In Baghdad, real estate is on the rise, also driven by money laundering

Between inadequate planning and speculation fueled by money laundering in one of the most corrupt countries in the world, becoming a homeowner is a dream that is receding for a large part of the middle class.

In recent years, the metropolis of nine million inhabitants has regained relative stability and gleaming towers have begun to sprout.

Driven by the explosion in demand, the price per square meter in some neighborhoods exceeds 8.000 dollars, when the median salary peaks at around 400 or 500 dollars.

"Even if your income increases, it will never be up to the exorbitant prices of houses or land", summarizes Youssef Ahmed, employee in the telecom sector.

Despite a comfortable monthly salary of 1.000 dollars, a bank loan would not allow him to buy to house his wife and their five-year-old son either because "the interest rates are high", between 5 and 10% currently, adds 29 year old man.

And "if you move away from the center, there is the problem of transport and even so, the prices do not drop that much".

"I thought a lot, there is no solution," he laments.

"Huge increase"

After the 2003 American invasion that overthrew Saddam Hussein – and inaugurated a bloody period marked by civil war and jihadist abuses – individuals and investors often preferred to buy real estate in autonomous Kurdistan, in the North, relatively spared from the violence. , even abroad, often in Turkey.

But Baghdad having now regained some semblance of normality, real estate is on the rise.

In the commercial district of Kerrada, where old crumbling brick villas rub shoulders with new buildings, the price per square meter, formerly "1.200 or 1.700 dollars, now reaches 3.000 dollars", even sometimes 5.000 dollars, says Samer al-Khafagi , real estate agent for eight years.

"The market is growing," he confirms, explaining that the trend has accelerated over the past year.

Same observation in the district of Jadriya, very popular with the new political and economic elite, where the square meter sells for 4.000 dollars, even 8.000 dollars for commercial use, according to his colleague Hussein al-Safar who confirms "a strong demand real estate" and a "staggering rise in prices".

And the sector is conducive to money laundering: real estate purchased with fraudulent funds can then be resold under a formal contract, thus giving dirty money an air of respectability.

As the banking system is still very underdeveloped, only one Iraqi in ten has a bank account according to the World Bank, "real estate transactions are done in cash", underlines the economist Ali al-Rawi. A way to "easily and quickly hide money in land and buildings".

"Money Laundering"

A phenomenon recently illustrated by yet another corruption scandal: in the fall, the State revealed that it had discovered that 2,5 billion dollars had been stolen from the tax authorities and Prime Minister Mohamed Chia al-Soudani explained that the return of the funds was complicated by the fact that the money had gone into "the purchase of 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 of the think-tank Century International.

"The increase in real estate prices is not linked to the market, it is linked to the mafias and money laundering", asserts bluntly Mohamed al-Rabie, communication manager for the town hall of Baghdad.

He also acknowledges the "poor planning" of previous governments regarding "investment in housing" and public policies that have "benefited neither civil servants nor the poor".

However, the government of Mr. Soudani recently underlined its desire to build low-cost housing for the poorest. Meanwhile, a million people live in Baghdad in informal settlements.

In the periphery, the agricultural lands and other luxuriant palm groves that have made Iraq's reputation, have given way to concrete, which is visibly more lucrative than crops.