City Research Online

Abstract

Although it remains small compared with advanced economies, in Ghana there is a growing residential stock which constitutes the basis of an emergent real estate investment market. Much of the recently constructed stock is income-producing rented accommodation, and falls in the formal sector of the market - where sale and leasing transactions are systematically documented in the records of the Ghana Land Valuation Board. The research presented in this thesis makes several contributions to knowledge and understanding of residential real estate markets in Ghana. First, and most fundamentally, it demonstrates that it is feasible to construct technically robust indicators of residential market performance from the records held by state agencies, through the construction of hedonic models which suggest processes of price determination are consistent with those found in other countries. Time series produced from these models, running from 1992 to 2007, document for the first time trends in capital values, rental values and investment returns for a substantial part of the Ghanaian residential market. This thesis also explores practical applications of the newly created residential performance indices. The current research examines the differentials in price determination and performance across the main submarkets of the Accra-Tema conurbation, the dynamics of change in market prices over time against economic and financial indicators, and the returns achieved on residential investment compared with Ghanaian equities and Treasury Bills. The results demonstrate that the residential market has seen strong rental and capital appreciation over the past fifteen years, yielding investment returns ahead of the high rate of general inflation. Compared with other Ghanaian asset classes, residential real estate shows both a rate of return and a level of risk which sit between those on fixed income and equities investments, in line with fundamental theory and experience in other countries. As in other countries, residential real estate returns show low correlations with those on equity and fixed income investments, suggesting a strong case for real estate in a multi-asset portfolio. Beyond the Ghanaian market, this thesis suggests the process of constructing residential indices from records held by state land registration and taxation authority may be replicable in other African countries where there are similar systems of land administration and management, provided that the task of data assembly and validation is feasible.

Publication Type:	Thesis (Doctoral)
Subjects:	H Social Sciences > HG Finance
Departments:	Bayes Business School > Finance Doctoral Theses Bayes Business School > Bayes Business School Doctoral Theses

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