Housing Finance in Eritrea

Overview

This profile is also available in French here.

To download a pdf version of the full 2019 Eritrea country profile, click here.

Eritrea is located on the coast of the Red Sea, bordering the countries of Ethiopia, Sudan and Djibouti. The country’s population is estimated at 5.9 million, and though poverty levels remain high, the country’s government has identified education and human capital formation as national policy priorities.

In 2018, Eritrea’s GDP growth rate was registered at 4.2 percent, driven mainly by mining construction. Additional developments in energy, irrigation and roads have also been identified as key drivers of GDP growth. Eritrea’s economy is largely driven by mining and subsistence agriculture. This exposes the country’s production to risks associated with climate shocks, most notably droughts.

The financial and banking sector in the country is predominantly state controlled, though there is a prevalence of informal financial markets. The formal banking sector is 100 percent state-owned and regulated by the Bank of Eritrea. There are three banks in the country: The Housing and Commercial Bank of Eritrea, Eritrean Investment and Development Bank and the Commercial Bank of Eritrea. The Housing Bank of Eritrea was established in 1994 to address the acute housing need in the country by providing mortgages to individual customers and for financing housing complexes.

Housing demand in the country far outstrips supply, and this has led to the emergence of unlicensed housing developments. Data on the housing market is also scant, which hampers investment action as well as informed price setting within the real-estate sector. The country’s property sector is dominated by foreign developers, who mainly develop high-end residential properties.

The regulation of housing markets in Eritrea is limited, which exposes residents and investors to arbitrary confiscation of property or land. From the Ease of Doing Business indicators, according to the World Bank Doing Business 2019 Report, out of 190 economies, Eritrea was ranked 187 in starting a business, 186 in dealing with construction permits, 180 on registering property, and 174 on protecting minority investors. Notwithstanding these challenges, Eritrea presents some opportunities for investment. These would require collaborative investment and partnerships between private sector actors and the State.

Find out more information on the housing finance sector of Eritrea, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2019 edition, which has up-to-date profiles for 55 African countries.

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