Should You Buy Land Now or Save to Build Later? A Practical Guide for Ghanaian Buyers

In Ghana, owning a home is a major financial milestone. For most people, it is a symbol of stability, generational wealth, and personal achievement. Yet one question continues to challenge potential homeowners: Is it better to buy land now and build slowly over time, or save money first and build later when you can afford more?

This dilemma is common among young professionals, entrepreneurs, individuals living abroad, and families planning long-term investments. With rising land prices, unstable inflation, and increasing construction costs, the decision is not as simple as it used to be.

This editorial by The High Street Business breaks down the financial, economic, and practical factors to consider so you can make the best choice for your situation.

The Rising Cost of Land in Ghana

Land prices in Ghana rarely remain stagnant. In urban and peri-urban areas—Accra, Kumasi, Takoradi, Kasoa, Dodowa, Amasaman—prices tend to rise consistently. Several factors contribute to this trend:

• Urban expansion and population growth

• Increased demand from developers and diaspora buyers

• Limited titled land in prime areas

• Government infrastructure projects

A plot that sells for GH¢40,000 today could easily rise to GH¢60,000 or GH¢80,000 in a few years, depending on the location. This upward curve makes many people wonder whether buying land immediately is the safer financial move.

The Reality of Construction Costs in Ghana

Building materials—cement, iron rods, sand, stones, electrical fittings—do not remain the same price year after year. Inflation, exchange rate fluctuations, and global market shifts significantly influence costs.

For example:

• Cement prices may double over a five-year period.

• Roofing sheets and tiles often rise with the dollar rate.

• Labor costs increase as skilled workers charge more due to demand.

If you wait too long, the amount you save may not be enough to match rising construction costs. This creates a situation where the goalpost keeps shifting, making it harder to start building.

Option 1: Buying Land Now

Buying land now is a common strategy for long-term planners. Here are the advantages and the challenges.

Benefits of Buying Land Early

1. You Lock In Today’s Price

This is the biggest advantage. Once you purchase land, you are protected from future price increases. If the land value grows, you benefit directly.

2. Your Investment Appreciates

Land value almost always rises, especially if:

• A new road is constructed

• Schools, markets, or residential estates develop nearby

• The area becomes more populated

Even if you don’t build immediately, your land becomes an appreciating asset.

3. You Build at Your Own Pace

Most Ghanaians build small parts over many years:

• Foundation

• Blockwork

• Roofing

• Finishing

Buying land first gives you the freedom to build as your finances allow.

4. It Provides Emotional Security

Owning land gives many people peace of mind. You know that no matter what happens, you have secured a piece of the future.

Challenges of Buying Land First

1. Risk of Land Litigation

Buying without proper documentation can lead to disputes or losses. Due diligence is critical.

2. No Immediate Use

Unless you build or develop the land, you may not directly benefit from it for years.

3. Security Risks

Vacant land requires monitoring. Some owners lose their plots to encroachers if not well protected.

Option 2: Saving to Build Later

Some people prefer to build only when they have enough money—either saved or financed. Here are the pros and cons.

Benefits of Saving First

1. You Build Faster

When you accumulate enough capital, you can complete your project in a shorter time—sometimes within a year or two.

2. Less Stress

Instead of dealing with piecemeal construction, you can focus on a continuous and organized building process.

3. Better Budgeting

You have a clearer understanding of total costs, avoiding unnecessary delays and inflation-related surprises.

Challenges of Saving First

1. Land Prices May Rise Faster Than Your Savings

This is the biggest danger. You may save GH¢20,000 a year, but if land prices rise by GH¢25,000 a year, you are falling behind, not progressing.

2. Construction Costs Change Constantly

Even if you save, by the time you’re ready, building materials may cost 30–60% more.

3. Inflation Devalues Your Money

Money kept in a regular savings account can lose value if inflation spikes. GH¢100,000 today will not have the same purchasing power in five years.

4. Pressure to Take Loans

If costs rise sharply, you may have to rely on expensive bank loans or salary advances.

Key Questions to Help You Decide

1. How Stable Is Your Income?

If your income is unpredictable, buying land early helps you secure a big portion of your home project before your finances fluctuate.

2. Do You Know Where You Want to Live Long-Term?

If you are unsure about your future location, saving may be safer than committing to land you may not use.

3. How Fast Are Land Prices Rising in Your Target Area?

Research the area. Some locations experience rapid price hikes, making early purchase critical.

4. Are You Good at Saving Money?

If you struggle to save consistently, investing in land now forces you to lock money away productively.

5. Are You Risk-Tolerant?

Buying land requires due diligence. If you are comfortable navigating documentation, land purchase offers long-term value.

Which Option Is Smarter Financially?

Most Financial Advisors Agree: Buy Land Early If Possible

Here’s why:

• You lock in a permanent asset at today’s cost.

• Land appreciates faster than most savings accounts grow.

• You avoid future price hikes.

• You can build gradually without pressure.

Saving first works best for high-income earners, disciplined savers, and people planning to build in less volatile areas.

For the average Ghanaian, buying land now and building later is often the more financially secure strategy—provided due diligence is done thoroughly.

Your Decision Should Match Your Financial Reality

Both options have benefits, but your final choice should depend on:

• Your income level

• Your discipline with savings

• Your risk tolerance

• Market trends in your preferred area

• Long-term life plans

Land in Ghana will likely continue rising in price. If you can afford to buy now—even if you won’t build soon—your future self may thank you for making a smart early investment.

FAQs

1. Is it better to buy land or save first?

Buying land early is often smarter because prices rise quickly, but saving works if you have strong income and discipline.

2. Will land prices in Ghana keep rising?

Most likely, especially in areas experiencing development, urbanization, and infrastructure expansion.

3. Is building slowly a good strategy?

Yes. Many Ghanaians build gradually as funds allow, avoiding loans and debt pressure.

4. What should I check before buying land?

Title documents, site plan, land ownership history, zoning, and litigation status.

5. How can I protect my land before building?

Fence the land, mount a “No Trespassing” sign, visit periodically, or use caretakers.

Source: The High Street Business