Angolan government targets real estate sector

3 May 2010

Luanda, Angola, 3 May – The Angolan government is preparing legislative measures to boost and regulate the country’s real estate sector, for which it has ambitious targets related to promoting housing in a scenario of high prices.

With the laws of Construction and Housing Cooperatives, of Promotion and access to Social Housing, of Real Estate Mediation and of Urban Rental, parts of which were recently published by newspaper Novo Jornal, the Angolan authorities plan not only to boost, but also to regulate, a sector which has seen huge shifts due to high levels of economic growth.

Alongside legislation, a decree is being prepared to set the cost of land across the country in order to allow real estate promoters to offer lower prices.

According to a recent statement from the Minister for Urbanism and Construction, José Silva Ferreira, the single price will make it possible for “real estate promoters not to have to condition the value of the house to the high cost of the land.”

In the last elections the Angolan government pledged to build 1 million houses by 2012.

Luanda is one of the most expensive cities in the world for real estate and a recent study by Angolan consultancy Proprime showed that this is particularly keenly felt in neighbourhoods in downtown Luanda for office space and in the Ingombotas neighbourhood for housing.

The Luanda 2009 real estate survey, by Proprime, carried out in partnership with housing website Casa Sapo, pointed to figures of around US$385,000 for a 1-bedroom 64 square-metre apartment and US$1.2 million for a 225 square-metre 3-bedroom apartment.

In the current situation the informal market is very active, which means a loss of tax revenues for the Angolan state.

The new legislation, according to the Angolan newspaper, will give the National Housing Institute (INH) new powers, for promoting social housing developments, public tenders, providing technical assistance and drawing up architectural design projects as well as issuing technical opinions on proposals to build low-medium income construction projects.

It will also start to promote technical studies and identify an acquire land for social construction, as well as managing the entire process of acquisition or rental of low cost housing.

It will also be able to charge the prices it sets and will be responsible for inspecting real estate promotion activities, and to license operators, Novo Jornal reported.

The proposals also include focusing on a cooperative housing model, handing land with basic infrastructures over to cooperatives, whilst also giving managers and other delegates new duties, who will not be able to negotiate with a cooperative, “or personally carry out an economic activity that is the same or similar to it.”

The price of each unit is outlined in the law as the “sum of the cost of the land and infrastructures, studies and projects, construction and complementary equipment when it is integrated in the buildings, administrative and financial costs from execution of the work, licenses and taxes.”

In terms of legislation for rental, which will replace some rulings that date back to the 1867 Civil Code, it will become obligatory to draw up a written rental contract.

“Conditional” rents will also be created for rental of State buildings or of cooperatives and associations, as well as “supported” rents, which will be subsidised.

The new legislation will also establish that it is a, “crime of speculation, punishable under the terms of the legislation,” to refuse to provide a receipt for rent paid. (macauhub)