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Everything you need to know before buying real estate is included in our Ethiopia Property Pack
Thinking about buying a 3-bedroom apartment in Addis Ababa? It’s a vibrant city, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other areas like Bole or Kazanchis where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Ethiopia Property Pack.
Will property prices increase in Ethiopia in 2025?
No, property prices in Ethiopia are not expected to rise significantly in 2025, due to a combination of economic challenges and market conditions.
Backed by our fresh, in-depth market analysis, we’re cautious about the Ethiopian property market, which faces several hurdles that could hinder price growth.
While there are some positive developments, such as infrastructure projects and urbanization trends, the overall economic environment presents significant challenges that could outweigh these benefits.
Signals pointing to a property price increase in Ethiopia
Here are some factors suggesting prices could increase:
Urbanization trends continue to drive demand for housing in major cities like Addis Ababa, as more people move from rural areas seeking better opportunities, potentially supporting property prices.
Government initiatives aimed at improving infrastructure, such as road and transportation projects, could enhance property values in areas benefiting from these developments.
The growing middle class in Ethiopia is expected to increase demand for quality housing, which could support property prices in certain segments of the market.
Signals pointing to a property price decrease in Ethiopia
Here are some factors suggesting prices could fall:
Economic instability, including high inflation rates, is eroding purchasing power, making it difficult for many potential buyers to afford property, which could suppress demand.
Political uncertainty and regional conflicts may deter both domestic and international investors, leading to reduced investment in the property market.
Limited access to affordable financing options and high interest rates are making it challenging for buyers to secure mortgages, which could dampen property demand.
The construction sector faces challenges such as rising material costs and supply chain disruptions, which could slow down new developments and impact property availability.
A lack of regulatory clarity and bureaucratic hurdles in property transactions may discourage investment and slow down market activity.
The depreciation of the Ethiopian birr against major currencies is increasing the cost of imported construction materials, potentially stalling new projects and affecting property prices.
High unemployment rates and economic challenges are reducing disposable income, limiting the ability of many Ethiopians to invest in property.
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If property prices go up in Ethiopia, how much would they increase by?
If real estate prices in Ethiopia were to rise in 2025, the increase would likely be around 10% to 15% of their 2024 values.
Typically, real estate in emerging markets like Ethiopia appreciates by approximately 5% to 15% annually over the long term. However, fluctuations can occur depending on factors such as region, economic conditions, and property type.
It means that, if you spot a charming 2-bedroom apartment in Addis Ababa for 3,000,000 ETB today, don't be surprised if it's priced between 3,300,000 and 3,450,000 ETB this time next year.
To give you a better understanding, here is a table that shows 7 types of Ethiopian real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 5%, 10%, and 15%.
| Type of Property | Average Price in 2024 (ETB) | Price in 2025 (5% increase) | Price in 2025 (10% increase) | Price in 2025 (15% increase) |
|---|---|---|---|---|
| Apartment (60 sqm / 646 sqft) | 3,000,000 ETB | 3,150,000 ETB | 3,300,000 ETB | 3,450,000 ETB |
| Modern Villa (150 sqm / 1,615 sqft) | 10,000,000 ETB | 10,500,000 ETB | 11,000,000 ETB | 11,500,000 ETB |
| Luxury Penthouse (200 sqm / 2,153 sqft) | 20,000,000 ETB | 21,000,000 ETB | 22,000,000 ETB | 23,000,000 ETB |
| Studio (30 sqm / 323 sqft) | 1,500,000 ETB | 1,575,000 ETB | 1,650,000 ETB | 1,725,000 ETB |
| Loft (80 sqm / 861 sqft) | 5,000,000 ETB | 5,250,000 ETB | 5,500,000 ETB | 5,750,000 ETB |
| Townhouse (120 sqm / 1,292 sqft) | 8,000,000 ETB | 8,400,000 ETB | 8,800,000 ETB | 9,200,000 ETB |
| Investment Property (50 sqm / 538 sqft) | 2,500,000 ETB | 2,625,000 ETB | 2,750,000 ETB | 2,875,000 ETB |
Everything you need to know is included in our Property Pack for Ethiopia
If real estate prices go up in Ethiopia, which areas are likely to see the biggest increases?
Today, people who want to move to Ethiopia are looking for a blend of cultural heritage and modern amenities, which Arat Kilo in Addis Ababa offers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Bole has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Ethiopian market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Arat Kilo | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Bole | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Addis Ababa. |
| Kazanchis | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Lideta | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Cazanchise | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Piazza | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Gerji | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Megenagna | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Old Airport | Medium-High | Its proximity to central Addis Ababa, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Merkato | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Summit | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Entoto | High | Upcoming restoration of cultural sites and high-profile projects are driving a renewed focus on this scenic, historic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Ethiopia?
In 2025, Ethiopian real estate trends focus on tech-smart, energy-efficient apartments, larger homes in emerging urban areas, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by the increasing adoption of technology and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025.
- Family-Sized Homes in Emerging Urban Areas:
With a growing demand for larger living spaces, especially among families, emerging urban areas in Ethiopia are seeing increased interest. Proximity to infrastructure developments and educational institutions is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In bustling cities like Addis Ababa, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Ethiopia's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category.
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