Iraqi telecommunications worker Youssef Ahmed is married with a five-year-old son, but lives with his parents because he is unable to afford his own home amid soaring property prices.
“Even if your income increases, it will never be up to the exorbitant prices of houses or land”, said 29-year-old Ahmed, who earns a “comfortable” monthly salary of $1,000, double the national average.
In oil-rich but corruption plagued Iraq, real estate has become a popular way to launder money, including stolen public funds.
Compounded by housing planning failures and an increasing demand, it has pushed prices in the capital Baghdad rapidly out of reach for many ordinary Iraqis.
Iraq’s banking system remains underdeveloped: only one in five have bank accounts, according to the World Bank.
“Real estate transactions are done in cash”, said economist Ali al-Rawi, meaning that property sales are a way to “easily and quickly hide money in land and buildings”.
Baghdad’s municipality is blunt about the cause of property price rises.
“The increase in real estate prices is not linked to the market, it is linked to the mafias and money laundering,” spokesman Mohammed al-Rabie said.
“Poor planning” by previous governments and a lack of investment in housing were also factors, he added.
– ‘Staggering’ –
The violence that devastated Iraq following the US-led 2003 invasion to topple Saddam Hussein meant real estate prices in Baghdad tumbled, or at best stagnated.
Many investors preferred to purchase property in the autonomous Kurdish areas of the country’s north, or even in neighbouring Turkey.
But in recent years, the metropolis of nine million inhabitants has returned to relative stability. Baghdad’s property market is now on the rise.
In the commercial district of Karrada, where old crumbling brick villas stand beside gleaming new buildings, the price per square metre once stood at around $1,200 to $1,700, said estate agent Samer al-Khafagi.
Today, it goes for $3,000 —