Price and rental differentials in gated versus non-gated communities: the case of Accra, Ghana

Abstract

Gated communities have become part of a global lifestyle for most residents. The study extends the literature on this global phenomenon by investigating the impact of gated developments on property values and rents using Accra, Ghana, as our study area. Applying a propensity-score matching technique to 2620 housing transactions and 811 rental units, our results reveal that houses in gated communities sell at 42% and 48% more than non-gated properties. Additionally, property owners charge 48% more for rent in gated properties when compared to other non-gated houses in our sample. The sales premiums we find are larger than premiums documented in developed economies. The article provides nascent evidence about rental premiums in gated communities. We posit that the sales and rental premiums we observe in gated properties in Accra are driven by the need for quality housing services, prestige, personal security and security of tenure. This work should be of interest to real estate developers and policymakers.