Baghdad’s real estate booming

By BASIM AL-SHARA

BAGHDAD — While Americans have been watching the value of their homes plunge in recent years, residents of the Iraqi capital find themselves in the exact opposite situation, with long depressed housing prices skyrocketing to levels that are now out of reach for most residents.

For those who were forced to give up their homes during the worst days of sectarian violence that wracked the country in 2006, the current boom in housing prices is especially painful.

Mohammad Sadun, 59, a worker at the Ministry of Transportation, sold his house in the al-Doura district in 2006 for about $34,000.

“I felt al-Doura would never come back to life again and that the insurgents would control it forever,” he said.

His former house is worth about $128,000 on today’s market.

Value doubled

And that’s not the end of Sadun’s misfortune. His current landlord has ordered him to vacate the house he’s currently renting in the al-Hurriyah district because its value has nearly doubled in the last two years.

“House prices have risen to the point where I will never be able to buy a home for my family, not even in a hundred years,” Sadun said.

Unlike much of the rest of the world, Iraqis traditionally shun mortgages and instead purchase their homes with a single cash payment. This nation has therefore escaped the mortgage meltdown that has plunged much of the world economy into recession.

Muin al-Kadimi, chairman of Baghdad’s provincial council, said the boom is fueled in part by families displaced by the fighting returning to their old neighborhoods and attempting to reclaim their homes. Demand for housing far exceeds supply.

The city’s housing shortage actually dates back to the 1980s and has been exacerbated since then by subsequent wars and sectarian conflicts.

But during the last two years, housing prices have truly exploded.

Sami Badir, a real estate agent in the Kadhimiya district, said the biggest increases have been in the upper-class neighborhoods of Karada and Kadhimiya, where some properties are selling for hundreds of thousands of dollars.

In working-class neighborhoods like Hurriyah, Sadr and Shuala, cramped houses are selling for upward of $100,000, Badir said.

He said he is “astonished” by how the rise in prices has extended even to areas of the city that still lack basic services.

For decades, housing prices in Baghdad had been kept artificially low by a law banning those not registered as residents from buying property in the capital. That ban was lifted in 2003, however, and speculators from outside the city are snapping up properties in the expectation that prices will continue to soar.

X Basim al-Shara is a reporter in Iraq who writes for The Institute for War & Peace Reporting, a nonprofit organization in London that trains journalists in areas of conflict. Distributed by McClatchy-Tribune.