Assessment of affordability of private residential developments in Addis Ababa

Abstract

This research report assesses the affordability of private residential developments in Addis Ababa and delineates factors that contribute to their affordability. Literatures related to concepts of housing affordability; household income levels; housing prices and mortgage financing, etc are reviewed. The research studies examined revealed that the combination of high population and high urban growth rates coupled with a high prevalence of urban poverty have placed massive strain on Ethiopian cites. Accordingly, the critical urban issue is: lack of healthy, affordable housing for all sectors of the urban population. This is especially true in Addis Ababa as it has a share of 23% of the country’s urban population. In Addis Ababa, there is strong housing demand as supply lags behind demand; conditions of existing houses worsen and the population is increasing. To date, the government housing program has only managed to build only about half of the demanded units. It has, therefore, became increasingly imperative that the government should concentrate on reforming and managing the policy and legal framework in such a way as to create an environment for the private sector to provide housing.