Authored by the expert who managed and guided the team behind the Ethiopia Property Pack
Yes, the analysis of Addis Ababa's property market is included in our pack
The Addis Ababa property market in 2026 is shaped by cooling inflation, ongoing urban expansion, and a unique cash-driven buying environment that sets it apart from other African capitals.
This article breaks down current residential property prices in Addis Ababa, recent price movements, and what the next five to ten years might look like for buyers and investors.
We constantly update this blog post as new data becomes available, so you can always find the latest figures here.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Addis Ababa.
Insights
- Addis Ababa's price-to-income ratio stands at 56, the highest in Africa, making homeownership a stretch for most local earners despite strong housing demand.
- With the National Bank of Ethiopia's policy rate at 15%, mortgage financing remains expensive and over 80% of residential transactions are completed in cash.
- The birr has depreciated over 200% against the dollar since mid-2024, yet USD-denominated property prices have stayed relatively flat, meaning savvy diaspora buyers can lock in value.
- Addis Ababa adds roughly 250,000 new residents each year (4.4% growth), yet housing construction falls short by an estimated 140,000 units annually, keeping price pressure firmly upward.
- Gross rental yields in prime Addis Ababa neighborhoods like Bole and Kirkos currently hover around 9% to 12%, among the highest in any major African city.
- Townhouses and row houses are the fastest appreciating property type in Addis Ababa in 2026, rising 10% to 15% annually due to scarcity and family-upgrade demand.
- Ethiopia's inflation dropped from 30% in 2022 to around 11% by late 2025, providing a more stable backdrop for property valuations than in previous years.
- Neighborhoods along newly upgraded road corridors, such as Lebu and CMC, are seeing price jumps of 15% to 20% as commute times shrink.
- The government's announced plan to allow foreigners to own property has already lifted sentiment in prime areas like Bole, even before full implementation.
What are the current property price trends in Addis Ababa as of 2026?
What is the average house price in Addis Ababa as of 2026?
As of early 2026, the median asking price for a residential property in Addis Ababa sits at roughly 15 million Ethiopian Birr for apartments (about $97,000 or €93,000) and around 31 million Birr for houses and villas (about $200,000 or €192,000).
In terms of price per square meter, mainstream Addis Ababa properties trade between 190,000 and 260,000 Birr per sqm ($1,200 to $1,700 or €1,150 to €1,650), while prime and luxury units in areas like Bole or Kazanchis can reach 260,000 to 360,000 Birr per sqm ($1,700 to $2,300 or €1,600 to €2,200).
The realistic price range that covers roughly 80% of property purchases in Addis Ababa in 2026 runs from about 8 million Birr ($52,000 or €50,000) for a modest apartment in an emerging area to around 50 million Birr ($320,000 or €310,000) for a well-located house or upscale apartment, though luxury villas can exceed this substantially.
How much have property prices increased in Addis Ababa over the past 12 months?
Property prices in Addis Ababa increased by an estimated 8% to 15% in local Birr terms over the past 12 months, depending on the property type and neighborhood.
Looking at specific categories, apartments and condos rose by roughly 8% to 13%, houses and villas appreciated by about 7% to 12%, and townhouses led the pack at 10% to 15%, reflecting their scarcity and strong family demand.
The single most significant factor behind this price movement was Ethiopia's cooling inflation combined with persistent housing supply shortages, as construction has not kept pace with a city adding over 250,000 residents annually.
Which neighborhoods have the fastest rising property prices in Addis Ababa as of 2026?
As of early 2026, the neighborhoods with the fastest rising property prices in Addis Ababa are Yeka (including CMC, Megenagna, and Gurd Shola), Bole (particularly Atlas and areas near Edna Mall), and Kirkos (especially the Kazanchis pocket).
These top neighborhoods are experiencing annual price growth of approximately 12% to 18% in Birr terms, with some corridor-adjacent pockets in CMC and Lebu seeing even sharper jumps of up to 20% where road improvements have recently completed.
The main demand driver is improved infrastructure and connectivity, as road expansions by the Addis Ababa City Road Authority have slashed commute times, making these areas far more attractive for both residents and investors seeking rental returns.
