This paper explores the theoretical perspectives of sustainable real estate development in an emerging developmental state, taking Ethiopia as a case study. The paper argues that the contemporary notion of real estate development sets aside the developmental state political economy approach which allows government involvement in the sector; rather emphasis is given to the economic growth perspective that gives priority for the market interaction of demand and supply. This conceptual paper points out the main theoretical perspectives on sustainable residential real estate development that prevail in the contemporary world and their application in emerging economy developmental states. Taking this into consideration, the aim of this paper is to look at a sound residential real estate development perspective for the emerging economic developmental states political economy, which maintains sustainability and optimizing equity and efficacy. It also reveals the existing empirical research gaps in the area of residential real estate development practice, which contributes to sound decision and policy measures for harmonious and sustainable development in the area. The paper puts forward policy options as well as adding inputs on the inclusive sustainable real estate development approaches theoretical perspectives, which will be compatible for emerging developmental state political economy.