In a landmark move, Ethiopia has passed new legislation that allows foreign nationals to own immovable residential property in the country, under certain conditions. The House of People’s Representatives approved the “foreign-ownership” law in June 2025, part of broader efforts to draw in foreign investment and better meet housing demand. allAfrica.com

What the Law Requires

• Foreigners must meet a minimum investment threshold of USD 150,000 to buy properties. allAfrica.com
• Although the law permits foreign ownership of homes, land ownership remains under government control, in line with Ethiopia’s constitutional provisions. allAfrica.com+1
• Implementation will vary by region, as regional states are expected to develop their own enforcement guidelines. allAfrica.com

Why It Matters for the Market

This law opens up new opportunities for diaspora Ethiopians and foreign investors who previously could not legally purchase properties. It could help increase foreign investment flows, push up demand in residential markets (especially mid-to-high end), and encourage developers to build more projects attractive to international buyers.

However, there are caution points: pricing competition may rise, making homes in prime locations more expensive. Also, foreign buyers will need to work carefully through legal, tax, and valuation concerns, and ensure developer credibility.

What This Means for Buyers & Developers

For buyers, this law means more choice and access—but also the need for due diligence: verify documents, assess developer track record, and understand local rules. For developers, new demand could mean more opportunities, but also higher expectations in terms of property quality, finishing, infrastructure, and transparency.