By the way, you will find much more detailed price ranges across neighborhoods in our property pack covering the real estate market in Addis Ababa.
We have made this infographic to give you a quick and clear snapshot of the property market in Ethiopia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which property types are increasing faster in value in Addis Ababa as of 2026?
As of early 2026, the ranking of property types by appreciation rate in Addis Ababa goes: townhouses and row houses first, followed by mid-to-upper apartments and condos in prime areas, then villas and standalone houses.
Townhouses are appreciating at roughly 10% to 15% annually in Birr terms, outpacing other residential formats in the city.
The main reason townhouses are outperforming is a combination of scarcity (fewer available units), strong demand from growing families looking for more space, and the "new-build premium" that commands higher prices for recently constructed homes with modern finishes.
Finally, if you're interested in a specific property type, you will find our latest analyses here:
- How much should you pay for a house in Addis Ababa?
- How much should you pay for an apartment in Addis Ababa?
What is driving property prices up or down in Addis Ababa as of 2026?
As of early 2026, the top three factors driving property prices in Addis Ababa are the persistent housing supply shortage, ongoing infrastructure improvements, and diaspora investment demand fueled by currency hedging motives.
The single factor with the strongest upward pressure is the structural housing deficit, as the city's population grows by over 4% annually while formal housing construction lags by an estimated 140,000 units per year, keeping demand well ahead of supply.
If you want to understand these factors at a deeper level, you can read our latest property market analysis about Addis Ababa here.
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What is the property price forecast for Addis Ababa in 2026?
How much are property prices expected to increase in Addis Ababa in 2026?
As of early 2026, property prices in Addis Ababa are expected to increase by approximately 7% to 12% in Birr terms over the course of the year, with the range varying by property type and location.
Forecasts from different analysts and market observers generally fall within a 6% to 14% band, with more conservative estimates around 6% to 8% assuming tighter credit conditions, and more optimistic views around 12% to 14% if diaspora demand accelerates.
The main assumption underlying most price increase forecasts is that Ethiopia's inflation will continue to decline toward 10% while the housing supply shortage persists, creating moderate but steady upward pressure on property values.
We go deeper and try to understand how solid are these forecasts in our pack covering the property market in Addis Ababa.
Which neighborhoods will see the highest price growth in Addis Ababa in 2026?
As of early 2026, the neighborhoods expected to see the highest price growth in Addis Ababa are Yeka (especially CMC, Megenagna, and Gurd Shola), selected south and southeast corridors like Lebu, and well-managed pockets within Kirkos near commercial centers.
Projected price growth for these top neighborhoods ranges from 12% to 18% in Birr terms for 2026, with some corridor-adjacent blocks potentially exceeding 20% if road projects complete on schedule.
The primary catalyst driving expected growth is the combination of road infrastructure upgrades reducing commute times and the arrival of new mid-market apartment stock that attracts both owner-occupiers and investors seeking rental income.
One emerging neighborhood that could surprise with higher-than-expected growth is Ayat (in the Yeka sub-city), where relatively affordable entry prices and rapid development activity are attracting middle-income buyers priced out of central Bole.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Addis Ababa.
What property types will appreciate the most in Addis Ababa in 2026?
As of early 2026, townhouses and row houses are expected to appreciate the most in Addis Ababa, followed closely by well-located apartments in prime-access neighborhoods.
Projected appreciation for townhouses sits at roughly 10% to 15% in Birr terms for the year, driven by their scarcity and strong demand from families seeking more living space.
The main demand trend driving this appreciation is the "family upgrade" cycle, as households with growing incomes move from apartments into townhouses that offer private outdoor space and multiple floors, yet remain more affordable than standalone villas.
The property type expected to underperform in Addis Ababa is the high-end luxury villa segment, which faces softening demand due to limited buyer pools and prolonged sales cycles in a market where most transactions are cash-based.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Ethiopia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
How will interest rates affect property prices in Addis Ababa in 2026?
As of early 2026, high interest rates are keeping Addis Ababa largely a cash-buyer market, which limits bidding wars but also keeps rental demand strong since many households cannot afford to purchase.
