Shafaq News- Baghdad

For many Iraqis, buying a home has become a goal that can take decades of work and saving, as property prices outpace incomes, and the rising cost of living consumes much of household earnings.

An Iraqi earning 1 million dinars a month (about $660) who manages to save a quarter of it would need 50 years to buy a modest 150-million-dinar house (about $99,000) on the outskirts of Baghdad, even if prices stayed the same, economist Mohammed al-Hasani told Shafaq News.

A home in central Baghdad is out of reach for most people, he said, and buying in upscale neighborhoods such as Jadiriya, Zayouna and Mansour is “impossible for those on limited salaries,” with some properties priced above 1 billion dinars (about $660,000). Prices keep climbing every year, al-Hasani said, driven by population growth, a shortage of housing and the rising cost of state-built units.

Prices differ not only from one area to another but within the same neighborhood, depending on location and size, a Baghdad real estate agent told Shafaq News, speaking on condition of anonymity. Homes in Mansour, Yarmouk and parts of Kadhimiya, Karrada, Adhamiya and Saydiya have become especially expensive, with some sold in dollars.

Smaller homes can cost more per square meter than larger ones, the agent said. In parts of Dora, houses of 100 square meters built on agricultural land have sold for more than 200 million dinars (about $132,000). In poorer areas and on the city's edges, prices fall below 80 million dinars (about $53,000), while others range from 80 million to 100 million dinars. Apartments in private investment projects have topped 500 million dinars (about $330,000) in some cases.

Read more: Iraq’s deepening housing crisis

With land scarce, some owners have split properties that were once 500 or 1,000 square meters into units of 50 to 100 square meters for young families who cannot afford a home of their own, he said.

The squeeze has pushed many families to live with relatives or rent.

Issam Hamid, a secondary school teacher from Baghdad's Karrada district, wanted to buy a home because the house he shared with his parents had become too small. But his salary, just over 1 million dinars, barely covers the needs of his family of four. “I now rent a house in the working-class Zafaraniya area for 300,000 dinars a month (about $200), which further limits my ability to save,” he told Shafaq News.

Haider Ismail, a married carpenter, still lives with his parents and four siblings, two of them married, in a 200-square-meter house that has grown cramped. “I cannot afford to buy or to rent, as cheaper imported furniture has cut into my income.”

Iraq's 2024 census showed a housing shortage of about 2.3 million units, said Nabil al-Saffar, spokesman for the Ministry of Construction and Housing.

The ministry is building three large residential cities to increase supply: Al-Ward in Nahrawan and Al-Jawahiri in Abu Ghraib, both in Baghdad, and Al-Ghazlani in Mosul, al-Saffar said. The government has also launched the "Watan" initiative to distribute one million residential plots to eligible families without a home or land, and recently announced plans for 15 new urban, investment and administrative cities across the provinces, overseen by the National Investment Commission.

The new cities aim not only to expand housing but to ease pressure on provincial centers and create jobs and investment, al-Saffar said.

On October 18, the Central Bank of Iraq raised the funds available for home purchases through the state-run Real Estate Bank to 3 trillion dinars, about $2 billion, from 1 trillion dinars, for buyers of units in residential complexes, according to a central bank document. The lending conditions remain unchanged.

How much the extra financing helps will depend on lending terms and whether borrowers can afford repayments, as property prices rise and the purchasing power of many low-income Iraqis declines.