The History of Land Prices in Kumasi

Many are those who continue to ask me, 'is it good to invest in land in Kumasi?' I have several times tried to let such people see what i see in the land market. But most often i fail. I therefore took time to research into the history of land price in Kumasi. I hope you will get the answers you want in the land market in terms of land prices.

         In 1960, 100 feet by 100 feet land at Asaago, a town near Kumasi was worth less than ¢10. In 1974, the same land meant for residential building sold for GH¢3 at Asenua. At Esereso, at the time when land was first subdivided for residential purposes in 1985, whiles strangers paid around GH¢4, subjects of the village presented bottles of Schnapps. An acre of land at Adum, now the Central Business District and the most expensive location in Kumasi, in 1960 was worth around GH¢50. But by 1973, land prices in Adum had risen to over GH¢164. Probably, this was the highest price achieved in Kumasi during this time.

However, the period between 1990 and 1999 saw land prices rise far beyond expectations. This is due to several factors. During this period, constitutional rule had been regained. Rawlings’ military rule in Ghana had ended. The 1992 Constitution, firmly establishing the 2^nd Republic of Ghana, had been promulgated and guaranteed private ownership of property (Article 18; 1). A democratic election had been successfully held. Most Ghanaians had begun to build confidence in the economy and had started investing in land to accumulate wealth. In January 1995, with inflation hovering around 59%, land prices, like all other commodities in Ghana, was rising fast. The young generation realised that capital gains made from land could be a quick path to wealth due to the rapid increases in land prices. These, among other factors, tickled demand for land. Suddenly, everybody was buying. Land speculation became a rewarding part-time business for many. With so many people looking for land to buy, estate agency gained ascendancy without control.

The price of land sold in just a few years quadrupled in value. By 1997, Alhaji Ibrahim Baryeh reported that a 100 by 100 feet building plot at Asenua exchanged for GH¢130, far higher than the GH¢3 in 1974. Within a space of 23 years, land at Asenua had gained capital value by 4,233%. At Kyerekrom, prices range from GH¢220 to GH¢350 depending on whether the buyer was a subject of the town or a stranger. In the case of Emena, land exchanged between GH¢85 and GH¢120. At Apire, prices were between GH¢120 and GH¢350. By February 1997, the same land which sold for ¢10 in 1960 at Asaago fetched between GH¢150 and GH¢200. At Santasi, prices started from GH¢300. The decade just before the year 2011 did not see land prices fall. In fact, they rose rapidly. With the year 2000 beginning another decade in the land market, political power had been peacefully transferred from the National Democratic Congress (NDC) to the New Patriotic Party (NPP) through a fair, transparent, and democratic election. John Agyekum Kuffour had been sworn in as the President of Ghana and had declared a ‘golden age of business’.

Like several other markets, the land market responded positively. Confidence in the Ghanaian economy had deepened. Demand for land rose, and in tandem with prices. By 2004, land prices in Kumasi had risen from previous highs to higher levels. Prices ranged from GH¢3,000 to as high as GH¢50,000 for a standard 100 feet by 100 feet plot. A standard plot at neighbourhoods such as Asokwa, in 2003, was sold around GH¢60,000. By 2006, land prices in the city ranged from GH¢200,000 to GH¢300,000 per acre which were mainly leasehold interest A 100 feet by 100 feet land which exchanged at Asaago for GH¢150 in 1997, was now priced over GH¢5,500, representing about 3,567% capital gains over 13 years. Half of an acre building plot at Atasomanso which sold for GH¢3,000 per plot in 1997 rose to over GH¢90,000 by the end of 2010 (i.e. 2,233% in capital gains in 13 years). Between 2000 and 2010, like the decade before it, land prices seldom dropped. At Apire, a standard building plot from 1990 to 1993 was sold between GH¢300 and GH¢400. By 2003, prices had risen to nearly GH¢3,000. Land prices in the neighbourhood did not stop rising. It skyrocketed to over GH¢7,000 in 2010.

In recent times, price of undeveloped land has been rising fast. The picture below charts prices of selected locations in Kumasi. Analysis of land prices collected from the field presents interesting statistical results. The maximum land price per acre of GH¢1,869,200 was achieved at Adum, the Central Business District of Kumasi. This means that Adum is the most expensive location in Kumasi. The minimum price of Gh8,000 per acre was recorded at Zongo Extension. However, the most frequent price (mode) at which an acre of land was bought was Gh40,000. This translates into GH¢10,000 for a standard plot. And yet the mean price of land per acre recorded was around GH¢141,300. What this means is that with GH¢35,300, a standard plot at a good location can be acquired. In all, prices ranged from as low as GH8,000 to as high as GH¢1,869,200 per acre. 

            What the history and current land prices in Kumasi tell us is that an investment in land is by far the best option. Investment in land is seldom affected by inflation. Land prices seldom fall. Capital gains from land are astonishing. Even capital gains realised on the Ghana Stock market in a year on all the stocks listed on the GSE do not often come close. In other regions of Ghana where pressure of land is relatively low, one is still better of investing in land. for example, between 2008 and 2009, land prices increased by 66.7% in the Wa Municipality in the Upper West Region of Ghana. In the Eastern Region of Ghana, between 1992 and 2003, land prices recorded over 235% increase.