Ethiopia’s new elite spur housing boom

ADDIS ADABA – White fences and manicured lawns surround the villas of an elegant housing estate in Ethiopia, a potent symbol of the emerging elite in a country better known for drought and famine.

Just 10 years ago, the affluent suburb of Yerrer View was little more than fields. Today, imposing villas with pillars stand behind neatly-trimmed oleander hedges.

A comfortable commuting distance of 20 kilometres from the capital Addis Ababa, the 600-hectare estate has tapped into a growing taste for high-end luxury among wealthy Ethiopians, who are looking for a home which reflects their success in business.

Over the past decade, this Horn of Africa nation has seen an annual growth rate of nearly 10%, World Bank figures show, due to a boom in construction, manufacturing, trade and agriculture.

For those in Africa’s second most populous country who are enjoying that growth, the estate symbolises much more than a home.

“We are selling a lifestyle more than just housing,” says Haile Mesele, a civil engineer who heads Country Club Developers, the property firm behind the development.

According to a recent study by New World Wealth (NWW), a South Africa-based market research consultancy, there are now 2 700 millionaires in Ethiopia, reflecting an increase of 108% between 2007 and 2013, the fastest growth rate in Africa.

“There is a demand for luxury real estate,” said Wunmi Osholake, who runs the Ethiopian branch of online real estate platform Lamudi, which focuses on emerging markets, with customers eyeing property costing over US$330 000.

In the centre of Addis Ababa, the bustling Kazanchis business district is also undergoing major renovations.

Eighteen months ago, May Real Estate Development began a new residential development called the Addis Gojo project, which incorporates 113 apartments in three 10-storey towers located near several embassies.

“For those working for the UN or diplomats, it is very central. The district is a new sort of Manhattan,” says project manager Bitania Ephfrem.

A standard apartment between 140 and 170 square metres rents for about US$1 800 per month.

Such luxury housing has been designed to meet the needs of Ethiopia’s emerging new middle class. At the estate in Yerrer View, hundreds of the homes from stand-alone villas to modern apartments are already occupied with plans for a total of 5 400 houses for some 20 000 people.

When completed, the estate will also include a golf course, a five-star spa hotel, a shopping centre, school and clinic and an organic farm covering about 200 hectares.

Since the overthrow of a Marxist junta in 1991, Ethiopia’s political and economic situation has stabilised, although rights groups have criticised the government for suppressing opposition.

The economy is still heavily dependent on agriculture, especially coffee, with the vast majority of the country’s workers involved in that sector.

Meeting the demand for new housing has called for bringing in foreign workers as Ethiopia lacks a skilled workforce.

Haile said his firm recruited around a thousand specialist workers from China.

Yoseph Mebratu, the major shareholder in May Real Estate Development, also complains that he had to import 70% of raw materials.

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