City faces continued housing shortages as it expands government, private-sector and cooperative construction
Addis Ababa is still carrying nearly 30 billion birr in outstanding housing-related debt, a burden that city officials say continues to constrain the financing of new condominium projects.
Addressing the Addis Ababa City Council, Mayor Adanech Abiebie said the administration inherited more than 60 billion birr in liabilities connected to condominium housing projects. She said around 60 billion birr has since been repaid, including accumulated interest, but nearly 30 billion birr remains outstanding.
According to the mayor, the outstanding debt has made it difficult for the city to secure new commercial bank loans for housing construction. Financing obtained during the current administration has largely been used to complete condominium projects that had already been started rather than launch large-scale new developments.
City Shifts Away From Bank-Funded Construction
The city is increasingly financing new housing projects through government treasury allocations and its own revenues.
The administration is also negotiating with the Commercial Bank of Ethiopia, which holds the majority of the city's housing-related debt, over payment mechanisms that would allow condominium savers to purchase government-funded housing through structured payments.
The shift comes as Addis Ababa continues to face a substantial gap between housing demand and supply.
Mayor Adanech said millions of residents remain registered under public housing programs, while population growth, urban migration, and increasing demand among young residents continue to add pressure to the market.
Around 270,000 condominium units had originally been planned to serve registered applicants, but the city says demand continues to significantly exceed available supply.
480,000 Housing Units Added in Five Years
Despite the ongoing shortage, the city administration says Addis Ababa has increased its overall housing supply by approximately 480,000 units over the past five years.
Of these, around 139,000 were condominium units delivered to registered savers, including projects that had remained stalled for years before construction resumed.
Approximately 106,000 condominium units were transferred through two lottery rounds conducted since 2019.
The city has also expanded urban renewal projects targeting deteriorated housing areas that lack adequate sanitation and sewer infrastructure.
According to the administration, around 46,000 housing units have been constructed through these redevelopment efforts. Some have been allocated to residents displaced by redevelopment, while others have been designated for vulnerable groups and affordable rental housing.
More Than 100,000 Units Under Development
The city says housing construction is now continuing through government-funded projects, public-private partnerships, cooperatives, private developers, and individual homebuilders.
Approximately 50,000 housing units are currently under construction through government budget financing, while another 55,000 units are being developed through agreements with private developers.
In total, the mayor said approximately 105,000 homes have been started through these two channels.
The administration has identified several major development sites, including:
- Akaki Worqu Sefer
- Akaki Gelan Gura
- Tulu Dimtu
- Gerji
- Seba Dereja
- Dejach Wube
- Qecheltira
The city is also expanding cooperative housing. According to the mayor, 119 housing cooperatives entered construction during the current Ethiopian fiscal year, representing 13,630 housing units.
A separate teacher housing program has more than 630 units under construction.
Private real-estate developers are currently developing approximately 3,273 housing units, while individual residents are constructing another 20,000 homes.
Overall, the administration says nearly 166,000 housing units are currently under construction across Addis Ababa.
Housing Prices Face Rising Construction Costs
The city also acknowledges that new condominium units cannot be offered at the same savings rates established 15 or 20 years ago.
Mayor Adanech said construction costs have increased significantly, making it impossible to provide new units at historical savings rates. The city is therefore working with financial institutions on mechanisms intended to allow buyers to pay for government-funded housing over time.
The administration says registered condominium savers will continue to receive priority in future allocations.
City Sets Long-Term Housing Target
The administration has also set an ambitious long-term target of constructing 100,000 houses annually under its ten-year roadmap.
The mayor said the city expects increased construction by both government and private-sector developers to gradually improve housing supply and contribute to greater stability in the market.
She also said the city has already observed signs of stabilization in real-estate housing sales and an increase in the supply of rental housing.
At the same time, the administration acknowledged continuing structural problems in the housing sector and said it would strengthen monitoring and regulation to address corruption and inefficiencies in housing delivery.