· Addis Fortune
A Housing Promise Built on a Scheme That Reached a Tenth of Demand
Summary of the Addis Fortune report
Nearly 650,000 Ethiopians had been waiting for condominium homes under the 20/80 and 40/60 public housing schemes. Some have been paying into them for close to two decades. Now the government promises to build 1.5 million houses.
Key points
- Nearly 650,000 people wait for condominiums under the 20/80 and 40/60 schemes, and the government now promises 1.5 million houses.
- A World Bank study found that the condominium programme met about 10 percent of annual housing demand.
- Mortgages make up about 4.4 percent of banking-sector credit, the editorial says.
- The editorial argues that cheaper land, local building materials and better regulation matter as much as new finance.
Real.et analysis
Addis Fortune's editorial argues that the government's promise of 1.5 million new houses rests on a system that has never met demand. It cites a World Bank study that found the condominium programme met about 10 percent of annual need.
What this means for buyers
The editorial gives buyers a clear message: do not wait for a single programme to solve your housing need. The numbers it cites show why. The country needs about 486,000 new homes a year, but supply ran at about 165,000. The condominium programme built 383,000 units in total. Nearly 650,000 savers still wait under the 20/80 and 40/60 schemes.
If you are one of those savers, keep your registration and payments current. But plan for a long wait, and compare it with other routes:
- Resale condominiums. You can buy a finished unit from an owner today. You pay a market price, but you get the home now.
- Private developers. The editorial notes that developers build where the economics work. They tend to avoid the low-income end of the market.
- Cooperatives. The editorial says housing cooperatives mostly served better-off households. Members must deposit half the construction cost in a blocked account at the Commercial Bank of Ethiopia before they register.
What this means for mortgage borrowers
The editorial welcomes the planned mortgage refinancing company with 100 billion Br in capital. But it argues that a cheaper loan cannot make an expensive house affordable. Only 9.4 percent of homeowners in Addis Ababa, Adama and Mekelle had borrowed to buy. More than half of those borrowed from relatives or friends. So most buyers still need large savings.
The main point of the piece is that housing costs come from land, materials, permits and taxes, not only from finance. It says building permits cost 14.4 percent of building value, against 8.8 percent in sub-Saharan Africa. Until those costs fall, new loan products will help mostly the households that can already afford to buy.
Our condominium guide explains the 20/80 and 40/60 schemes and the resale market. Our guide to the Addis Ababa Housing Development Corporation explains the city body behind the programme. Browse condominiums for sale to compare resale prices, and read our mortgage guide to see what banks lend today.