Words that have been used
to describe the late Honorable Dr. Senedu Gebru include Resistance
fighter, philanthropist, educator, feminist, patriot, author, teacher
and mother. History may
remember her foremost as the first woman elected to Parliament, but her
contributions to this nation were so many and varied, she
could rightly be considered Ethiopia’s Renaissance Woman of the 20th
century.
Although it might seem like more Ethiopians from abroad are moving back to Ethiopia than ever before, it is also true that the much greater outflow of Ethiopians leaving the country in search of better opportunity abroad, continues unabated.
Written by Mina Yirga - Horizon Ethiopia Staff Writer
Tuesday, 13 May 2008
The quest to own a house in Addis Ababa is one few dream about. Prohibiting factors are obvious: a booming real estate market boasting prices far beyond the reach of the average salary earner and the stunted development of innovative financing measures. While the forces behind low wages are somewhat apparent as masses of unskilled laborers compete for what little work exists in a newly emerging economy, it is less clear what is hampering the financial industry from making creative mortgage packages that grant the flexibility to become attractive to the middle-class.
Before liberalization in the early 1990s, the Ethiopian mortgage industry was monopolized by what is today known as the Construction and Business Bank (CBB). The smallest of the four public banks was to be known as the Housing and Saving Bank (usually called Mortgage Bank) and used to advance mortgage loans both for cooperatives and individuals who were predominately government employees with dreams of constructing residential houses.
But since these early beginnings the industry has yet to blossom. By and large, the banks’ finance packages both for the construction and acquisition of houses does not exceed 70% of the total construction and purchase cost. Furthermore, mortgage loans typically employ a 10-year repayment (amortization) schedule. This simply does not cover the needs of the vast majority who are not deemed worthy to meet payments on the baseline rates offered by real estate companies. Whereas, loans reaching the 30-year mark are not uncommon in the United States (US) in a country where the purchasing power of most consumers is less than 10% of their American counterparts, 10 years is unrealistic when houses can fetch similar prices in the major cities of the two countries.
Even if there have been few significant development in commercial real estate, there is certainly a roaring demand for the construction of residential premises constantly fueled population pressures. As CBB has lately ceased to granted mortgage loans, the Commercial Bank of Ethiopia (CBE) has ventured into the market and is also advancing loans to condominium lottery winners. As for the private banks, most of them do offer mortgage loans, a rather recent phenomenon, but not a significant percentage of their loan portfolio. This is due to the limited liquidity these private banks face that, as a result, cannot commit a significant percentage of their deposits to long-terms loans. Moreover, private bank working capital loans more or less are conditional on construction and completion of new buildings, renovation of commercial, residential and industrial buildings and acquisition of real estate property. The banks’ loan disbursements are made progressively after ascertaining that the borrower has invested at least 30% of the construction cost as verified by the bank’s engineer.
Despite the roadblocks for prospective homeowners, the volume of loans is increasing, albeit from a low base marked at around five billion Birr in 1997. The figure has since hit the 27 billion Birr mark on the shoulders of new banks entering the market and the overall construction boom. In fact, real estate developers have played a role in helping homebuyers arrange for mortgages with a number of banks (public & private). Some may find it surprising to learn that a good percentage of home purchases from these developers have been facilitated through such loans where the buyer is liable to pay 50% of the total purchase price by the time the house is finished while the balance is financed by a bank which is partnered with the developer. Many such borrowers are actually from the Diaspora reflecting in part, the nature of such loans which are almost entirely based on the collateral value of the property being built and not on the credit worthiness of the borrower.
Even so, the constraints in the mortgage industry for the vast majority of Ethiopians is beginning to show its face as the competition for limited liquidity is stiff in the private sector. For now, the government banks appear to be avoiding the problem, as most public utilities are required to maintain their deposits at the CBE. Though this policy seems to be keeping their loan portfolios in balance it still remains to be seen which bank, public or private, is going to develop the capacity to tap into the emerging middle-class and make more urban Ethiopians homeowners.
Can u show me the pictures the houses in this area SENSA or HAEAT or BOLLE, If u don’t mind . Lease then 100 thousand Tell me America dollar the houses. Villa house Thanks for everything
Meti Yilma is a radio show host, poet, writer, MC, one time tv
personality and a number of other things besides. Including, a top 4 finisher in 2006's Survivor Africa.
Sehin Teferra
is a freelance trainer and consultant with an academic background in
international development and gender equity. She has written since her teens, and invites your comments and
thoughts on her observations.
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There is no question that there is a lot of agricultural investment occurring in Ethiopia right now. The question is how much of that is being initiated by Ethiopians?
Despite a global downturn in real estate prices, it seemed like Ethiopia's market was impervious to it all. But there are signs which point to an inevitable downturn in the near future. Just how far down prices will go is anybody's guess.
After emigrating abroad, going to school and then opening a successful business in London, it only took a vacation to Tewodros Tadesse's hometown of Hawassa to convince him to leave everything behind and move back once and for all.
ESAI celebrates its 10th anniversary this year. Horizon Ethiopia would like to congratulate them on their achievements through the years and wishes them another decade and more of continued success.
If u don’t mind .
Lease then 100 thousand
Tell me America dollar the houses. Villa house
Thanks for everything