Baghdad – Iraq’s real estate market has had a notable upswing during the last five years, notably in Baghdad, especially in the residential sector. Property prices have increased by an astounding 50% in certain areas, offering profitable prospects to investors hoping to profit from this booming market.
The causes of the real estate boom
Due to internal crises and wars, Iraq’s real estate market was mostly ignored for 20 years. But after 2020, when 57% of Iraqis were under 25, the country’s housing demand surged and greatly outpaced supply. The extraordinary levels of home prices have been fueled by this spike in demand.
Experts attribute the sharp rise in real estate prices between 2021 and 2022 to a number of variables. Some blame it on foolish practices of the Central Bank of Iraq (CBI) and the Iraqi government, which entailed issuing more than 45 trillion Iraqi dinars, most of which went into the real estate market. Some claim that certain people further inflated prices by using the real estate industry as a means of money laundering.
Market worth and possibilities for investment
The Iraqi real estate industry is now estimated to be worth over $1.1 billion, and 4.4% annual growth is predicted. The market is expected to grow to a $1.32 billion volume by 2028, providing significant returns on investment (ROI). For example, a three-bedroom Mosul home that was bought for 80 million Iraqi dinars (IQD) in December 2022 is now worth 200 million IQD, resulting in a 150% return on investment in just two years. Comparably, a two-bedroom apartment in Baghdad’s Iraq Gate Complex that was bought for $300,000 in 2022 is currently valued at $450,000, indicating a remarkable 50% return on investment in just two years.
Challenges confronting Iraq’s land area
Notwithstanding its promising development, Iraq’s land area faces a few difficulties:
· Political Flimsiness: Stability in the market continues to be impacted by internal and regional conflicts.
Problems with the bureaucracy: Getting fundamental grants and endorsements for land exchanges can be a bulky and tedious interaction.
Uneven Construction of the Infrastructure: The lack of roads, water supply, and electricity in some areas makes them less appealing to investors.
Market based on cash: International buyers will find things more difficult because the market only accepts cash transactions. High bank charges and postponements related with global bank moves further compound the issue.
Future outlook and government initiatives
Experts and government officials anticipate a possible decline in property values in prime areas like Mansour, where prices hover around $4,000 per square meter. The Iraqi government is actively developing new cities around Baghdad, offering properties at prices that are more reasonable, and it is taking steps to regulate the sale of units within apartment complexes.
For instance, the Ministry of Construction and Housing has made the announcement that apartments in the Jawahri Residential City, which is on the outskirts of Baghdad, will be sold for 900,000 IQD per square meter. Other cities, on the other hand, are offering apartments for prices around 850,000 IQD per square meter.
Protected and productive speculation choices
While Iraq’s housing business sector can be perplexing and full of dangers, certain regions offer more secure venture amazing open doors. Experts advise concentrating on cities like Karbala, Najaf, Mosul, Anbar, and Tikrit that are experiencing an increase in both their population and the demand for housing. Despite the fact that these cities may not provide the same high returns as Baghdad, they are thought to be safer investments. Additionally, it is considered safe and potentially very profitable to invest in the suburbs and surrounding areas of Baghdad.
