Posted on September 3, 2016 by Editorial Staff in Economy, Real Estate
Erbil, the capital city of Iraqi Kurdistan. Photo: Doctorandus Sarajevo/flickr
HEWLÊR-Erbil, Iraq’s Kurdistan region,— Property prices in Iraq’s Kurdistan Region have risen by 25 percent since May this year following a dramatic fall in the real estate market over the past two years.
The upward trend has been detected in several larger cities including in the capital where decline of housing prices forced many property firms to close their businesses last year.
“The rise involves almost all sorts of property, both residential houses and land plots,” said Haji Salam, who runs his own real estate office in down town Erbil. He said the prices have been steadily going up since May and are expected to continue upward.
The severe financial crunch that hit the Kurdish region after oil prices plummeted in 2014, had a substantial impact on housing prices in the country. The situation deteriorated further with the war against Islamic State (IS) and Baghdad freezing Kurdistan Region’s monthly $1 billion budget.
Since 2005 the Region went through a major reconstruction boom, property prices rose often without any particular regulations.
One reason behind the dramatic rise of prices before 2014 could be traced to the relatively enormous loans the Kurdish government granted to young people buying or building their homes. According to government data nearly $1 billion was loaned to young couples who applied for a home loan over the course of the last ten years. Only in Erbil some 265,000 residential houses and apartments have been built since 2005 to accommodate the growing number of people moving to the capital, according to Erbil Provincial data.
“The improvement of ties between Erbil and Baghdad has always had a positive impact on property prices,” said Rasoul Khalid who also owns his own property firm.
A top Kurdish delegation met with the Iraqi authorities in Baghdad earlier this week and reached a preliminary agreement on oil exports from Kirkuk.