The National Bank of Ethiopia's policy rate stands at 15%, and commercial mortgage rates typically range from 15% to 17%, which means financing is expensive and unlikely to ease significantly in the near term.
A 1% change in interest rates in Addis Ababa has a relatively muted effect on overall prices compared to mature markets, because so few buyers rely on mortgages, but it does influence the quality gap, as well-located, high-quality buildings sell while mediocre properties sit longer and require price negotiation.
You can also read our latest update about mortgage and interest rates in Ethiopia.
What are the biggest risks for property prices in Addis Ababa in 2026?
As of early 2026, the three biggest risks for property prices in Addis Ababa are foreign exchange volatility that spikes construction costs, reform fatigue or fiscal shocks that undermine buyer confidence, and localized oversupply in certain new-build apartment clusters.
The risk with the highest probability of materializing is exchange rate volatility, as the Birr remains under pressure and any sharp depreciation would quickly translate into higher costs for imported building materials, squeezing developers and potentially causing project delays.
We actually cover all these risks and their likelihoods in our pack about the real estate market in Addis Ababa.
Is it a good time to buy a rental property in Addis Ababa in 2026?
As of early 2026, buying a rental property in Addis Ababa can be attractive for investors who select the right unit, as gross yields of 9% to 12% in prime neighborhoods rank among the highest in major African cities.
The strongest argument in favor of buying now is the structural rental demand: with mortgage rates at 15% to 17%, most residents cannot afford to purchase, creating a large and stable pool of tenants, especially for two-to-three bedroom apartments in Bole, Kirkos, or Yeka.
The strongest argument for waiting is the ongoing exchange rate uncertainty, as further Birr depreciation could erode USD-equivalent returns and increase the cost of any imported furnishings or renovations needed to keep properties competitive.
If you want to know our latest analysis (results may differ from what you just read), you can read our assessment on whether now is a good time to buy a property in Addis Ababa.
You'll also find a dedicated document about this specific question in our pack about real estate in Addis Ababa.
Buying real estate in Addis Ababa can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Where will property prices be in 5 years in Addis Ababa?
What is the 5-year property price forecast for Addis Ababa as of 2026?
As of early 2026, cumulative property price growth in Addis Ababa over the next five years is expected to range from 55% to 95% in Birr terms, translating to roughly 10% to 35% in USD terms depending on exchange rate movements.
The range of 5-year forecasts spans from a conservative scenario of around 55% cumulative growth (if inflation picks back up and reforms stall) to an optimistic scenario of 95% or more (if disinflation continues and foreign ownership rules are clarified).
Projected average annual appreciation over the next five years sits between 9% and 14% in Birr terms, reflecting continued urban demand pressure against constrained supply.
The key assumption most forecasters rely on is that Ethiopia will continue along its IMF-backed reform path, keeping inflation in the 10% to 15% range and avoiding major fiscal or political disruptions that would spook buyers.
Which areas in Addis Ababa will have the best price growth over the next 5 years?
The top three areas in Addis Ababa expected to have the best price growth over the next five years are the Yeka growth arc (CMC, Megenagna, Gurd Shola, Ayat-adjacent), corridor-upgraded connectors in the south and southeast (such as Lebu toward Kaliti), and selective "value-within-prime" pockets in Bole where pricing has not yet hit the extreme tail.
Projected 5-year cumulative price growth for these top-performing areas ranges from 70% to 110% in Birr terms, outpacing the citywide average by 15 to 20 percentage points due to infrastructure catalysts and broad-based demand.
This longer-term forecast largely aligns with the shorter-term view, though over five years the south and southeast corridors gain more weight because their road projects will have fully completed, unlocking previously undervalued land.
The currently undervalued area with the best potential for outperformance over five years is the Nifas Silk-Lafto sub-city, where newer apartment stock is listing at lower per-sqm prices than comparable Bole buildings, yet access improvements are already underway.
What property type will give the best return in Addis Ababa over 5 years as of 2026?
As of early 2026, well-located two-to-three bedroom apartments in prime-access neighborhoods are expected to give the best risk-adjusted total return in Addis Ababa over the next five years, combining solid appreciation with strong rental income.
