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Experts: Money laundering crimes have exacerbated the housing problem
Economical 10/08/2023
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Baghdad: the mainstay of the emirate
Economic affairs specialists have identified a number of factors behind the continued rise in real estate prices in Baghdad and the rest of the provinces, which they described as “insane,” placing at the forefront of those reasons the presence of a huge monetary mass that moves without controls, which has led to an expansion of demand for housing and land, stressing that the other factor is It is represented by intense pressure and surveillance to prevent the smuggling of huge amounts of money abroad, which has prompted its owners to invest it in buying real estate.
Real estate prices have been witnessing continuous increases for long periods, which have had a striking impact on people with limited incomes who face extreme difficulties in purchasing them, despite the expansion in the construction of residential complexes, whose prices have also witnessed significant increases, which has led many observers to ask the government to intervene. As a competitor in building housing units and selling them to employees and retirees at reasonable prices with the aim of reducing the “crazy” rise in real estate.
In the midst of this, economic experts criticized the cessation of specialized government banks from granting construction loans and the purchase of housing units, stressing that this measure exacerbated the needs of the middle and poor segments, stressing the need to allocate sufficient funds to be granted to employees, retirees, and workers in the private sector with “zero” loans for the purpose of purchasing or Construction of residential units.
Researcher and academic Dr. Abdul Karim Al-Issawi pointed out to “Al-Sabah” that “one of the most serious social problems facing Iraq is the problem of demographic changes represented by the movement of families from the countryside to the city after the decline of the agricultural sector in absorbing the labor force from the countryside, which lost job opportunities in this country.” The sector is a result of trade openness and the uncontrolled entry of food and agricultural goods from neighboring countries, as well as the drought wave and the decline in revenues from the Tigris and Euphrates rivers.”
Al-Issawi pointed out that “the process of housing transformation from the countryside to the city created competition for various housing units after the increase in the citizen’s cash income and the change in income elasticities of demand and the resulting increase in demand for housing units, and in view of the lack of growth of those units, which was offset by increased demand and a high rate of growth.” Population growth has led to crazy increases in real estate prices, stressing that these increases directly contributed to the increase in slums inside and outside the main cities as a result of the inability of vulnerable groups to purchase a housing unit.”
Al-Issawi believes that “successive governments were unable to address the problem of the increasing demand for housing units, but solutions are possible if the correct population policies are available, which include establishing new cities with well-studied specifications to accommodate the demand for housing units, and expanding local and foreign investments in this field under Strict regulatory conditions, calling at the same time to double support for the agricultural sector in rural areas with the aim of reversing migration from the city to the countryside.
For his part, the specialist in economic affairs, Dr. Amr Hisham, says: “Despite the increase in the supply of residential units, whether built within regular residential complexes or that were divided up randomly and unconsidered as part of meeting the rising demand, or through the channel of agricultural lands and converting them into residential homes in an inappropriate manner.” Legally, all of this did not curb the rise in real estate prices, and this may be due to their limitations or the fact that they are not serviced, indicating that there is another aspect that contributed significantly to the rise in real estate prices, especially in Baghdad, resulting from the pumping of a huge mass of cash to purchase real estate, which led to unjustified increases
. .
Hisham also believes that “the issue of supporting the purchasing power of the middle class through the Central Bank initiative gave an impetus to demand, which led to the continued prosperity of the real estate market and the absence of a decline in prices and opened the appetite of investors to enter this field,” noting at the same time, that “many other factors were It has a direct role in the exacerbation and inflation of real estate prices, including increasing the real purchasing power of individuals and money laundering, stressing the possibility that the momentum will begin to slow down if demand factors are curbed and legalized towards finding alternatives for the poor and middle classes so that they can find decent housing.”
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