Real Estate in Iraq: greedy officials, corrupt investors, and homeless citizens
Shafaq News / Iraq needs between three and three and a half million housing units, according to the Ministry of Planning, to address the deficit between the number of households and available houses. The ministry said that in order to solve the issue, the government has given away 500,000 residential plots of land for citizens. Additionally, there are new residential city projects in all governorates, similar to Bismayah City in Baghdad, as well as activating and encouraging the private sector and investor investment in the housing sector.
However, the parliamentary investment and development committee believes that investment projects will not help solve the housing crisis, but rather that investors should be required to contribute a certain amount to every housing investment made for workers or low-income individuals who do not have a place to live.
While experts point to various causes for the country's current real estate boom, they emphasize that the only way to address the issue is to support the housing market by creating subsidized homes for the underprivileged and other targeted sectors of society at cost only.
Mall or residential unit?
In response to the housing crisis, Um Aliaa, a resident of Babel governorate, stated that "the majority of citizens are currently experiencing economic instability, and what we are witnessing from the abundance of malls, shops, and cafes being built will not benefit citizens as much as building low-cost houses."
She said, "The increase in the US dollar exchange rate against the Iraqi Dinar impacted real estate prices and rentals, as the cost of purchasing the smallest property in the central governorates reached $40,000, and the lowest rent price is 200,000 dinars per month. Therefore, the government must provide affordable housing for citizens who earn 15-20 thousand dinars per day because they cannot buy or rent at these costs."
Furthermore, Abdul Zahra al-Hindawi, a spokesman for the Ministry of Planning, noted, "The most recent projection from the ministry states that by the end of 2022, 42 million people were registered as permanent residents in Iraq. Males and females in the governorate share this number, with 49% females and 50.5% males. Baghdad took the top spot with nine million residents, followed by Nineveh with four million, Basra with three million, and then the remaining governorates, with al-Muthanna governorate having the fewest people at roughly 900,000 people."
He pointed out that "the country needs between three to three and a half million housing units to fill the gap," adding that "the government program prioritized the housing sector and began to allocate and distribute 500 thousand residential plots of land to citizens."
"In addition to other projects, there are new residential projects in all governorates similar to Bismayah City. Additionally, the private sector and investors, in general, will be encouraged to invest in the housing sector to address the housing shortage in Iraq."
"There are investment housing projects. However, they will not address the housing issue," said Suzan Mansour, a member of the parliamentary investment and development committee. "Their high costs make it difficult for low- or even middle-income people to purchase apartments or houses in them."
She suggested allocating some apartments for employees or low-income households in each project.
"The reasons for the recent rise in real estate in Iraq are increased demand, money laundering in real estate, and the gluttony of officials to acquire expensive real estate in Baghdad, as well as residential complexes," according to economist Ahmed Fadi.
"Those mentioned above, as well as the greed of investment companies that often triple the prices without supervision or accountability, led real estate prices to skyrocket."
The only option, he suggested, is for the government to "construct subsidized buildings at cooperative costs for the impoverished classes and certain groups of society, including the employee classes or the middle class, with payments paid over 20 or 30 years, as is done in other countries that support the housing sector."
According to Fadi, "the investment field in Iraq has reached very high levels, and not even the middle-class citizen and employee will be able to meet them," particularly given the increase in the dollar. In addition, the real estate bank stopped financing due to price inconsistencies, which greatly exacerbated the issue."
"The prices of apartments have risen by at least 100 million dinars in more than one residential complex inside Baghdad, while villas or houses with an area of 250 or 300 meters have reached prices of at least 150 to 200 million dinars," Fadi concluded.