Projected 5-year total return (appreciation plus rental income) for this property type ranges from roughly 100% to 150% in Birr terms, assuming yields of 9% to 12% annually on top of capital appreciation.
The main structural trend favoring apartments is their superior liquidity in a high-interest-rate, cash-driven market, as they are easier to rent, easier to resell, and do not carry the "illiquid land premium" that can trap villa owners for years.
For investors seeking a balance of return and lower risk, the best choice is a modern apartment in an emerging-but-established neighborhood like CMC or Summit, where entry prices are more modest yet rental demand and infrastructure improvements support steady appreciation.
How will new infrastructure projects affect property prices in Addis Ababa over 5 years?
The top three major infrastructure projects expected to impact property prices in Addis Ababa over the next five years are ongoing road corridor expansions managed by the Addis Ababa City Road Authority, planned improvements to public transit connectivity, and new commercial hub developments that anchor residential demand.
The typical price premium for properties near completed infrastructure projects in Addis Ababa ranges from 15% to 25% compared to similar units in areas without recent upgrades, as reduced commute times directly translate into higher willingness to pay.
The neighborhoods that will benefit most from these infrastructure developments include CMC, Megenagna, Lebu, and parts of Nifas Silk-Lafto, all of which sit along active or planned road improvement corridors and stand to gain the largest accessibility boosts.
How will population growth and other factors impact property values in Addis Ababa in 5 years?
Addis Ababa's population is projected to grow at roughly 4% to 4.5% annually over the next five years, adding over 1.3 million residents by 2031, which will sustain strong upward pressure on property values as housing supply continues to lag.
The demographic shift with the strongest influence on property demand in Addis Ababa is the rise of young, urban professionals and growing middle-income households seeking modern apartments with reliable utilities, security, and proximity to employment centers.
Migration patterns, both domestic (rural-to-urban movement) and international (diaspora remittances and investment), are expected to keep demand elevated, as the Ethiopian diaspora increasingly views Addis Ababa real estate as a hedge against Birr depreciation and a way to secure assets in their home country.
The property types and areas that will benefit most from these demographic trends are two-to-three bedroom apartments in Bole, Yeka, and Kirkos for domestic upgraders, and townhouses in secure compounds for diaspora buyers seeking family-friendly, turnkey properties.
We made this infographic to show you how property prices in Ethiopia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What is the 10 year property price outlook in Addis Ababa?
What is the 10-year property price prediction for Addis Ababa as of 2026?
As of early 2026, cumulative property price growth in Addis Ababa over the next 10 years is expected to range from 170% to 320% in Birr terms, or roughly 25% to 80% in USD terms depending on how the exchange rate evolves.
The range of 10-year forecasts spans from a conservative scenario of about 170% cumulative growth (if reforms partially stall and inflation remains sticky) to an optimistic scenario of 320% or more (if Ethiopia achieves sustained macroeconomic stability and opens fully to foreign property ownership).
Projected average annual appreciation over the next 10 years sits between 10% and 15% in Birr terms, reflecting the city's persistent housing deficit and continued urban expansion.
The biggest uncertainty factor in making 10-year property price predictions for Addis Ababa is the path of exchange rate policy and inflation, as large swings in the Birr-to-dollar rate can dramatically alter real returns for investors measuring wealth in hard currency.
What long-term economic factors will shape property prices in Addis Ababa?
The top three long-term economic factors that will shape property prices in Addis Ababa over the next decade are the stability of inflation and the currency regime, the depth and accessibility of mortgage financing, and the degree of openness to foreign and diaspora capital.
The single long-term factor with the most positive impact on property values is the potential full implementation of foreign ownership rights, which could unlock significant new demand from diaspora Ethiopians and international investors, particularly in prime neighborhoods like Bole.
The single long-term factor that poses the greatest structural risk is persistent inflation volatility, as repeated bouts of high inflation erode purchasing power and make long-term financial planning difficult for both buyers and developers.
You'll also find a much more detailed analysis in our pack about real estate in Addis Ababa.
Is buying a property in Addis Ababa a good long-term investment?
