Housing Finance in Ethiopia


Ethiopia has a growing 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 Ethiopia is 14 percent, as of September 2016, and requires at least a 10 percent down payment. The cheapest newly built house by a developer recorded by CAHF is US$ 7 397, which is for a 55 square metre unit. Cement prices are higher than the continental average, at US$ 14 for a 50-kilogram bag.

With an urbanisation rate of 4.78 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 government has engaged in ambitious urbanisation programme, financing the construction and purchase of housing with its Integrated Housing Development Program (IHDP). This is an attempt to address the estimated one-million-unit urban backlog. Dangote Cement recently opened a factory in the country, which will likely decrease cement prices. 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 Ethiopia can afford.

Find out more information on the housing finance sector of Ethiopia, 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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