The Rise of Incremental Housing in Ghana: A 2026 Intelligence Brief

From necessity to preferred strategy — how self-building is reshaping the nation’s housing landscape

Executive Summary

Incremental housing — the gradual, phased construction of homes as funds become available — is not a marginal practice in Ghana. It is the dominant housing approach. An estimated 90 per cent of Ghana’s housing stock has been built through self-building, with the process contributing approximately 7.3 per cent to the country’s GDP . Yet for decades, this approach has been treated as a failure of the formal housing system rather than a legitimate alternative worthy of policy support.

A 2025 peer-reviewed study published in the journal Cities challenges this assumption . The research, conducted in Techiman, identified eight underlying factors that explain the incremental housing phenomenon. Contrary to conventional wisdom, builder control factors — the desire to manage the construction process to meet specific needs and aspirations — were found to be the primary drivers, while economic and financial factors were secondary . This finding suggests that incremental housing is likely to persist even if mortgage market bottlenecks are addressed .

This ASJ report examines the rise of incremental housing in Ghana: its scale and contribution to the economy, the determinants that drive it, the financing strategies that sustain it, the challenges it creates, and the emerging policy recognition that this approach deserves formal support.

Part 1: The Scale — 90% of Ghana’s Housing Stock

The Numbers That Define the Phenomenon

The dominance of incremental housing in Ghana is not a recent development. It has been the primary housing delivery mechanism for decades.

Key statistics :

• 90 per cent of all housing supply in Ghana is built incrementally 

• The housing sector contributes approximately 7.3 per cent to Ghana’s GDP class=””> 

• The sector employs an estimated 180,000 people, with 75 per cent in the informal housing sub-sector 

The conventional explanation for incremental housing is that it is a product of market failure — high mortgage rates, limited access to formal finance, and low incomes force people to build slowly over time .

A 2025 study using Exploratory Factor Analysis in Techiman challenges this assumption . The research identified an eight-factor structure underlying the incremental housing phenomenon :

1. Builder control factors — Desire to manage the construction process to meet specific housing aspirations

2. Existing property characteristics

3. Perceived housing approach

4. Financial inclinations

5. Financial barriers

6. Economic barriers

7. Perceived cost

8. Knowledge/cultural factors

The critical finding : Builder control factors primarily explain the incremental housing phenomenon. Economic and financial factors were found to be secondary .

What this means : Incremental housing is not merely a fallback option for those who cannot access mortgages. It is a deliberate choice — or at least a preference — driven by the desire to control the building process. This finding suggests that even if mortgage markets were to improve significantly, incremental housing would likely persist as a preferred approach .

The “Half Plot” Phenomenon

A related phenomenon in Ghana’s secondary cities is the acquisition of “half plots” — land parcels smaller than the standard 80×100 feet (or similar) approved by planning authorities . A 2024 study in Kumasi found that urban poor homeowners are motivated to acquire half plots mainly because of the high cost of land (which can be 15 per cent of total building cost) and the informal nature of the rental housing market . This practice, while enabling homeownership for low-income households, creates challenges including high densities, inability to secure mortgages, conflicts with neighbours, and lack of legal documentation .

Part 3: The Financing Strategies — How Ghanaians Pay for Incremental Building

The Absence of Formal Mortgages

Formal mortgage markets are largely inaccessible to low- and middle-income households in Ghana. A 2022 study published in Housing Policy Debate found that “high mortgage repayment-to-income ratios and unavailability of adequate and secured collateral are major setbacks for low-income households in accessing housing finance” .

The result is that low-income households rely on the incremental building process . Savings are made at intervals, enabling self-builders to undertake specific construction activities as funds become available .

Financing Sources

The financing of incremental housing draws on multiple sources :

1. Phased savings — Self-builders save incrementally over time, often targeting specific construction phases: land acquisition, then materials, then labour.

2. Credit from material suppliers — Some self-builders save directly with wholesalers and retailers of building materials toward future purchases, while others procure materials on credit . A female food seller in Techiman recounted how she obtained building materials on credit, paying in instalments from her daily market sales — demonstrating a high level of trust and social networks between self-builders and material suppliers .

