Condos’ Prices Hit the Roof, Addis Fortune
23 September, 2008
The Addis Abeba City Government Cabinet has approved a more than 50pc increase in the price on condominiums due to the soaring cost of construction materials.
In 2005/2006, for instance, the price set for studios – a single room house that has a width ranging from 58 to 137Sqm – was 655 Br per square metre, while the latest price rate puts the same kind of condo at 1,110 Br per square metre.
A two room condo, which used to sell for 950 Br per square metre is now worth 1,415 Br, whereas the price of a three room house, which used to be 1,110 Br, has now climbed to 1,728 Br.
The initial price for the auction of commercial condos has risen to 2,357 Br per square metre from 1,500 Br.
“The construction cost of condominiums is increasing by 13pc every year. Even so, the government is subsidizing the public during the sales,” Gethachew HaileMariam, head of the city’s Works and urban Development Bureau told journalists during a press conference held last Friday, September 19, 2008.
The city administration has plans to construct 80,546 houses this budget year. This includes the completion of 9,046 houses begun in 2005/06, 33,000 houses begun in 2006/07 and 38,500 houses planned for next year.
There is also a plan to construct 20pc of another 55,000 houses and prepare for the building of 66,000 more.
Although this project is estimated to cost 5.7 billion Br, the administration allotted only 2.5 billion Br for it. There was, however, a promise that additional funding would be allocated to the building scheme based on its performance.
The project office has estimated that it will earn 3.3 billion Br from the transfer of houses next budget year.
The responsibility to transfer the houses had been given to the city’s Housing Agency. However, a prevalent lack of capacity prompted government authorities during the Caretaker’s Administration to pass over the responsibility to the Houses Development Project Office, the city government agency also in charge constructing houses.
About 26,000 condos have so far been transferred to beneficiaries and for the first time since it took office, the new Kuma Demeksa-led administration has a tentative schedule of raffling 10,000 more on September 28, 2008.
Along with this, the administration will also auction about 800 condos designed to be used as shops.
Winners are expected to immediately pay 20pc of the price and the house should be handed over to them within a month, or else they would lose the condos they got on raffle to other people on the waiting list, Tsedela Mamo, head of the Project Office said.
Previously, when condos were transferred through auctions, the winners used to pay 100pc of the cost to get the house they contended for. The city government later reduced it to 40pc in order to attract a larger number of contenders.
The condos scheduled to be raffled on September 28, 2008 are located in Gofa and Gotera areas, which are among the 33,000 whose construction started during the Caretaker Administration’s term.