Housing Finance in Eritrea


Eritrea has a limited housing finance sector. As the mortgage market does not yet meet the breadth of the population who might afford a mortgage, most households still finance their housing independently, with savings or non-mortgage credit.

The lowest recorded interest rate on a mortgage in Eritrea is 12 percent, as of September 2016, and requires at least a 25 percent down payment. The cheapest newly built house by a developer recorded by CAHF is US$ 90 901, which is for a 125 square metre unit. Cement prices are significantly higher than the continental average, at US$ 23.80 for a 50-kilogram bag.

With an urbanisation rate of three percent, demand for affordable housing will remain strong, both for rental and purchase. Housing microfinance will play an important role in increasing the supply of housing, and efforts to increase access should be undertaken. The Housing and Commerce Bank of Eritrea (HCBE) offers loans for construction and the purchase of existing homes, and finances its own large-scale housing construction programme. The laws of Eritrea do not allow for collateral, limiting mortgage market development. With a good macroeconomic environment, sound policy, better data and increased access to affordable credit, an enabled housing market can increasingly provide housing that the average household in Eritrea can afford.

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 2018 edition, which has up-to-date profiles for 54 African countries.

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