The U.S. Embassy in Baghdad
Despite the current political upheaval in Iraq, one area of the economy is already starting to recover – the Baghdad housing market. House prices fell through the floor last year as bombings and kidnappings increased. But as some stability begins to emerge from the rubble, the housing market has poked it’s head up from behind a parapet and said, ‘open for business.’
Many displaced Iraqis are returning home as the violence in the capital is beginning to decrease. But homes in safe areas are in short supply, forcing prices to rise dramatically. Unlike a typical London suburb where the house prices may be dependent on the closest decent school, which political faction controls the neighborhood has a lot to do with the price. People who sold at bargain prices and have now returned are finding that prices for the same housing are now out of their reach. Most Iraqis part cash for their properties and, as yet there is no organized mortgage system available.
One such unfortunate, Jassem, sold his five bedroom home in 2005 for $75,000 and is finding the same property priced at $165,000 now.
Selling prices have doubled in some neighborhoods and less expensive housing is being snatched up almost as soon as it is listed. Some are saying it has become almost impossible to find affordable houses. A 750-square-foot home in a lower-middle-class neighborhood costs about £75,000. In the upper-middle-class neighborhood of Karada, a 2,300-square-foot plot of land alone costs £175,000.
Baghdad estate agent, Mohammed Hassan said, ‘The displaced people are coming back ‘ There is plenty of demand, but I have nothing to supply them with.’
The smallest homes are the quickest to sell, and the Iraqi tradition of an extended family under one roof is causing some pressure.
At the higher end of the market, million pound houses are being snatched up by Iraq’s new elite. The war created many opportunities for those prepared to profit from the situation.
Recently there has been a noticeable increase in land and property advertised for sale on the internet, and here is an example:
This plot of land in Al Amiria, a residential area is 450 sqm and offered for sale at $175,000 US via baghdadproperty.com
We are not sure we see Baghdad as the next Benidorm, with hordes of Brits heading in to buy up everything in sight and open a karaoke pub called the ‘Singing Mullah,’ but it certainly shows the resilience of the global property market.