1. What effects would the new property taxes have on the real estate market?
    In 2023 the Addis Ababa city government made a massive increase on the “wall and roof” tax. By the end of 2023 another property tax is expected to be enacted. These taxes are expected to have a negative effect on transaction volume as well as on sale prices. While this could be a welcome news for some buyers, it will have a negative effect for everyone in the long term as rising prices are the main reason investment keeps on pouring into the sector.
  3. Why are real estate prices in Addis Ababa rising despite the country’s instability?
    The stability and economic opportunities in Addis Ababa have attracted a significant influx of people from other regions, driving up demand for housing. In addition, the large Ethiopian diaspora continues to invest heavily in the real estate sector with Addis Ababa being the preferred destination.
  5. What role does urbanization play in the soaring real estate prices?
    Ethiopia’s rapid urbanization has led to increased demand for housing and commercial spaces, exerting upward pressure on property prices. According to the CIA factbook Ethiopian urbanization rate is 4.4% (2020-2025).
  7. How does limited land supply impact real estate prices?
    The limited availability of land in Addis Ababa intensifies competition among developers, resulting in higher property prices. In previous years the government attempted to address this shortage by holding open bids for public city land to developers. This practice has been stopped for several years leaving private purchases as the only way for developers to get land.
  9. Why do inflation and weakening Birr affect real estate prices in Ethiopia?
    Inflation erodes purchasing power, while currency depreciation impact the cost of imported construction materials, both of which contribute to rising property prices.
  11. Are there alternative investment options in Ethiopia besides real estate?
    In as far as passive investment is concerned, owning real estate and cars remain the preferred method. The government is in the process of introducing a stock market in 2024 which will give investors an alternative vehicle to park their capital.
  13. Can foreigners buy real estate in Ethiopia?
    Foreigners can buy real estate if they have an investment license which will require a minimum investment of $150-$200,000 USD. A foreign citizen of Ethiopian origin can also buy real estate as long as they hold an ID commonly called Yellow Card or Ethiopian Origin ID.
  15. How would the new title deed transfer tax affect the real estate market?
    In 2023, the Addis Ababa city government increased the title deed transfer tax significantly. The actual percentage remains at 6% of the price of the property, but the way they calculate this price has significantly increased the tax amount. So much so that some buyers and sellers avoid going through the legal channel to transact. Instead, they sign a loan agreement and execute a power of attorney agreement on the property with the hope that at some point in the future this tax would become more reasonable. The long term effect of this tax remains to be seen, but in the short term, anecdotal evidence suggests it had a cooling effect on the number of transactions.
  17. How easy is it to get a mortgage in Ethiopia?
    It has always been very difficult to get a mortgage in Ethiopia, but in recent years it has become almost impossible. Even when it was available, banks rarely give more than 50% of the value of the property. As of October 2023, most banks have stopped advancing new loans including mortgages. If this continues for an extended period of time, it would seriously curtail investment to the sector.
  19. Is real estate development profitable in Ethiopia?
    On paper real estate development in Ethiopia is extremely profitable. As of October 2023, the construction of a building (not including land) is between 40,000 and 60,000 ETB per square meter. Developers are selling units between 80,000 and 150,000 ETB per square meter. However, there are significant challenges including costly bureaucracy, lack of financing options and rapidly rising cost of material and labor.
One thought on “Ethiopian Real Estate: 10 Frequently Asked Questions”
  1. Great article! Thank you!!

    These FAQs have been going through my mind for a while now. Thank you for answering them.

    When does the government allow repatriation of profits to foreign bank accounts? This is way overdue and will help kill the huge discrepancy between bank and street rates. For instance, the international developers (like Turkish companies) buy their USD from the street market.

    On a separate note, we need a platform to connect land owners and developers so they can co-develop a building in the country. Here is one Telegram group I came across:


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