The purpose of this study is to analyze the existing nature of real estate development in terms ofrnexisting real estate regulations/directives, house production determinants, houses' affordability,rnhouse and residential pattern and developer's construction practice. The study selects this researchrnarea because of two main reasons: - The real estate sector is newly growing & economically veryrnimportant sector in one hand and on the other hand, as a new business little is known about thernsector due to the absence of researches and studies in the area.rn16 developers are selected out of 124 registered and 64 active developers operate private realrnestate houses development in the city. The research has selected 25 % of the developers, 16rndevelopers by using both purposive and proportional stratified sampli ng techniques. Purposivernsampling has been used in order to include potent ial and senior developers deliberately whereasrnstratified proportional sampling used to give the proportional chance of selection of developers atrndifferent sites and sub-cities according to their representation in the total population. Questioner,rninterview, desktop study, and observation were employed for the study.rnThe findings of this study has revealed that real estate developments in the city produce highrnquality houses which are affordable only for an especial social group like Diaspora, businessmen,rninternational NGO employee. It also found that there is high degree illegal form of developmentrnin the sector which can be expressed in form of informal construction of service type houses, sellrnof vacant land, illegal land occupation, default to pay lease payment and transfer houses with outrncapital gain tax (sa les tax) and construction on illegal settlements. This study has also fo und thatrnthe sectors sustainability is under question due to lack of construction material and fin ance in onernhand/ suppl y side of the market/ and un affordability of houses for the majority of the ci ty'srnresidents in the other hand/ demand side of the market/.rnIn order to ensure sustainable development of the sector the fin ancial and construction sector ofrnthe country should expand and support the development of the real estate industry. It is alsornrecommended that government should make regulatory reforms to relax the house constructionrncost where as developers should consider the lower and middle segment of the market rather thanrnfocused only on the higher section of the society.