KEYIR NEWS:- The rapid urban growth has created a severe housing shortage, with the country’s urban population surging by 160 per cent over the past 15 years.
Yet, during this period, private developers have delivered just 21,000 new homes, a fraction of the estimated 486,000 units needed annually to meet demand.
In response, the government has unveiled a sweeping overhaul of real estate regulations, aiming to tackle long-standing challenges in a sector rife with opacity and speculation.
The draft reforms, presented at the 2025 Ethio Real Estate Summit in Addis Ababa, seek to improve transparency by linking presale revenues to bank guarantees and escrow accounts.
This tiered financial control system is intended to safeguard homebuyers and reduce the risk of speculative practices that have contributed to market volatility.
The Ministry of Urban & Infrastructure, the architect of the proposals, argues the changes will help attract much-needed foreign investment and expand financing options, while strengthening consumer protections.
The reforms allow foreign investors to hold up to 49 per cent equity in joint real estate ventures, marking a significant shift aimed at drawing hard currency into the sector.
However, developers and industry insiders caution that the reforms alone may not ease the acute affordability crisis.
“Unless the government addresses the high cost of land leases and expensive building materials, these regulatory changes won’t solve the housing shortage,” warns Alemayehu Ketema, head of the Ethiopian Real Estate Developers Association.
Construction costs have skyrocketed, now 43 times higher than two decades ago, and limited access to mortgage financing further restricts many Ethiopians from entering the housing market.
As Addis Ababa’s skyline rises, so does the pressure on policymakers to strike a delicate balance between regulation and growth, transparency and affordability.
For now, the urban housing future remains uncertain, hinging on how these reforms are implemented and whether they can genuinely bridge the widening gap between demand and supply.