Floor prices see substantial increment
The Addis Ababa City Administration’s Land Development and Administration Bureau is preparing to transfer 109 plots of land to investors. The land lease auction will resume in the next few weeks after it was halted for years.
The bureau is set to send the auction documents for printing at the end of this week.
The plots are allotted for residential, commercial, and mixed-business purposes in all the 11 sub-cities. The plots are categorized into four levels.
The first category includes plots found in affluent parts of the central parts of the capital city, while the fourth level is located in the outer reaches of the city. The plots include lands that remained undeveloped and fenced for a long time.
Land is basically supplied through two mechanisms. The government directly provides land for public institutions, public projects, and public service providers like health, education, condos, and utility projects. But private developers access land through land lease auctions.
Even though the city administration planned to conduct land auctions every month, it has failed to do so since 2017, following corruption and malpractices in the process. It has managed only three rounds of auctions since 2017.
As a result, the land demand and supply gap in the capital city has widened. This, in turn, has skyrocketed property prices. The shortage of land supply in the city has also underpinned inflation across other markets.
The bureau has also introduced new floor prices for the upcoming auction with a price revision conducted by Addis Ababa University. Based on the location of the plots and their purpose, the prices are also categorized into four levels.
The floor price of level one plots in the heart of the capital is set at 2,213 birr per square meter. The floor price for the plots located on the outskirts of the city is set at 748 birr per square meter.
The floor prices for all have substantially surged compared to the existing floor prices.
The bureau intends to continue the land auction periodically this time, according to officials of the bureau, with both manual and digital auction management systems deployed to avoid corruption.
However, experts recommend the government change the land policy and privatize land holdings.