Construction in Baghdad [Credits: James Gordon via Flickr]
Baghdad’s property market has experienced a new breath of life in recent months after being stagnant for some time due to excessive violence. This was prompted by a dramatic fall in violence. While most real estate agents saw themselves jobless when sectarian killings raged in the city only last year, now they can’t seem to keep up with the new found demand.
Prices for real estate in some parts of Baghdad have all but doubled since 2007 and many of these properties sell instantly once they are on the market. Leases are also hot property for many which creates a huge vacuum right now as available real estate is rare indeed.
Abdullah Jasim of the al-Noor real estate agency said: “Last year there was lots of real estate to sell and no buyers. Now it’s the opposite. There’s not enough for sale. If you put something up for sale, it’s immediately sold.”
Since violence dropped to a four year low, the Iraqi government has urged millions of Iraqis to return home. They are even sponsoring flights to get some of them back home.
Despite the positive side there are still shadows as efforts to reunite Shi’ites and Sunni Arabs proof challenging. This has resulted in the creation of exclusive sectarian enclaves to separate the sects in order to keep peace.These new districts are one of the major reasons why the property market has surged forward with so much power in recent months.
“Districts are now reserved for each sect … everyone knows that if you go to this area, you’re this sect, and if you go to that area, you’re that sect,” said Realtor Mahmoud al-Mokhtar.
At present there are 2.8 million people displaced in Iraq. Most of them hail from Baghdad. When a wave of violence struck the city in 2006 when a revered Shi’ite shrine was bombed, most of them fled Baghdad. At the height of the chaotic war, dozens of people were killed by sectarian death squads each day, dumping their bodies in the streets.
Now that many of the Shi’ites who fled the Baghdad district of Karkh come back, they choose to live with their co-faith in Rusafa. In neighboring and smaller Karkh, once home to the notorious al Qaeda hot spot Haifa Street, prices have doubled in the last six months. A deluxe three-bedroom 150 square meter apartment in Karkh now costs $130,000.
Some returning locals prefer to pay more for security by looking to live outside the secular areas. Many of them are shocked to return to the current market prices. To some of them, the costs are so high that they can’t pay for a property, while others happily pay extra, as long as they are grouped within educated areas where people don’t care about religion and sects.
Some families couldn’t even access their homes because they were being occupied by squatters. However, the government has now instigated strict eviction methods to get these people their homes back. Market observers also think Baghdad to be a good long term investment because of the ever increasing securities in the city.
Tarin Hills in Erbil – Iraq’s first Masterplanned Off Plan Development
Thousands of families flock to Abu Nawas Street, a tree-lined avenue on the banks of the Tigris River on weekends where they play and relax in a newly renovated park. In July, the foundation stone was also set for new luxury hotel in Baghdad. Many great investment opportunities are being created as we speak. One major development has also continued to attract a lot of attention. Tarin Hills in Erbil is Iraq’s first ever Off Plan investment property development.
One dark shadow in all the positives is created by the continuous instability in Sunni-dominated Hay al-Jami’a. Hay al-Jami’a was once one of Baghdad’s wealthiest districts, But the instability forces prices to depress. On the contrary, in Kadhamiya, a mostly crowded, low-to-middle class and predominantly Shi’ite district of north Baghdad, prices have rocketed.
One trump card Realtors are using is the close by location of a famous Shi’ite shrine. The shrine of Imam al-Kadham is one of Shi’ite Islam’s 12 imams and attracts tens of thousands of Shi’ite pilgrims every year. While Shi’ite ceremonies were curbed under former Iraqi leader Saddam Hussein, they are now taking off big time with a huge surge in religious tourism.