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How hard is it to find house for rent in Addis Ababa at reasonable price?

As we are the leading real estate consultancy and brokerage company in Ethiopia, we receive hundreds of enquiries every year from expats looking for house for rent in Addis Ababa. The first reaction we get from expats, we send out offers to, is often one of absolute shock and amazement at how expensive renting a house is in Addis Ababa. Nobody expects that housing can be this expensive in a developing nation such as Ethiopia and a lot of expats struggle to come to terms with the market realities on the ground. To make things worse, renting apartments in Addis Ababa is also very expensive. If one searches for a 2 bedroom apartment for lease in Addis Ababa for under $1,000 per month
on one of the high end property portals such as Ethiopianproperties.com, the search is likely to turn up 0 results.

You may wonder why renting property in Addis Ababa is so expensive. The primary reason is that Addis Ababa is the third biggest diplomatic hub in the world only after New York and Geneva. This is attributed to the fact that Addis Ababa hosts the headquarters of the African Union Commission, the United Nation Economic Commission for Africa, regional and country offices of several UN agencies and other international NGOs. Furthermore, there are more than 120 embassies and diplomatic missions in Addis Ababa including the European Union Delegations to Ethiopia and to the African Union. The rapid growth in the flow of Foreign Direct Investment into Ethiopia in recent years has also enhanced Addis Ababa’s status as the major international city in the Sub-Sahara Africa region. All these international institutions have sizable workforce, which is comprised of significant number of expatriates. This has caused a rapid growth in the demand for good quality expat housing in Addis Ababa.

The pace at which the size of the international community in Addis Ababa is growing is much faster than the pace of suitable housing development in the city. One may wonder how this is possible considering the construction boom that has been witnessed across the city over the last two decades. The amount of construction projects, which have been taking place in Addis Ababa in the last couple decades, has given the city the appearance of a huge construction site. However, a close look at what is being built and where it is being built explains why the construction boom in Addis Ababa is not helping much in alleviating the expat housing problem in the city. A huge portion of the completed construction projects in recent years and those in pipeline are hotel projects. This is mainly due to the tax incentives and other privileges afforded to companies that invest in this sector since the government has a vision to make Addis Ababa a major convention and conference center in East Africa. Shopping malls, office buildings and mixed-use buildings also take up a huge portion of what is being developed in downtown Addis Ababa.

Moreover, the city is also losing a lot of its old bungalows that were built 30 – 50 years back due to the city renewal initiative adopted by the Addis Ababa City Administration. The recently revised master plan of Addis Ababa requires each land parcel owner in downtown Addis to build multi-storey buildings or risk losing their parcel if they don’t. In certain pockets of the city, where building residential homes is still allowed, landlords tend to build oversized 3 to 4 storey mansions, which the majority of expats neither can afford nor have the desire to live in. For this reason, the construction of good size and quality rental houses in Addis Ababa’s central locations is very little compared to the high demand.

By contrast, a lot of beautiful villas have been developed in the outskirts of the city including some gated communities such as CCD, Ayat, Sunrise, Varnero, and Sunshine. Areas like CMC, Summit, Lebu, and Laphto also have great houses for rent. However, such neighborhoods have failed to attract expats for one primary reason – the rush hour traffic jam that is getting worse and worse. These neighborhoods are too far from the most popular international schools such as the International Community School of Addis Ababa, Sandfod British School, the French school and Bingham Academy. Therefore, expat families with kids prefer to stay close to their children’s school to avoid the morning and evening traffic jams, which can be a nightmare. Old Airport, Bole, Aware, Kazanchis, Mesqel Flower, Kebena, Top View and Sarbet areas are the most preferred neighborhoods by such families. These neighborhoods located in the outskirts are also too far from the offices of the international organizations and embassies, which are concentrated in the city center and are the biggest employers of expatriates in Addis Ababa. Even those expats without school age children choose to stay reasonably close to their workplaces. Last but not least, these neighborhoods are also too far away from high-end entertainment and shopping areas frequented by expats, which makes them even less desirable. For this reason, expatriates tend to fight over the few housing options available in central Addis Ababa, which is sending the rental prices over the roof.

If one is looking for a descent 3 bedroom unfurnished house for rent in Addis Ababa, he should be prepared to spend at least $2,500 per month. The monthly rental price of a reasonably well maintained 4 – 5 bedroom family home ranges between $4,000 & $6,000. An ambassadorial type villa in Addis Ababa costs anywhere between $8,000 & $16,000 per month. The rental levels of villas in other affulent neighborhoods such as Old Airport, Kazanchis, Aware, Welo Sefer, Mesqel Flower, Sarbet, Lancha and Ferensay are more or less the same. If you are seeking to find a furnished house for rent in Addis Ababa, you will need to pay at least $500 more on top of the regular rates for unfurnished units.

The ufurnished and furnished apartment market in Addis Ababa is also highly inflated. If you are looking for a 2 bedroom unfurnished apartment for rent in Kazanchis Addis Ababa, which is not too fancy, it will cost you anywhere between $1,300 to $1,800. If you want to lease a 3 bedroom apartment in Kazanchis, which is unfurnished, be prepared to spend $2,500 to $3,500. The rental rates of flats for lease in Bole are slightly higher than that of Kazanchis’. Similar to the house market, if you are seeking to rent a furnished apartment in Addis Ababa, expect to spend about $500 more than you would for an unfurnished flat.

Is getting a good deal on housing in Addis Ababa totally impossible?

It is next to impossible but not totally impossible. If you want to stand the slightest chance of finding a good house or apartment at a reasonable price, you have to choose the right real estate agency. Most individual real estate brokers in Addis Ababa are not even licensed and are very opportunistic. They don’t hesitate to hike up prices if they see that they could make an extra $50 on top of their commission. Therefore, it is very important that you pick a reputable professional real estate firm such as Ethiopian Properties, which are household names among the international community in Addis Ababa.