The fastest growing industry – how did it commence?
Witnessing the rapid growth of the real estate industry in Ethiopia, it would be difficult not to acknowledge that it has reached a significant milestone. Sunshine Real Estate paved the way in 1984 GC, with Ayat Real Estate and a few others following suit in the ensuing decades. The industry began to thrive in the late 1990s and early 2000 GC, expanding exponentially after the government introduced market-oriented lease laws in 2002 to incentivize the construction of condominiums. Between 2003 and 2010, around 124 developers were granted leases for 550 hectares of land.
Today, there are approximately 630 real estate investments throughout the country. Initially, real estate developments were concentrated in Addis Ababa, with most housing constructions on the city’s outskirts, such as CMC, Summit, and Ayat. The original site chosen by Ayat Real Estate for housing has since been popularly referred to simply as ‘Ayat’. Developers have also expanded their services to other metropolitan cities in Ethiopia.
According to the Centre for Affordable Housing Finance Africa (CAHF), the real estate sector in Ethiopia has expanded by an 8.2% growth rate in the last ten years. The industry has also contributed to 12.5% of the GDP growth in the last decade. The IMARC Group estimates that the real estate industry worldwide will grow by 5.2% by 2030. The real estate market is projected to be a $3.81 trillion business sector in 2023.
Overall, despite its challenges, the real estate industry is burgeoning and expanding. With a population of over 100 million and a pressing need for housing in Ethiopia, the industry certainly has a bright future. In addition to the significant value and growth, a critical question remains: How many people can actually afford the prices of real estate homes?