Are There Too Many Luxury Homes Being Built In Addis Ababa?
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Loading... - Judith Sai
- 10 Aug 2022
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Prices in some areas of Addis have tripled as a result of overwhelming demand and investors looking to hedge against the depreciation of the birr.
However, our research is now showing that there is a threat of too many luxury apartments being built.
For those unfamiliar with the Ethiopian economy, investors are known to copy-paste proven methods of expanding their wealth. And it seems as though real estate is one of those industries when you see how many apartment buildings are being constructed in Addis at the current time.
What is making matters worse is the war in Ukraine and deteriorating global economic conditions contributing to sky-rocketing prices for construction materials.
In fact, many developers in Addis have begun constructing apartment buildings and come to a standstill because of the high costs of finishing materials.
The concerning point is that not only are many of these buildings using finance and have stopped construction, but housing demand is also weakening globally and locally.
Globally, many of the factors that spurred demand, such as government stimulus payments, record low mortgage rates, and heightened investor activity, are now disappearing, leading to reduced demand from the diaspora market.
So with reduced demand from the diaspora demographic, who account for 90% of apartment purchases in Addis and record housing construction, there are fears that there will be an oversupply of luxury homes in Addis. Read More...
