The rental market in an industrialising city: Working paper

Working paper Firms

In this paper we present new descriptive evidence from a unique survey of landlords carried out in the industrialising city of Hawassa, Ethiopia. In 2017, Hawassa saw the creation of a large industrial park employing today over 20,000 workers. We show that the rental market appears to be fairly competitive: most of the rental housing is offered by private landlords who own one or two properties.

Housing quality is also quite homogeneous. Finally, comparing rental prices in the year prior to the inauguration of the park to 2019 prices, we find a nominal increase of about 26 percent, roughly in line with overall consumer price. The market has thus seemed capable of accommodating a large number of new tenants. As the industrial park aims to double in size in the coming years, the key barrier for a future expansion of private rental housing seems to be the availability of credit.