Housing market is one of mechanisms that transfer ownership rights of a house with arncombination of different attributes, which defined by its prices. The process and procedure inrnhousing market is complex. Market participants lack sufficient information to undertakerntransactions. This research was initiated to investigate how the residential land lease market isrnfunctioning within the Mekâ€™ele city in different modalities of transaction that has been fluctuatedrnunpredictable price for the last decade; the procedure of land transaction and how the brokersrnaffect the transaction is examined in this paper. The winning price of lease auction andrnsecondary market is also examined in relation to location and time. The researcher applied arnconcurrent explanatory/exploratory mixed research method. Six round Land auction datarncollected, focused group discussions, in-depth interviews conducted and sufficient desk reviewrnmade. The result of the study suggested that the price of lease auction has increasedrntremendously over a short period. The study shows that the lease auction market is not healthyrnand it is unpredictable. Even though the secondary housing market is facilitated by, the brokersrnbut they do not have legal framework and encouragement by the city administration. However,rnthe brokers have a negative impact in the lease auction by increasing the price. The houserntransaction system is complex, bureaucratic and exposed to rent seeking it is also not systematic.rnThe man power and finance in not strong enough to make the market healthy I recommend thatrnenough land should be supplied both in lease and allotment modality. This means before leasingrnthe land; there must be land demand identification, proper planning, land banking and providernnecessary infrastructure are the mandatory function to minimize the supply and demand gap ofrnthe land.rn.rnKey words: Formal land market, informal land market, primary land market, secondary landrnand housing market, factors affecting land and housing market