Housing Finance in Eritrea


This profile is also available in French here.

To download a pdf version of the full 2023 Eritrea country profile, click here.

Eritrea has a population of 3.6 million, an annual population growth rate of 1.3%, and an unemployment rate of 7.9%, based on 2019 figures. Eritrea has one of the lowest urbanisation rates in the world because of a lack of employment and housing opportunities in urban areas. The financial services sector in Eritrea is small and continues to be dominated by three commercial banks (the Commercial Bank of Eritrea, the Eritrean Investment and Development Bank, and the Commercial Bank of Eritrea). Eritrea’s microfinance sector is largely underdeveloped, taking the form of rotating credit groups that mostly charge high interest rates.

High poverty and unemployment greatly impair home affordability in Eritrea. Renting or buying a house is difficult for citizens due to low incomes and a lack of diversity in employment opportunities. However, the government appears to be making efforts to develop affordable housing. In 2019, Eritrea was reported to have built 50 000 residential units for delivery in 2022.The high poverty rates have negative implications for property markets as people have low disposable incomes and impaired purchasing power. Land in Eritrea is state-owned and can be confiscated at any time by the state for political reasons or by corrupt state actors.

Eritrea does not appear to present substantial opportunities for active foreign investor participation given the nature of the ruling elite government’s control over private businesses and real estate. Restrictions also increase the risk of low investment returns. On a positive note, the size of the Eritrean diaspora presents an opportunity for investors to tap into because this segment of the population has relatively higher disposable incomes and a cultural incentive to own a house in their home country. Residential properties could be developed specifically to target the diaspora.

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 2023 edition, which has up-to-date profiles for 55 African countries.

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