3. The “Roof Now, Pay Later” model — Targeted supplier-driven financing, such as the Dophil Roofing System initiative with Societe Generale, allows salaried workers to complete stalled roofing projects with payments spread over 1 to 3 years .

4. Intergenerational financing — Construction financing often extends beyond the household head to encompass younger household members once they become gainfully employed .

5. Family labour — The construction industry in Ghana remains highly labour-intensive, with many homeowners engaging family members and relatives in the construction of their houses . The use of family labour — masons, carpenters, plumbers, electricians — significantly reduces cash expenditure .

Occupancy Before Completion

A common practice is moving into unfinished homes before completion. This is driven by the inability to afford rising rental costs, the desire to avoid ongoing rent payments, and the strong cultural values associated with owning a home . As one resident in Christian Village explained: “Before we came here, we had tiled only one room but after we moved in, we tiled all the rooms” .

The savings from not paying rent are redirected toward completing the house . Some self-builders also rent out parts of their unfinished homes to generate funds for completing their projects .

Part 4: The Economic Impact — A 7.3% GDP Contribution

The housing sector, largely driven by self-building, is estimated to contribute 7.3 per cent to Ghana’s GDP . This is a significant contribution, comparable to other major sectors of the economy.

Employment Impact

The self-build housing sector generates employment across multiple interconnected economies :

Land economy — Chiefs, traditional leaders, surveyors, land agents, cadastral firms, printing firms

Input economy — Building materials manufacturers and suppliers, truck operators, sand/stone suppliers, quarry operators, cement manufacturers, wholesalers and retailers 

Construction economy — Artisans (plumbers, carpenters, masons, electricians, steel benders, welders, painters, tile layers), labourers

Output economy — Real estate agents, property managers

The 75 per cent of housing sector employment in the informal sub-sector is likely underestimated, given the large number of people operating directly and indirectly as informal operators in the housing sector .

Part 5: The Challenges — Problems with Unregulated Incremental Building

Infrastructure Gaps

The research by CDD-Ghana, LSE, and the University of Ghana identified significant challenges with unregulated self-building . These include:

• Limited access to land

• Poor infrastructure — inadequate roads, water supply, drainage systems

• Delays in completing housing projects

• Weak enforcement of formal planning regulations

Unregulated self-building can lead to community expansion without the necessary infrastructure and services, making life difficult for residents . Buildings may go up without supporting infrastructure, leading to problems such as flooding and poor sanitation .

Formal Policy Gaps

Despite the dominance of incremental housing, there is no national policy that directly supports it as a legitimate and strategic approach to housing development . The research team has called on Municipal and District Assemblies to work closely with traditional authorities to ensure land is reserved for public infrastructure such as roads, schools, and markets as communities expand .

A study on half-plot development in Kumasi found that urban planning responses to this phenomenon appear “weak and inefficient” . This creates a situation where non-compliance with planning regulations results in unguarded developments that threaten city sustainability .

Part 6: The Call for Policy Support

Recognition as a Viable Alternative

The 2025 study in Cities concludes that incremental housing “should be recognised as a viable alternative housing approach that warrants policy support and financial backing from formal housing institutions” . The authors argue that “housing finance institutions need to develop and promote loan products that are suitable for facilitating the IH process” .

What Policy Support Could Look Like

ASJ Conclusion

Incremental housing is not a failure of the housing system. It is the housing system. With 90 per cent of Ghana’s housing stock built through self-building, contributing 7.3 per cent to GDP and employing hundreds of thousands of people, the phenomenon is too significant to ignore .

The research evidence challenges the idea that incremental housing is merely a product of market failure. Builder control factors — the desire to manage the construction process — are the primary drivers, suggesting that even if mortgage markets were to improve, incremental housing would persist .

The challenges are real: lack of formal policy support, infrastructure gaps, weak enforcement of planning regulations, and the financial strain of multi-year construction timelines . But the solution is not to dismiss incremental housing as an inefficient approach. It is to recognise it as a legitimate alternative — and to design policies and financial products that support it .

Quick Reference: Incremental Housing at a Glance

Last Updated on June 19, 2026 by Samuel Kwame Boadu

Samuel Kwame Boadu

Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.

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