Des res in lively area
Observations on Iraq (2)
Fancy a bolt-hole in Baghdad? What about a cosy nook in Najaf? If you want a second home in Iraq, Mustapha Abbas is your man. This estate agent, a British-born son of Iraqi immigrants based in Essex, is offering homes in that war-torn country at prices ranging from £50,000 to more than £1m.
Abbas says Iraq has boomed since conflict formally finished; house prices in Baghdad are up by more than 600 per cent and those in Karbala by 1,000 per cent. Buyers so far have been property investors who hope to make a killing when the country returns to normal, expat Iraqis who want to return, and an emerging class of Iraqis who have grown rich from postwar reconstruction contracts. Abbas's firm is a beneficiary of such contracts, having been appointed to find accommodation for the US Army Corps of Engineers.
His website targets western buyers, prices houses in US dollars, and optimis-tically refers to plots of land as being "expected to sell quickly" and mansions as being "ideal for company employee occupation". The most expensive home Abbas has sold so far is a Baghdad mansion, for £1.4m, allegedly about 20 times its value before the conflict.
Rental opportunities are also apparently booming. "There's a lot of demand for leasing properties," says Abbas, "especially in the commercial areas like Mansour and Karrada, and in the Green Zone. This is from international companies which are doing business in Iraq." Among the various properties in need of a tenant is the former US embassy in Baghdad, with "excellent security features such as bulletproof glass and high blast walls".
But even experienced property investors would be well advised to hold back from adding Basra or Baghdad to their buy-to-let portfolios. Iraqi house prices, like those in Britain, are already falling - not so much because of too many homes on the market and too few buyers, but because of corruption. "It is common now in Baghdad," Abbas explains, "to have one property and find five people, who have the same deeds and registration documents, all trying to sell it to you. This makes buying property a very risky business unless you know what you are doing and have access to investigators and real-estate lawyers who can find out the truth."
Even if you do identify the true seller and are confident you are the only buyer, there are further complications. Only Iraqis can purchase freeholds; foreigners are restricted to 40-year leases. Still more problematic is that no UK bank will lend for a purchase in Iraq. And, as Abbas admits, Baghdad is "a bit hectic" and its telecommunications unreliable. He had just returned from his latest round of property viewing, but at times "it wasn't safe for me to go out by myself". Probably best to buy your second home in the Lake District after all.