'Drastic rise' in Baghdad's real estate prices

Shafaq News / Despite the relatively poor security situation in Iraq, the impact of the economic crisis elicited by the COVID-19 outbreak, and the failure to pass a budget for 2021, the real estate market have shown immunity to these misfortunes, with the prices skyrocketing in the last two years.

According to analysts, Iraq requires more than three million housing units due to the high population index and various other factors driving up real estate prices, such as the population problem and a lack of residential complexes.

Mafia, Banks, and Population Growth

According to economist and financial expert Hilal al-Tahhan, "there are three main reasons behind the rise of real estate prices in Iraq, particularly in Baghdad. The first is corruption, which led to the emergence of large financial mafias that bought real estate in prominent and desirable areas such as al-Jadriyah, al-Mansour, and other areas."

"The second reason is that state banks began lending citizens 100-150 million dinars or more to buy houses."

"The third factor is the rapid growth of Iraq's population, which exceeded 3%," he continued, "the dispersion of Iraqi families and the lack and delayed construction of residential compounds also contributed to the spike in real estate prices," he said.

Al-Tahan pointed out, "the government must find swift and effective solutions to the housing crisis. This problem only adds to a pile of other problems, such as electricity and water, which successive governments have failed to address successfully, whether purposefully or unintentionally."

Half-hearted solutions

According to economist Amir al-Hassani, "the surge of the real estate prices in Iraq ultimately engenders from the government's failed plans to uproot the housing problem in the country; The successive government's merely worked out patchwork solutions for a long-standing crisis."

"Of course, the rapidly growing population was another element that fired up the demand for housing units, doubling the prices in the space of two years only," he added.

Planning Ministry: Construction and Complex Centers

According to Abdul Zahra al-Hindawi, a spokesman for the Ministry of Planning, "The reason is the 60% increase in construction material prices over the last two years. It was impacted by a worldwide price increase, particularly because most construction supplies, such as iron and some sanitary products, are imported."

"The high demand for housing units trumps the currently shy supply," he elaborated, "the majority of the residential units in the compounds under construction inside and outside Baghdad are beyond the financial capacity of the regular Iraqi citizen due to the high price of the lands, especially when the compound is located in downtown."

Real estate office: tripled prices

"There is currently a great demand for agricultural land that several investors have built, because it is cheaper than residential units," said the owner of al-Shams real estate office, adding, "these units are not approved for housing, but they have become a fait accompli for the citizens and the state alike."

"Some areas in Baghdad have seen a significant increase in residential unit prices in recent times, up to three times what they were two years ago," he explained, pointing out, "there is an increasing demand for some well-known areas that are characterized by being residential and commercial areas at the same time."

Mudhhir Mohammed Saleh, the Prime Minister's Financial and Economic Affairs advisor, emphasized the importance of affordable housing policy in Iraq, adding that "there is a deficit of 2.5 million housing units in Iraq."

Iraq is suffering from a massive housing crisis as a result of its rising population and limited housing complexes, as well as citizens' inability to build their own houses due to the high cost of land and construction materials.