In a policy pivot that caught many by surprise, Ethiopia’s central bank has decided to delay the full removal of the banking credit cap initially slated for September 2025. Instead, the credit growth ceiling has been raised from 18% to 24%. While not the sweeping liberalization initially anticipated, this move still carries significant implications for the country’s real estate market, especially in Addis Ababa where demand continues to outpace supply. The decision to increase the cap rather than eliminate it entirely reflects a balancing act between stimulating economic activity and managing inflation. At 13.6% in August 2025, inflation has begun to ease, prompting the central bank to cautiously increase liquidity without risking macroeconomic instability.
What Does 24% Credit Growth Mean for Real Estate?
- Improved Access to Financing: Even without full cap removal, a 24% ceiling marks the highest rate in recent years. This expanded credit window allows banks to issue more mortgages and construction loans, easing the capital constraints that have long hindered both developers and buyers.
- Renewed Development Momentum: As financing becomes more accessible, developers can revive stalled projects and launch new ones. This is critical in a city like Addis Ababa, which faces an annual housing deficit of over 140,000 units. The rise in credit availability could help narrow this gap.
- Strategic Opportunity for Buyers: With more mortgage products likely entering the market, now is a smart time for buyers to secure financing before demand pushes property prices higher. History shows that when liquidity improves, real estate prices in Addis often surge.
Why This Matters for Investors
Ethiopia’s long-term housing needs remain massive. With rapid urbanization and a growing middle class, demand will only intensify. For real estate investors, the raised credit limit offers an early-mover advantage—more accessible financing, more inventory, and less competition than what is expected when the cap is fully lifted.
Whether you’re a first-time buyer or a seasoned investor, this is a strategic moment to act. The postponement of full credit cap removal may have tempered expectations, but the 24% ceiling is still a significant step forward for Ethiopia’s real estate sector. For those looking to capitalize on this transitional phase, the time to move is no
Explore your investment options today – Dema Hope Real Estate has multiple ongoing projects, including our high-end apartments around the Signal area, which are 100% complete and ready for occupancy, and our mixed-use development near Bole Medhanialem and Adey Abeba Stadium Stadium in Bole, offering both residential and commercial units. If you’re ready to take the next step toward homeownership or investment, contact us at +251 951515174 or send us an email [email protected] to learn more.