In most base-case scenarios, buying property in Addis Ababa remains a sound long-term investment because the city's structural housing shortage and rapid population growth create persistent demand that supports both capital appreciation and rental income.
The key to a successful long-term investment is selecting properties with durable fundamentals: reliable utilities and backup power, good access to main roads, secure parking, and professional building management, as these attributes protect value even during economic downturns.
Investors should also favor property types with strong rental appeal and resale liquidity, such as well-located apartments, rather than ultra-luxury villas that depend on a narrow buyer pool and can sit unsold for years in a cash-driven market.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Addis Ababa, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Ethiopian Statistics Service | Official national statistics office publishing Ethiopia's inflation data. | We used it to anchor price growth expectations and sanity-check housing cost pressure. We also used the CPI breakdown to validate the inflation-to-property link. |
| National Bank of Ethiopia (Monetary Policy) | Central bank publishing the policy rate and interest rate signals. | We used it to explain why mortgages are expensive and cash buyers dominate. We factored the policy rate into all affordability and demand scenarios. |
| National Bank of Ethiopia (Exchange Rates) | Official reference for Ethiopia's indicative exchange rate. | We used it to frame why USD pricing feels sticky while Birr prices move. We also used it to convert local prices into dollar equivalents. |
| IMF Extended Credit Facility (Ethiopia) | Official IMF program documentation and reform framing. | We used it to anchor our "reform-era" assumptions for forecasts. We relied on its reform timeline to shape base-case and optimistic scenarios. |
| World Bank Ethiopia MPO | Official macro monitoring document for Ethiopia. | We used it to cross-check inflation direction and reform impacts. We also used it to validate risk factors in our downside scenarios. |
| Reuters (Inflation Forecast) | Top-tier news agency with direct attribution to officials. | We used it to triangulate the disinflation narrative with official data. We incorporated its quotes to support our soft-landing scenario. |
| Reuters (Foreign Ownership Policy) | Credible reporting on government policy announcements. | We used it as a forward-looking demand catalyst for prime areas. We treated it as an upside risk factor in our forecasts. |
| Addis Ababa City Road Authority | Official city authority listing active road projects. | We used it to identify which corridors are improving access. We mapped project areas to neighborhoods buyers recognize. |
| Addis Ababa Mayor's Office | Official city government public-facing portal. | We used it as a reference for city programs and planning context. We relied on it to support why corridor upgrades matter to pricing. |
| Miles Africa Residential Report | Dedicated city residential market report with explicit methodology. | We used it as our structured baseline for price per sqm by location. We rolled forward its figures to 2026 using inflation and FX data. |
| Ethiopia Property Centre (Apartments) | Transparent, rules-based summary of listed property prices. | We used it for current asking-price reality by area. We validated our per-sqm estimates against typical unit sizes shown in listings. |
| Ethiopia Property Centre (Houses) | Same transparent methodology, focused on houses and villas. | We used it to estimate typical house ticket sizes in Birr. We cross-checked villa versus apartment growth patterns. |
| African Cities Research Consortium | Research consortium compiling city structure and urban dynamics. | We used it to explain why Addis price pressure persists. We relied on it to support long-run demand and land constraints. |
| MacroTrends (Population) | Consistent time series widely used for city population trends. | We used it to triangulate population growth direction and pace. We treated it as a demand-pressure indicator, not planning law. |
| Numbeo (Property Investment) | Transparent about sample size, update date, and methodology. | We used it as a secondary cross-check for USD per sqm and yields. We never used it alone; it had to align with Miles and listings data. |
| Wise (USD/ETB History) | Clear recent FX range for converting expectations into Birr. | We used it to sanity-check the early-2026 USD/ETB band. We also used it to explain why Birr prices can rise even if USD prices feel flat. |
| Trading Economics (Ethiopia Inflation) | Aggregates official data with clear historical time series. | We used it to track monthly inflation movements through late 2025. We cross-referenced it with ESS releases for consistency. |
| World Population Review | Aggregates UN data on city population estimates. | We used it to validate the 4.4% annual growth figure for Addis Ababa. We incorporated it into our long-term demand projections. |
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If you want to go deeper, you can read the following: