Re-evaluating the drivers of urban housing affordability from a construction cost perspective: evidence from the emerging real estate market

Abstract

Abstract Rapid urbanisation in Sub-Saharan Africa has intensified housing affordability crises, yet drivers remain poorly understood. This study tests whether construction material costs determine property prices in Kumasi, Ghana, using a mixed-methods design (139 occupants, 12 experts). Regression and robustness checks reveal that for residential properties, the relationship is negligible (R2 = 0.001, p = 0.634); material cost fluctuations explain <0.1% of price variation. For commercial properties, a significant positive relationship exists (R2 = 0.374, p = 0.003). Land costs (GHȼ 60,000–200,000/plot), locational premiums, and demand-supply dynamics dominate residential pricing. These findings are transferable to emerging economies with weak land governance and speculative markets. Material cost mitigation policies are ineffective. Policy must shift to land market regulation, spatial planning, tenant protection, and building standards, advancing Sustainable Development Goals(SDGs) SDGs::3, 8, and 11. The paper provides the first regression-based falsification of the cost-push hypothesis in Ghana, demonstrates residential-commercial divergence, and quantifies the affordability-durability trade-off.