Spain Is Marching Over Housing. Should Ghana Be Worried?

This month, tens of thousands of people filled the streets of Madrid and other Spanish cities. The spark was the eviction of Maricarmen, an 87-year-old pensioner removed from her flat. The anger behind it has been building for years. Rents in Spain have nearly doubled in a decade, and the Bank of Spain estimates the country is about 700,000 homes short.

For anyone watching from Accra, the obvious question is whether something like this could happen here. The honest answer is yes and no. Ghana is very unlikely to have Spain’s kind of crash. But we already have our own kind of housing crisis, and it is hurting people right now.

How Spain got here

Spain’s story has two acts.

The first was a classic bubble. After Spain joined the euro, borrowing became cheap and banks lent freely. In 2006 alone, Spain started building more homes than Germany, France and Italy combined. Prices rose about 150% in a decade, and household debt more than doubled relative to income. Families borrowed heavily because everyone believed prices could only go up.

Then 2008 arrived. Credit dried up, builders went bust and bad loans piled up on bank balance sheets until Europe had to step in with a rescue. Unemployment passed 26%, and more than half of young people were out of work. Hundreds of thousands of families lost their homes, and under Spanish law many still owed the bank money afterward.

The second act is the one playing out today. After the crash, Spain almost stopped building. Construction collapsed and never fully recovered, while the population kept growing. Investment funds bought up distressed property, and tourist rentals ate into city housing. A country that once built too many homes now builds far too few. The pain has moved from homeowners in debt to renters who cannot keep up.

Why Ghana won’t copy Spain’s crash

Spain’s crash needed one key ingredient: a mountain of mortgage debt. Ghana simply doesn’t have it. Mortgage lending here is less than 1% of GDP, while Spain’s was well over 50% at its peak.

Most Ghanaians build the way our parents did: a few bags of cement at a time, paid for with savings, family support and money from relatives abroad. A house can take five, ten or fifteen years to finish. That approach is slow and frustrating, but it also means a drop in property prices cannot bring down the banks. There is no wave of mortgage defaults waiting to happen, because most homes were never bought on credit.

The crisis we already have

That is not the same as saying Ghana is fine.

The 2021 census put our housing deficit at 1.8 million units. That was an improvement on 2010, but the minister now says the gap has likely widened again as the population grows. At the same time, about one in eight housing structures counted in the census was empty. Much of the new building in Accra and Kumasi targets the top of the market, with apartments priced in dollars for buyers abroad, while teachers, nurses and young workers struggle to find a decent room.

Then there is rent advance. Ask any young person who has just started working, and they will tell you the hardest part is not the monthly rent but the lump sum. Landlords routinely ask for one or two years upfront. That is actually illegal. The Rent Act of 1963 caps advance rent at six months, and since April this year Rent Control has started prosecuting landlords who break it. Whether that enforcement holds will matter a lot for ordinary tenants.

The economy has given us some breathing room. Inflation has dropped sharply from the painful levels of 2023 and 2024, and interest rates have come down. That helps people who are building slowly, because cement and iron rods stop jumping in price every month. But the cedi has come under pressure again recently, and building costs follow the currency closely.

The lesson from Madrid

Spain shows that a housing crisis can change shape. Theirs started as too much debt and too many houses and turned into too few houses and too much rent. Ghana’s version has never been about debt. It is about supply in the wrong places, at the wrong prices, with rules that only now are starting to be enforced.

Ghana probably won’t see empty ghost towns or a banking collapse. The real danger is quieter. A generation of young Ghanaians could spend years saving just to rent a room, while new apartments nearby stay empty.