Shafaq News/ Iraq’s real estate market is facing stagnationas property prices continue to soar, making homeownership increasinglyunaffordable for most citizens. Experts cite rising inflation, politicalinstability, and corruption as key factors contributing to the market’sparalysis
Property Prices in Iraq Soar, Market Stalls
Mustafa Akram Hantosh, a Financial and Banking expert, toldShafaq News that “Iraq is experiencing a paralysis or stagnation in the realestate market, rather than a decline. Property inflation has exceeded 120% overthe last three years, a rate that does not align with increases in publicsector wages or profits.”
Hantosh explained that residential unit prices start at 150million dinars (About $115,000) and above, making it unaffordable for mostcitizens. "Those who can afford to sell are currently the ones who canbuy," he continued.
The inflation in property prices is much higher than thegrowth in citizens’ incomes, leaving most unable to purchase unless there arelending policies, land distribution plans, or affordable housing projects withsimple installment plans, such as those in Bismayah and al-Jawahiri, he pointedout.
Stagnation and Inequality
Economic researcher Ahmed Eid stated that “the sharp rise inreal estate prices and the decline in citizens' purchasing power have led to astagnation in Iraq's real estate markets across various provinces. The markethas become limited to high-income areas, such as residential compounds andinvestment zones.”
Speaking to Shafaq News, Eid also noted that “corruptindividuals and influential figures have turned to real estate as a means ofmoney laundering and investment, particularly after the US Treasury and theFederal Reserve imposed strict controls on funds transferred out of Iraq, whichhad previously been used by corrupt officials to launder illicit money.”
Eid emphasized that the Iraqi public is bearing the brunt ofthese issues, resulting from “flawed policies and the lack of a strategicvision for wealth distribution and social justice.”
“Social stratification has increased under the currentpolitical system, where corrupt individuals have seized the nation's resourcesacross various sectors,” he added.
Speculation and Global Instability
In an interview with Shafaq News, Economic expert KarimAl-Hello announced that “the original goal of residential compounds in Iraq wasto solve the housing crisis by providing homes for those who did not own one.”However, this requirement was lifted in 2018, allowing traders to enter themarket, purchase thousands of housing units, and sell them at inflated prices.
Al-Hello further explained that “the exploitation of theseresidential compounds for money laundering by individuals with large sums ofillicit money, resulting from administrative corruption, has also contributedto the rise in prices.” However, according to Al-Hello, following the events inPalestine and Lebanon, there was a fear of purchasing property due to concernsover potential instability and the possibility of Iraq being targeted inretaliation for the involvement of certain Iraqi factions in the conflict withIsrael.
“This has led to a period of hesitation in the market.”
The construction of new housing complexes and the allocationof some of them to workers and unions affected and confused the real estatemarket, with expectations that prices would come down. Vertical constructionhas also contributed to lower prices, alongside global market uncertaintiesfollowing the election of US President Donald Trump, with investors watchingfor the impact of his policy decisions on the global economy, he highlighted.
Political Factors
Economic researcher Abdul Salam Hassan Hussein believed thatIraq's economic situation is "very good," and attributed thestagnation in the real estate market to political factors, despite theachievements touted by Prime Minister Mohammed Shia al-Sudani.
He argued that these achievements are general and do notdirectly benefit the Iraqi people. Hussein also pointed to recent comments byShiite cleric Grand Ayatollah Ali al-Sistani, which highlighted the causes ofgovernment failure and placed blame on the administration.
Speaking to Shafaq News, Hussein explained that “theelection of US President Donald Trump will exacerbate the situation for theIraqi government. Trump is dissatisfied with the current Iraqi leadership andholds control over the dollar,” making the stagnation in the real estate marketa political issue.