Assessment of housing demand and feasibility of establishing real estate business in Ethiopia

Abstract

Ethiopia’s fastest growing urban centers are challenged by highly growing level of demand for housing. The essential question is how can the country provide housing units in an efficient and affordable fashion to accommodate growing demand from businesses and individuals for diverse uses? Thus, the target of this study was to access housing demand and therefore the viability of establishing real-estate business in Ethiopia. Data were collected by review of related literature and documents like proclamations, regulations, directives and government housing plan and procedures. The finding indicates that, even as there are no proper information on new houses constructed or new residential construction permissions issued every year, World-Bank 2019 file propose that call for brand spanking new city housing a characteristic of recent city family formation and the need to improve the present housing stock in a way exceeds the contemporary delivery of housing. Accordingly, an estimated 1.2 million housing backlog exists only in the capital city, Addis Ababa, with a projected demand of 655,800 housing units during 2015-2025, far exceeding the estimated annual supply of housing of about 165,000 units nation-wide. The main challenge to the sector is lack of access to affordable land and therefore the widely practiced market-oriented land management system. To conclude, a close look at the government policy and existing mismatch between supply-demand for housing in the country reveals that the sector is viable for businesses to engage in. Key words: Demand, developer, supply, housing, real-estate, business.