The Median Multiple and its Implications for Housing Affordability in Addis Ababa, Ethiopia

Abstract

Housing affordability has become a critical concern in Addis Ababa due to rapid urbanization, rising housing prices, and limited income growth. This study examines the affordability of housing across sub-cities, focusing on median house prices for villas, apartments, and condominiums, and their relationship to median household income. Data were primary collected from secondary sources, including the Ethiopian Statistical Service, Ministry of Urban and Infrastructure, and World Bank reports, and informal sources, including local residents, and housing brokers. Descriptive statistical analysis, including mean, median, standard deviation, coefficient of variation and median multiple, were employed to evaluate price levels, variability, and affordability. The results reveal that housing in Addis Ababa is extremely unaffordable for middle and low income households, particularly in high-demand sub-cities, where median multiples far exceed internationally recommended thresholds. Variability in prices reflects heterogeneity in the housing market. The study highlights the urgent need for targeted policies to expand affordable housing, regulate speculative pricing, and provide accessible housing options for middle-income residents.