This paper investigates housing transformation, the rent gap and gentrification in compound houses in Bantama, a sub-metro in Ghana’s second-largest city, Kumasi. It argues that the ongoing housing transformation has altered the ‘classic’ features of compound houses, namely the dwelling unit, the use of shared space and the socio-demographic profile of households. It demonstrates that the physical transformation of compound houses predominantly involves the modification of dwelling units with shared facilities in compound houses into apartments where tenants have exclusive access to bathrooms, toilets, kitchens and electricity meters. Following such transformation, landlords obtain the rental power to capture at least 100 percent uplift in rents payable. There is evidence that the traditional form of housing that has, for many decades, provided shelter to low-income households is undergoing gentrification. The paper concludes by reflecting on the potential consequences of this transformation and makes a case for urgent policy intervention in the ongoing transformation of compound houses.