Household Incomes in Ghana is a very important variable to look at. Housing is considered affordable when a household spends up to thirty percent of its gross annual income on rent or house purchase including applicable taxes, insurance and utilities (MWRWH, 2015). The definition recognises the fact that expenditure on housing should not affect the ability of a household to meet its other basic needs such as health, nutrition and education. Thus, when a household’s housing expenditure exceeds this threshold, that household can be said to be in a stressed situation. The definition brings to the fore three essential parameters; household income, household expenditure patterns and cost of housing.

household income

Household incomes have been increasing over the years from GH¢2,502.6 in 2006 (adjusted for inflation to 2013) to GH¢7,321.0 in 2013 – over 290% in the 7-year period (GSS 2008 and 2014,). Average annual household cash expenditure on housing according to the Ghana Living Standards Surveys indicate that households’ expenditure on housing is less than the national affordability threshold – 3.8% in 1998/1999, 9.5% in 2005/2006, 11.3%, in 2012/2013 (GSS 2000, 2008, 2014). This data also indicates that expenditure on housing and utilities as a share of household expenditure has consistently increased over the years. Based on the national policy position on housing affordability, available national data supports the assertion that housing is (very) affordable to Ghanaian households. The situation is however, significantly different when one looks beyond the face value of the figures.

A significant share of Ghanaian households in both urban and rural areas are living in crowded spaces. Nearly half of all households occupy single rooms. Another 26.7% occupy two rooms (GSS, 2014). With an average household size of 4 persons, the levels of overcrowding are immediately conspicuous. As much as 19.7% of households with household sizes of 5 or more persons occupy single rooms (GSS, 2014). The imperative is that households who cannot afford extra space to meet the 2 persons per room occupancy requirement, crowd themselves in the limited available space. This not only poses health concerns but with parents, children and in some instances extended family members sharing the same room space, privacy is compromised. Widespread overcrowding questions the rather narrow locus of the policy position on housing affordability.

In 2012/2013, 26.8% of households in urban areas were in rent-free arrangements. Although this is reduction from 31.8% of households in similar tenure arrangements in 2008, close to one in three households have their housing needs cared for by extended filial relations (GSS, 2008 and 2014). We are looking at a situation where new household formations cannot afford their own housing but have to continue to share living arrangements with family members. It is not uncommon to find newlyweds who continue to stay in their parents’ home up to the third generation because they cannot obtain their own shelter.

Within the Greater Accra Metropolitan Area in particular, another housing tenure is common. Streetism and homelessness are widespread. Within the James Town and Accra New Town enclave, several street households can be seen at night on pavements and verandas of shops after close of business. The Accra Metropolitan Assembly (AMA) estimates that there are over 90,000 youth who take shelter on the streets within the metropolis (AMA, 2014). This situation can be attributed primarily to poverty.

Finally, it might be interesting to also look at the quality of housing and space occupied by households. Though national statistics do not specially capture data on housing quality, it is observably, generally poor across the country. In rural Ghana, housing is commonly built with mud, earth and/or organic materials. These materials are thermally suitable for the high tropical temperatures but they cannot withstand the vagaries of weather. Using roof materials as a proxy for housing quality 20.2% of houses in rural areas are roofed with bamboo, palm leaves/thatch and wood (GSS, 2014). In urban areas, a significant share of the populace in the country’s major cities live in slums. Residents in such areas including Nima, Old Fadama, New Takoradi, Ashiaman, live in particularly deplorable housing conditions with limited access to basic services. About 38% of Ghanaian households live in such conditions (UN-Habitat, 2017).The housing circumstances of Ghanaian household-incomes point in the direction that not only is housing expensive but the housing delivery systems are not adequately addressing the demands of the low-income market. Housing provided by the formal estate developers are targeted at the high-end market segment. In 2016, the cheapest unit on the formal market cost about GH¢120,000.00.

With low incomes coupled with high mortgage cost which average 32% per annum, very few people can afford housing on the formal market due to low household incomes. The current situation points on the one hand to the inadequacy of the policy position on affordability as a share of household expenditure. On the other, it also suggests that public interventions in affordable housing based on this definition could miss the real market segment in need of such interventions.

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