Constraints in Real Estate Development Finance in Ghana

Corporate Real estate finance in Ghana is fraught with problems emanating from infrastructural inadequacies with a preponderance of equity finance. Property owners use their own equity, barter arrangements and remittances from abroad to finance substantial volumes of the investment. Poor access to debt finance relates to demand-side problems, particularly a lack of information about available sources, rather than a lack of available credit. The financial market, however, is critical to the development of the real estate industry. The aim of the research is to identify and analyse the nature and the causes of financial market constraints in corporate real estate development in Ghana. A questionnaire survey and interviews were conducted to ascertain from corporate real estate developers and financial institutions (commercial banks, development, merchant banks) the underlying causes of difficulties in real estate finance. Financial constraints are identified under demand and supply of debt and equity finance as well as information and knowledge constraints.