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Residential Real Estate Leases - Ethiopia

Ethiopia

The Residential Real Estate Leases market market in Ethiopia is expected to witness significant growth in the coming years.
By 2024, the revenue of this market segment is projected to reach US$48.48bn Ethiopian Birr.
House Leases, in particular, dominate the market with a projected market volume of US$37.72bn Ethiopian Birr in 2024.
This indicates the strong demand for residential properties in the country.
Furthermore, the revenue of the Residential Real Estate Leases market market is anticipated to exhibit a compound annual growth rate (CAGR) of 9.74% from 2024 to 2029.
This steady growth is expected to result in a market volume of US$77.16bn Ethiopian Birr by 2029.
The increasing urbanization and population growth in Ethiopia are contributing factors to the positive outlook for the residential real estate leasing market in the country.
Despite economic challenges, Ethiopia's residential real estate market is experiencing a surge in demand due to urbanization and government initiatives.

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Analyst Opinion

The Residential Real Estate Leases market in Ethiopia is experiencing significant growth and development due to various factors.

Customer preferences: Customers in the Residential Real Estate Leases market in Ethiopia are increasingly seeking affordable and well-maintained properties. They prioritize properties that offer modern amenities such as reliable water and electricity supply, security features, and proximity to essential facilities like schools, hospitals, and shopping centers. Additionally, customers prefer properties that are located in safe and well-connected neighborhoods.

Trends in the market: One of the key trends in the Residential Real Estate Leases market in Ethiopia is the increasing demand for rental properties. This trend can be attributed to several factors such as urbanization, population growth, and changing lifestyles. As more people move to urban areas in search of better job opportunities and improved living standards, the demand for rental properties has significantly increased. Furthermore, the rising cost of homeownership and the flexibility offered by renting have also contributed to the growth of the rental market. Another trend in the market is the emergence of real estate development companies that specialize in the construction and management of rental properties. These companies cater to the growing demand for rental properties by providing well-designed and professionally managed residential complexes. Such developments offer a wide range of amenities and services, including 24/7 security, maintenance, and recreational facilities, which attract customers looking for hassle-free living arrangements.

Local special circumstances: Ethiopia has experienced rapid urbanization in recent years, with a significant portion of the population migrating from rural areas to cities. This influx of people has put pressure on the housing market, leading to increased demand for rental properties. Additionally, the government's focus on infrastructure development and urban planning has created more opportunities for real estate development, further contributing to the growth of the Residential Real Estate Leases market.

Underlying macroeconomic factors: Ethiopia's strong economic growth and stability have played a crucial role in the development of the Residential Real Estate Leases market. The country has witnessed robust economic growth in recent years, driven by sectors such as agriculture, manufacturing, and services. This growth has resulted in increased disposable income and improved living standards, leading to a higher demand for rental properties. Furthermore, the government's efforts to attract foreign direct investment and promote the construction sector have also positively impacted the Residential Real Estate Leases market. The construction industry has been a key driver of economic growth, creating employment opportunities and driving infrastructure development. These factors have contributed to the overall development and expansion of the Residential Real Estate Leases market in Ethiopia.

Methodology

Data coverage:

Figures are based on total and average revenue of residential apartment leases.

Modeling approach:

Market size is determined by a bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war considered at a country-specific level.