Ethiopia is on the brink of a major policy change. The Council of Ministers has approved a draft law that, for the first time, would allow foreign nationals to own immovable property in the country. While this legislation still needs to pass through parliament, its implications are already stirring concern and anticipation among local home buyers and real estate investors.
The new draft proclamation, approved during the Council’s 44th regular session, forms part of Prime Minister Abiy Ahmed’s broader economic liberalisation agenda. It aims to attract foreign investment, stimulate the housing sector, and create jobs. If enacted, the law will permit foreigners to own real estate, although land use rights will remain with Ethiopian citizens, preserving national control over land.
Currently, Ethiopia prohibits foreign nationals from owning residential or commercial properties. This restriction has long been viewed as a barrier to foreign direct investment. Removing it could lead to a significant influx of capital, transforming the real estate landscape.
For local home buyers, this shift carries serious implications. Increased demand from foreign investors could drive up property prices, particularly in desirable urban areas like Addis Ababa. The current market, still offering relatively affordable rates, may not stay this way for long. As availability tightens and competition grows, waiting too long to purchase property could result in significantly higher costs.
While the reform could also boost housing supply and infrastructure over time, the immediate effect is likely to be a surge in prices due to heightened demand. This makes now a critical window for local buyers to secure property before the market becomes more competitive and expensive.
This reform aligns with other liberalisation efforts by the government, including recent moves to open the banking sector to foreign companies. It reflects a strategic push to integrate Ethiopia more fully into the global economy, with real estate poised as a major frontier.
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