Back when the government announced the 40/60, 20/80 ad 10/90 housing schemes to address the ever-expanding demand for residential houses in Addis Ababa and large cities, the kind of turnout, which was expected at Commercial Bank of Ethiopia, although high, did not match what was actually seen on the ground. All three programs saw interest in the neighborhood of one million, an overwhelming demand for city administration to satisfy. Nevertheless, although not emphasized often, private real estate sector as well has been experiencing an impressive growth in demand. Recently, the sector seems to be seeing another awakening driving by renewed interest in high-end houses. In this edition of The Reporter, Dawit Endeshaw explores the sector.
When talking about real estate market in Ethiopia, names like Access Real Estate, Jackross Ethiopia and few others are always on the frontline.
It is not about their well-established reputation or market success they enjoyed in the industry; in fact it is the other way around.
Access Real Estate, masterminded by the ex-investment banker Ermais T. Amelga, has managed to mobilize more than one billion birr in a very short period of time from close to 2,000 homebuyers. By the time Access started to promote its housing package, it was like the housing market was struck by lightning. Banking on what Access has called a new and modern way of constructing houses—using steel structure and magnesium boards—the company promised homebuyers that it would deliver affordable homes in less than one year, a feat which has not been tried in Ethiopia before.
Access’s money, as they say, was on the steel structure and how it will cut down construction cost and time, significantly. Encouraged or perhaps a bit overconfident with this new way of constructing houses, Access went ahead to offer mouth-watering deals like promising to pay 5,000 birr in rent monthly for homebuyers if the delivery of the units exceed the stated timeframe. On top of that, Access promised to return the full amount of the down payment plus 15 percent interest should a customer decides not to continue with Access.
Well it seems that this overconfidence has finally brought Access down to its knees. Such a bold ambition and hope of homebuyers dissipated into thin air when Access failed to provide not even a single housing unit to its customers.
Read more at: The Reporter