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BAGHDAD: Yusif Ahmed, married with one child, still lives with his parents. At the age of 29, this Baghdadi one day lost hope of buying his own house in the Iraqi capital, where real estate prices have soared.
Amidst inadequate planning and speculation fueled by money laundering in one of the world’s most corrupt countries, owning a home is a retreating dream for much of the middle class.
In recent years, the metropolis of nine million people has regained relative stability, and gleaming towers have begun to sprout.
Due to the increase in demand, the price of a square meter in some neighborhoods exceeds $ 8,000 – when the average salary reaches $ 400 or $ 500.
“Even if your income increases, it will never be as high as the exorbitant prices of houses or land,” concludes Youssef Ahmed, a telecoms worker.
Comfortable – even with a monthly salary of 1,000 USD, a bank loan does not allow him to buy an apartment for his wife and five-year-old son, because “interest rates are high”, currently between 5-10%. 29 years old.
And “if you move away from the center, there’s a traffic problem – and yet prices don’t drop that much.”
“I thought a lot, there is no choice,” he cries.
“Amazing Growth”
After the 2003 American invasion that toppled Saddam Hussein and was marked by civil war and jihadist demands, individuals and investors often preferred to buy real estate in autonomous Kurdistan in the north. abroad, often in Turkey.
But now that Baghdad has regained some semblance of normalcy, real estate is booming.
In the commercial district of Kerrada, where old crumbling brick villas rub shoulders with new buildings, the price of a square meter used to be “$1,200 or $1,700, but now it’s $3,000, sometimes even $5,000,” says Samer al-Khafaqi. agent for eight years.
“The market is growing,” he confirms, explaining that the trend has accelerated over the past year.
In the Jadriya district, which is very popular with the new political and economic elite, the same observation shows that a square meter is selling for $4,000, or even $8,000 for commercial purposes, according to his colleague Hussain al-Safar, who says there is “strong demand”. real estate’ and ‘stunning price increases’.
And the sector is conducive to money laundering: real estate bought with fake money can be later resold under a formal contract, thus giving the air of respectability to dirty money.
Because the banking system is still underdeveloped — only one in ten Iraqis has a bank account, according to the World Bank — “real estate transactions are done in cash,” says economist Ali al-Rawi. A method of “easily and quickly hiding money in land and buildings”.
“Money Laundering”
A phenomenon recently illustrated by yet another corruption scandal: in the fall, he discovered that $2.5 billion had been stolen from the state tax authorities, and Prime Minister Mohamed Chia al-Soudani explained that the return of funds has become difficult. the fact that the money went “to purchase significant real estate in prestigious areas of Baghdad.”
“More than a billion dollars” of this money was invested in “55 properties in Baghdad”, and another billion was converted into “property, land and other assets”, – explains Sajad Jiyad, an employee of Century International think tank.
Mohamed al-Rabie, the communications manager of Baghdad’s mayor’s office, says clearly that “the increase in real estate prices is not related to the market, it is related to mafias and money laundering.”
It also acknowledges previous governments’ “poor planning” of “investment in housing” and public policies that “benefit neither public servants nor the poor”.
However, Mr Soudani’s government has recently emphasized its desire to build affordable housing for the poorest. Meanwhile, a million people live in informal settlements in Baghdad.
Outside the village, the lush farmlands and palm groves that Iraq is famous for have given way to concrete – more profitable than produce.
