Real Estate Tech in Ethiopia
Real estate tech in Ethiopia and development of its PropTech sector have a long way to go as of now. The ancient culture rich country of Ethiopia is in the Horn of Africa and has archaeological finds dating back to 3 million years. Popularly known as the most populous landlocked country in the world, Ethiopia is home to over 100 million people and is also the second most populous nation on the African continent. Its largest and capital city is Addis Ababa, where these days one can see a host of new building structures and crane and construction. This sets some ground for us to understand the scope of real estate tech in Ethiopia.
In spite of the recent fast growth of the Ethiopian economy, the GDP of here is one of the lowest in the world. The economy faces some serious structural issues and bribery/ corruption is common. Though with focussed investment in public infrastructure as well as in industrial parks, Ethiopia is well on its way to becoming the light manufacturing hub in Africa. The real estate scenario of Ethiopia is an interesting one that is set around their constitutional provisions, one that has a major effect on how Proptech can develop here.
The Ethiopian Real Estate Scenario
Ethiopia is one of the few nations that has defines its real estate and land owning via the constitutional provisions. As stated by the constitution, the right to own land belongs only to the ?the state and the people?, the citizens may lease it (up to 99 years) but are not allowed to mortgage or sell it. Land is expected to be rented to the most productive user and it is only allowed to be rented for a maximum of 20 years. There is a considerable amount of unrest and mistrust amongst the population as this regulation for land ownership (or the lack of it) leads to corruption, land snatching, and low productivity. A number of factors are also straining the government?s resources to provide for the basic needs of its people, like rapid urbanization, increased migration and a spark in population growth. Though the conditions are better in the cities, mostly all of Ethiopia has poverty and poor sanitation.
This is also the reason why agricultural productivity is low in Ethiopia and investments in lands are not a thing for the public. Land being a major asset class continues to remain ignored as a mode of investment. The major developers of here are also not trusted as cheating, project completion delay and non-completion are frequent here. This has been changing in the recent times with increased foreign investment in housing and development projects to meet the housing shortage of Ethiopia. The private and public construction boom has led to a drastic improvement in living standards, especially in Addis Ababa. Government built condominiums have now sprung up in the city and are changing the way people live here.
This means that there is a scope for real estate tech in Ethiopia, but is it now? And does the country have tech expertise and an ecosystem to innovate? Let?s explore the startup ecosystem of here to find out.
Startup ecosystem in Ethiopia and Its impact on Real estate tech in Ethiopia
In terms of technology and innovation, Ethiopia is still far away from the digital savannahs of Africa. With no credit cards and international banking systems, Google Play Store and Apple App Store are not accessible. The recent development here is of mobile money that has just arrived but is being slowly adopted due to its many limitations. Tools like VoIP and Skype are banned here for business purposes, and less than 1% of Ethiopia’s 85m citizens are connected via the internet. There is only 17% mobile penetration and the government has a very reserved approach to technology development, hence hindering the growth and innovation of technology startups here.
But this doesn?t deter many entrepreneurs to try. The poster boy for innovation and entrepreneurship here in Ethiopia is Markos Lemma, co-founder of Iceaddis. Iceaddis is an Ethiopia’s leading technology hub, accelerator and coworking space, something that might be considered in real estate tech in Ethiopia.
With a growing middle class and economic growth, entrepreneurs are sprouting up to provide solutions mainly in Information Communications and Technology, green technology & energy and creative industries. It is interesting to note this development while Ethiopia is, amongst 144 countries, ranked below 130 in technological readiness, competitiveness, and access to financial services and loans. Many predict entrepreneurship in Ethiopia to take off even after the government mistrust and a tiff between the public and private sectors. Leading accelerators are rushing to Ethiopia to provide a more conducive environment to produce leaders and change makers of tomorrow. With this growth, one may also be able to witness a change in real estate tech in Ethiopia and development of its PropTech sector.
Real estate tech in Ethiopia
Real estate tech in Ethiopia or PropTech is limited to traditional brokers, agents, and only some online platforms. One might platform for discovery and listing of properties, but these aren?t technologically advanced platforms. Real estate leasing and sale still happens via brokers that work offline to showcase properties and have a control of what to show to whom, dictated by commissions. This hinders the growth of PropTech in Ethiopia.
A platform working in the space of real estate discovery and leasing in Ethiopia is Ezega.com. It is a classified based platform, that was born in Silicon Valley, California. You can contact listers via email or via their personal message feature.
Technologies like 3D printing, IoT, robotics, and even virtual reality tours are yet to enter the Ethiopian market, hence the limited growth of real estate tech in Ethiopia.
Way Forward for real estate tech in Ethiopia
Due to the lack of government support, land ownership regulations and non-conducive environment for technological development, Ethiopia is running behind on the innovation front. Currently, solving of other critical needs of the country (hopefully using intelligent technology) is more on the forefront, and real estate tech will take a backseat. It will be interesting to see whether the emerging sector of entrepreneurs here will be able to utilize technology to solve the real estate issues of Ethiopia, and completely disrupt it. The time for real estate tech in Ethiopia is yet to come and PropTech will not be witnessing any changes in the near future.
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Do you want to know what makes a winning PropTech startup, check out these Top 50 Real Estate Tech startups to watch out for in 2018.
http://yostartups.com/50-real-estate-startups-watch-2018/
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