ERBIL, Kurdistan Region—Brokers like Taha Qadir in Erbil have seen ups and downs in the Kurdish real estate business over the past decade. Truth be told, he says, business had been good since 2003 when the Kurdistan region enjoyed a major reconstruction period funded by rising oil sales from Baghdad.
“Now I sell maybe only one property a day if I’m lucky enough,” said Qadir, who runs the Hawnaz real estate market in downtown Erbil. “I’ve never seen anything like this in my time.”
Qadir has been in the property business for a whole decade. And he is not mistaken. When he started in 2005, the region experienced a period of economic boom with as high as 12 percent growth until early 2014.
“I have no idea what happened,” Qadir said. “Our sales have dropped by maybe 80 percent.
“In some neighborhoods it’s all dead.”
One reason behind the dramatic rise of prices could be the massive amount of loans the Kurdistan Regional Government (KRG) granted young people buying or building homes. According to government data, nearly $1 billion has been given to young couples who in the past 10 years applied for a home loan. In Erbil alone some 265,000 residential houses and apartments had been built to accommodate the growing number of people moving to the capital, according to Erbil Provincial data.
But things have changed. Today, the region finds itself in a dire economic crisis.
Mustafa Khider Karim runs a real estate office in Sarbasti district in Erbil. He said he believes it is too soon to speak about any bubbles bursting. He says the demand is still very high in Kurdistan for properties and people can still afford homes.
“Our economic disputes with Baghdad and this bloody ISIS war, and the fact that employees haven’t received their paychecks for months, impacts prices,” Karim said.
He admitted that the market is so bad these days some of his fellow brokers have not even been able to pay their rent.
“In the Park district of 32 in Erbil, we had a commercial property which we bought for $580,000 just two years ago. The same property is for sale for $270,000 and we haven’t been able to sell,” Karim said.
The KRG has said the freezing of its budget by the central government in Baghdad and the war against ISIS has impacted its ability to address the economic crisis.
More than 1.3 million refugees have taken shelter in the Kurdistan region, which the KRG says has added to its expenses at a time when the region is facing falling oil prices in global markets.
The KRG has asked the public for patience and said it will manage the crises and return to pre-war economic growth by expanding its oil industry.
Meanwhile demonstrations, some of which have turned violent, continue throughout the region, as protestors have grown increasing angry and intolerant of political and economic instability in the region.
