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Property Bubble in Iraq

572 Views 1 Reply 2 Participants Last post by  sheytanElKebir
Property prices rose fast in Baghdad in recent years, going up 50% and even 100% in many places. Now, Nina News reports that property-price rises in Wasit Province, halfway between Baghdad in central Iraq and Basra in the south-east, are “insane”.

Prices in the province are far exceeding those of neighbouring ones. The price per square metre in some areas of the capital Al Kut, on the river Tigris, now exceeds the prices of comparable properties in many developed countries, such as Norway, with the price per square metre now 1m dinars (US$860).

House prices have risen during the world economic crisis, despite food, cars, energy and other supplies falling in price. The blame is split between speculators and lack of supply. Social changes, with more divorce and more families splitting into smaller units, is also cited as a contributory factor.

Professor of Sociology Mohammed Saleh believes that more housing units need to be created for younger people and the right to re-sell should be postponed for 20 years to control speculation.

The Iraqi government is looking to build at least two million housing units in order to remove the shortage of liveable properties in Iraq.

(Source: Nina News, Iraq Business News)
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its a similar story everywhere in Iraq.

I can report that in parts of Karbala and najaf prices are over $2000/m, similarly in samawa and nassiriya prices in prime areas are about $1000-1200/m

This is because government is not releasing cheap land for construction, and not building the "basic services" (road/sewage/powerlines) to establish new neighborhoods.

Thus the result is hundreds of thousands of people living in "hawasim" slums around the cities and in public squares / abandoned buildings...

Another key point is that the cost of construction is rather high in Iraq (a contractor charges about $500/m for building a nice house), a "luxury" house with double glazed windows/insulation/central AC goes for $800/m+

we sorely need better developers in Iraq with more modern construction techniques (prefabs / precast) with modern insulation / centralised services.

We also need the "land monopoly" (the finance ministry of Iraq owns 95% of Iraq's land mass) to release land for housing, rather than keeping everything artificially high so that they and their speculator chums can benefit by drip feeding land into the market.
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