The construction sector plays an immense role in Ethiopia’s economic growth and real estate and other construction contributed 12.5 percent in the Gross Domestic Product, according to information obtained from Ministry of construction.
The government of Ethiopia has been hugely engaged to address public’s ever-increasing demand for residence and employing various condominium housing schemes that has largely benefited low and middle-income citizens. Through the construction of hundred thousand cost-effective houses with necessary facilities and infrastructure in the Capital, the government has the lion’s share in maximizing the benefit of the urban poor, women and civil servants.
Apart from government’s involvement, the number of private real estate developers have been playing a growing role in the sector. Capitalizing on the favorable policy climate, the real estate companies have made significant contribution in satisfying the demand of middle and high-income citizens for apartments and other high-end houses.
Among the numerous real estate companies, Noah Real Estate stand among the forefront. Noah’s management board member Abiy Hailemariam told Addis Zemen Daily that the Company has hugely invested in the construction of houses and apartments in its six years history in the sector and play a growing role in addressing the house shortage largely witnessed in Addis Ababa.
Noah fully funded the cost of the houses and has so far transferred close to 3,000 houses for beneficiaries. According to Abiy, the Company employed different mechanism to transfer properties and it will sell the house for those capable of fully covering the price.
It is known that many people could not get houses for many years even after they fully pay the expected fees. For this, Noah and some other real estate developers chose the cash approach to build the houses by their own cost and transfer the properties for beneficiaries those can pay the full amount.
Mentioning Noah has faced similar challenges other real estate developers could face in the construction industry, he said that the Company’s engagement to modernize its operational and administrative capabilities paying off in enabling to transfer houses in shortest possible time.
Stating his Company’s plan to build houses that would fit the demand of low-income citizens, Abiy stated that the sector’s huge cost impedes them to translate the plan and confined their engagement to center the desire of middle and high-income earners.
Deputy General Manager of Flintstone Homes, the other giant real estate developer Biruk Shemeles said on his part that his company has been built close to 600 houses for residential and commercial purposes during its 10 years operation in the real estate sector. Currently Flintstone builds 3,500 residential and commercial complexes.
The delay to obtain construction licenses and ownership certificates coupled with frequent design changes and as well as inadequate supply of loan and foreign currency and shortage of construction inputs are the major factors that the Deputy General Manager mentioned to cause the widespread delay in houses transfer.
Following Ethiopia’s rapid economic growth and population increases, the number of people who seek houses is skyrocketed and the multiple engagement of government and real estate developers has not fully satisfied the demand. Mentioning the untapped potentials of real estate development, Biruk stated that government needs to make close follow up and support to invite more companies to the sector.
Stating his company’s engagement to address middle and high-income citizens demand for residence due to high costs of construction inputs, the Deputy Manger expressed Flintstone’s interest to take part in the government-led condominium house schemes to benefit the urban poor. Biruk further noted that the government needs to ease conditions to obtain construction permits and plots to speed up the construction of houses.
Currently foreign real estate developers join the sector and currently the China-based Sino Mark Company partnering with the local firm Saba Engineering is execuing the construction of high rising apartments in Gotera, the first of its kind at the outlay of four billion Birr.
Despite its enormous potential for national economic development and making Addis Ababa a favorable place to live, the real estate sector has been challenged by shortage of construction inputs and finance.
In this regard, the joint efforts of government and private companies is crucial to address challenges witnessed in the real estate and construction sector in the bid to satisfy the public’s demand for houses.