Addis Ababa, June 24, 2017— Ethiopia’s House of People’s Representatives has formally approved a new proclamation granting foreign nationals the right to own immovable residential properties, marking a significant policy shift aimed at attracting foreign investment in the country’s housing sector.

The legislation, which passed after thorough debate in Parliament, was presented by the House’s Urban, Infrastructure, and Transport Affairs Standing Committee. During the session, committee representatives fielded numerous questions from lawmakers seeking clarification on the scope and implications of the new law.

Committee members emphasized that while Ethiopia’s land remains owned by the state and the people collectively—meaning neither citizens nor foreigners can buy or sell land itself—the proclamation specifically enables foreigners to acquire ownership of immovable residential structures built on leased land.

“This measure is designed to encourage foreign investment in housing development without undermining the constitutional principle that land is publicly owned,” the Standing Committee explained.

To regulate and manage this investment channel responsibly, the proclamation sets a minimum investment threshold of $150,000 for foreign nationals seeking to own residential property in Ethiopia. The amount was determined based on current real-estate market conditions in the country.

However, some Members of Parliament expressed concern that the $150,000 threshold was too low. They warned it could potentially lead to an influx of foreign buyers, driving up demand and prices while also putting pressure on urban infrastructure.

Addressing these concerns, Professor Mohamed Abdo, Chairman of the Standing Committee, clarified that the proclamation was carefully drafted to prevent such outcomes.

“The provision only covers the primary applicant along with their spouse and children,” he explained. “This restriction ensures that granting home ownership rights to foreigners will not lead to unchecked population growth or large-scale migration into Ethiopian cities.”

Professor Mohamed also pointed out that while the current minimum investment requirement is set at $150,000, it is not static.

“This amount will be revised over time to reflect market changes and policy needs,” he noted, suggesting that Ethiopia will retain flexibility to adjust thresholds to balance investor interest with local housing affordability.

Moreover, the proclamation stipulates that foreign investors wishing to develop or purchase residential properties outside of Addis Ababa will be subject to the laws and regulations of the respective regional governments. This provision is intended to respect Ethiopia’s federal system and ensure that local authorities have a say in managing foreign investment in their jurisdictions.

By facilitating controlled foreign participation in the housing market, the government aims to boost investment, expand housing supply, and stimulate the broader construction sector, while safeguarding the rights of Ethiopian citizens and maintaining public ownership of land.