While many things have happened in Iraq over the last 20 years many people believe that there is still significant risk of civil unrest as ownership of various properties and land is debated throughout the country. As those who follow the Iraq situation will know, the Kurdish population in the north of Iraq were the victims of horrific torture and massacre under the regime of Saddam Hussein with the vast majority of Kurds forced to flee the region. They left behind property, businesses, savings and an array of assets which had been built up over the years but were “reclaimed” by the dictatorial regime.
As the situation continues to develop post the Iraq invasion by UN forces we are starting to see many Kurds return to northern Iraq to reclaim their rightful property and assets. Even though there is an official property disputes service in the country there is great concern at the minimal speed at which they are processing literally tens of thousands of property disputes in northern Iraq and other areas of the country.
Iraq pre the UN invasions
The dictatorial regime of Saddam Hussein brought a ruthless and cold hearted government with the annihilation old factions within Iraq who did not conform to the leadership’s criteria. If we look back into the 1970s this would appear to be the start of the persecution of Kurds in northern Iraq who were deemed to have supported Iran in the Iran-Iraq war. The political uncertainty at the time allowed Saddam Hussein to grasp power with both hands and over a period of 20 years he literally ruined the economy and property market of a great country.
Corruption and fraudulent activity by officials were rumoured to be common practice and with nobody to monitor the situation these practices are said to have continued right up until the first and second UN invasions. The Kurds in the north of Iraq are a tight knit community and even today there are attempts at a breakaway state run by Kurdish officials.
Iraq post the last UN invasion
After the bitter battle between the UN led forces and Saddam Hussein’s elite army we have seen a period of great uncertainty, violence and concern. However, today we are seeing signs that life in Iraq may be starting to get back to normal with news that a number of commercial airlines have started, and more have plans, to operate their planes in and out of Iraq. While it would be foolish to suggest that the worst of the bloodshed and fighting is over, the situation in places such as Baghdad tends to grab the headlines when violence is not so widespread in other parts of the country.
Many people seem to have overlooked the return of literally thousands upon thousands of the Kurdish population to their former homes in northern Iraq. They have descended upon a number of villages, towns and cities en masse reclaiming their property and their homes. However, many of those who moved into these areas after the Kurdish population were chased out of Iraq have been on the end of serious threats of violence and the situation could get very much worse before it gets better.
It is very difficult to use any rule of thumb when looking at property rights in a country and area where war has been ongoing for many years and the unwelcome relocation of great masses of the population have been pushed through.
Who exactly owns these properties and land in question?
The Iraqi property disputes commission was set up some time ago to try and adjudicate on what is to all intents and purposes an impossible situation. Similar in some ways to the battle for Cyprus which has seen many northern Cyprus land disputes go to court over the last few years, the Iraqi property quandary is set to last some time yet. The problem which investors now have is where do they buy their property, who actually owns the property and is the property registration system in place?
There is no doubt that, despite the headline news of violence in areas such as Baghdad, international investors are now starting to see value in a country which was literally razed to the ground during the Iraq UN dispute. The economy has picked up, the stock market is also showing signs of international investor interest and there are a number of property markets opening up around the country.
Any investors moving into the Iraq property market prior to the introduction of official landownership and property registration systems are taking a big chance that they may have their investments nullified. However, if they manage to retain ownership rights over the properties they have acquired there is a potential for a very attractive long-term investment return – indeed many may see a significant short-term pick-up. But is it actually worth the risk?
Dealing in former war-torn countries has a number of risks aside from the obvious property market and economic dangers. Iraq, in many areas, is still a very volatile climate with many insure as to whether the removal of UN forces from the region will hinder or assist in the creation of a “new Iraq”. The area has attracted a number of terrorist organisations as well as fraudsters and con artists trying to make money from the confusion associated with Iraq.
While many people may deem the risk return ratio sufficient to look towards an investment in Iraq this could just be the start of their problems as finding someone reliable to act on your behalf could be tricky to say the least. The Iraq property market immediately post the UN invasion was probably as risky an investment as you could ever look to make, and there are higher than normal risks associated with many areas of the country even today. While traditionally an investor would look to visit a potential property purchase in person this has not been possible until today and even then the number of commercial flights and links with rest of the world are limited to say the least.
Aside from the moral issues of acquiring property from a war-torn country there are many practical problems which investors will encounter and none more so than northern Iraq with the rehousing of the thousands upon thousands of Kurds who were forced to flee in years gone by.