8 June 2014

Ethiopia: Billion Br Construction of Additional 40/60 Houses Commenced

Approximately 860,000 people are registered across the three housing schemes - 10/90, 20/80 and 40/60

In addition to the ongoing construction of low cost houses, the Addis Abeba Saving Houses Development Enterprise (AASHDE) has embarked on the construction of new condominium houses at a cost of more than one billion Birr, Fortune learnt.

This project, which is located at the Ayat bole site, will see the construction of about 6,561 houses on a 49ha plot of land under what is known as 40/60 housing scheme. This is the ninth site for the construction of houses under this scheme.

The construction of 6,048 houses under this scheme are taking place at eight sites in four districts in city as of June 2013. The construction progress reached an average of 19.15pc in April, 2014. The highest progress achieved is at sites in Lideta District, with 45.4pc of construction completed, with the lowest progress at a site in Kolfe Keranio District, progressing by 12.4pc.

City residents registered under this scheme must save 40pc of the value of the houses within five years and the government arranges a loan for the remaining 60pc from the Commercial Bank of Ethiopia (CBE). They achieve this by mortgaging the house to be transferred to the user upon completion.

The new construction site will accommodate a total of 133 blocks with a varying number of storeys. Eighty of the buildings will have seven floors with a basement, while 35 of them will be nine storey apartments with one basement. The remaining 18 will have twelve floors with two basements.

The construction of the 12 storey buildings will be conducted by nine grade one contractors, and those with nine storeys will be erected by 16 grade two and two grade one contractors. The grade three contractors will participate in the construction of the seven storey blocks of the new site, according to Yohannes Abayneh, head of Communications at the Enterprise.

Fifty-one contractors have signed a construction agreement with the enterprise out of the total 57 contractors that will erect the apartments, according to Yenus Muhammed, general manager of the branch two office of the Enterprise. These are on the way to commence construction, while the remaining six are soon to sign a contract with the enterprise, he said.

A soil compatibility study has been finalised and the contractors are making the land ready for construction. Some already started the construction last week, Yohannes told Fortune.

It will take a year and half to complete the condominiums with 12 storeys and the nine storey blocks are due to be finished within 15 months. The third category of buildings are supposed to be finalised within close to a year's time, according to Yenus.

The average cost to construct each of the 12 storey blocks is estimated at around 17.3 million Br, whereas 13 million Br and 11 million Br will be spent on each one of the nine storey and seven storey apartments, respectively.

Upon their completion, the houses will accommodate almost 33,000 people, said Yenus.

Currently, about 164,779 individuals have registered and opened a blocked saving account at the CBE for the 40/60 housing scheme.

The houses under this scheme are designed to have one to three bedrooms, the cost of which varies accordingly.

Those with a single bedroom will cost a total of 162,000 Br and requires a monthly saving of 1,033 Br, while the two bedroom houses are estimated at a value of 250,000 Br with a monthly saving of 1,575 Br.

The houses with three bedrooms are worth 386,000 Br, with a monthly saving requirement of 2,453 Br. The monthly saving shall be made for five consecutive years and account for the 40pc of the total value of the houses.

For the current fiscal year the enterprise has allocated a budget of 1.25 billion Br for the construction of the new houses and the ongoing projects. It has also planned to start the construction of 13,881 houses at nine sites under the same scheme, according to Yohannes.

According to the current data obtained from the Addis Abeba City Administration, the estimated demand for houses stood at 311,432, whereas the total housing supply was only 70,000 units - indicating an outstanding housing demand of 233,143 units. The supply of housing units is only 22.5 pc of the demand.

In addition to the 40/60 housing scheme, two other schemes - 10/90/ and 20/80 - are also under implementation by the government, with the aim of replacing substandard accommodation in the city on top of satisfying the housing demand of the city's residents.

For these three schemes, around 865,000 people have been registered and started saving through blocked accounts they opened at the CBE.

Along with the 40/60 schemes, the construction of 122,000 houses under the 20/80 scheme and 24,000 houses under the 10/90 scheme are also underway.

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