· Addis Fortune · Nahom Ayele
Addis Abeba Reprices Land Market, Sends Lease Costs Soaring
Topics:LandLaw and policyMarket
Summary of the Addis Fortune report
Addis Abeba has approved new benchmark lease prices and a 30-category grading of plots. The top benchmark for auction and regularised plots rose 357 percent to 10,108 Br a square metre. The new figures apply to conversions, to unpaid lease balances and to valuations, so holders who still pay for their plots face higher bills.
Key points
- The city cabinet approved a new benchmark schedule that expands plot grading from 18 to 30 categories.
- The maximum benchmark for grade one plots rose from 2,218 Br to 10,108 Br a square metre, and grade two from 1,327 Br to 8,070 Br.
- In the eighth auction round, 134 plots averaged 13,101 Br a square metre, and one plot in Kolfe Qeranyo reached 156,080 Br.
- The new benchmarks apply to conversions and regularisations, unpaid lease balances and valuations for collateral or court cases.
Real.et analysis
Addis Fortune reports that the Addis Abeba City Administration Cabinet has approved new benchmark lease prices after a pause of two years. The schedule follows the 2024 amendment to the urban land lease law. It raises minimum prices and expands the grading of plots from 18 categories to 30. The bureau uses two tables: one for land given by allotment, and one for plots transferred by auction or regularisation.
In the second table, the maximum benchmark for grade one plots rose from 2,218 Br a square metre to 10,108 Br, an increase of 357 percent. Grade two rose from 1,327 Br to 8,070 Br. Plots on the outskirts rose from 814 Br to 3,254 Br. For allotment, a cabinet decision in June last year lifted the prime benchmark to 60,688 Br and the minimum from 2,800 Br to 16,355 Br.
Auction prices are higher still. In the eighth auction round, a square metre in Kolfe Qeranyo District leased for 156,080 Br. The 134 plots in that round averaged 13,101 Br a square metre.
What this means for leaseholders
The new benchmarks apply in three cases: when an older holding is converted to leasehold or regularised, when the city recalculates unpaid lease balances, and when a valuer prepares a figure for collateral, a court case or an investment. The report says leaseholders who still pay for their plots must clear the balance at the updated benchmark. One auction winner told the paper that he expects higher payments than he planned for.
- Ask the land office for your balance. Get the recalculated amount and the schedule in writing.
- Check your contract. Compare the demand with the price and terms you signed.
What this means for buyers
A plot or house with an unpaid lease balance now carries a larger debt. Ask the seller for proof of the balance before you agree a price. For an old holding without a lease, add the cost of conversion at the new benchmark. An official told the paper that banks and courts use the updated benchmarks to value collateral. That could raise the assessed value of land you offer as security.
Our land lease guide explains benchmarks, auctions and payment terms. Read about an earlier land auction in Addis Abeba and see the house prices guide for prices by area.