Blow

The bloodline of short-stay apartments was tourists and visitors who required residential properties for short leases. With COVID-19, there was a ban on international travel. Kotoka International Airport and Ghana’s land borders were all closed to human traffic. This greatly reduced the inflow of guests who usually resided in short-stay apartments.

  1. Loss of Jobs Affecting Liquidity of Customers

COVID-19 caused the furlough of many workers. Others less fortunate were laid off abruptly. This has affected the liquidity of many customers thus leading to many people being unable to meet up with mortgage payments. Others are unable to keep up with rent. Some persons have also had to prioritise other necessities overpaying for high-end homes thus there has been a general slope in the acquisition of properties.

  1. A surge in Online Sales Leading to Surge in Warehousing Spaces

Humans are legendary adapters. Whilst COVID-19 brought a halt to physical movement, it led to a surge in online and e-commerce shopping. People paid for items virtually and had them delivered to their places of abode during the lockdown. This has led to some businesses adopting bigger storage facilities to help them meet the ever-increasing demand for online shopping.

  1. Contracts for the Acquisition of Property Reviewed

Some property owners find that their contracts are not as airtight as they appeared. Some contracts had no provision on the legal rights and duties of each party in the case of an unforeseen pandemic. For most contracts, only an act of God could absolve each party from liability under their contracts. Currently, contracts will now have particular terms and provisions that may cover more unforeseen circumstances such as a pandemic.

These are some of the effects COVID-19 has had on the real estate industry in Ghana. Despite these issues, Devtraco Plus still has flexible terms of payment for their clients to ensure that there is ease and flexibility on the client despite the harsh economic realities that have plagued many people because of COVID-19.

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