Residential Real Estate Investment In Ethiopia: A Survey of the Legal, Institutional and Practical Challenges.

Abstract

Real estate investment is crucial for ascertaining access to houses in a country, especially for a country like Ethiopia that suffers from a shortage of dwellings on the one hand and the regular increment of urbanization on the other hand. It plays a countless role in alleviating the housing problem that has spearheaded in the country. Thus, the state should is expected to help the industry to expand by reducing the major legal, institutional and practical challenges. Accordingly, the thesis explores the major legal, institutional and practical challenges to real estate investments in general and residential real estate investment specifically in Ethiopia. In attaining the objective of the thesis, the research used qualitative methodology, and the method of data collection for the study included both primary and secondary data. The primary data sources are legislation and open-ended interview questions with the legal departments of real estate developers, and as for secondary data, research has looked into necessary literature on the topic. The data collected was analyzed and interpreted thematically by using narration. The study also critically assesses and compares the institutional and legal arrangements of real estate regulation established among countries mainly residential real estate regulation of Serbia, India and Ethiopia. A comparative analysis have the value to identify the most effective system that the countries may follow for regulation of real estate with the ultimate goal of identifying the gaps and challenges that Ethiopian real estate regulation face and finally recommend some useful real estate regulation approaches to the FDRE government. The study identified the non-existence of a comprehensive legal regime for real estate investment as to legal difficulties. Concerning the practical challenges due to the existing legal lacuna, the research discovered a shortage relating to access to land for real estate developers, financial difficulties due to poor access to finance, and the absence of government institutions established by the legislature to regulate the real estate sector in the country. Finally, the research recommended the adoption of distinct special rules and the establishment of an independent regulatory body for real estate investment to overcome the legal and practical challenges faced by Ethiopia's real estate sector, as both measures will aid in the efficient regulation of the sector. It also recommends that the government should make land and finance more accessible to residential real estate developers by making their companies eligible for investment incentives.