Discussion in 'New and Emerging Property Markets' started by robh, Jun 21, 2007.
Anyone looked at buying property in either of these countries for real high risk investing?
I have heard of people considering it
Obviously it is very high risk, like all things, if managed carefully there are possibility. I think the key is too know what you are getting into and when you can get out. Very unstable place.
as the quote by Baron Rothschild goes: The best time to invest is when there is blood on the streets.
I totally agree. Best time to invest is when there is panic and kayos. A few months ago I met an Iraq ex pat and he said that he purchased his families houses in bag bad just before the Iraq war. Prices disintegrated to 4000US, he says now it is worth 400,000US.
Not sure how credible this is though, as I just met the bloke on a one off occasion. He also said that he will be investing in Syria as well.
Way too risky for me, but if i new the language and had connections over there I would research more as it well maybe very lucrative.
He also stated that you cannot purchase over net, you have to actually visit the country.
This article disproves the theory that there is good money to be made from Iraqi property at the moment:
One of the things that visitors to Baghdad notice immediately is the number of "for sale" signs which now cover the capital's buildings.
Many of the four million Iraqi refugees who fled to Syria and Jordan in the past three years have put their houses on the market, hoping to generate some cash to help them while abroad.
Al Jazeera spoke to a Baghdad estate agent, who would identify himself only as Abu Ali for security reasons.
He said: "Ninety-nine per cent of those who want to sell their houses in Baghdad are afraid to live here. Some of them are professionals who had their colleagues killed and are afraid to meet the same fate.
"Others are afraid of being forcibly removed from their homes by the militias on ethnic and sectarian grounds, and many more reasons related to security."
Abu Ali says that despite the saturation of the real estate market, the number of buyers seems to be dwindling.
"The supply is much, much higher than demand," he says. "The value of Baghdad real estate has dropped nearly 50 per cent compared to 2003 and 2004."
1990s purchasing power
The trend of Iraqis selling property and emigrating abroad first began in the mid-1990s and began to increase exponentially over the past three years.
After the UN-sponsored sanctions on Iraq in the wake of the 1990 invasion of Kuwait, the Iraqi currency lost much of its purchasing power depreciating up to 3,000 per cent.
Iraqi professionals who depended on high government salaries before the 1990s found themselves failing to support a lifestyle they had been accustomed to.
However, shortly after the fall of Saddam Hussein's government in April 2003, thousands of Iraqi expatriates, exiles, and those who had left during the 1990s returned expecting extremely profitable deals and business in what has become known as "rebuilding Iraq".
They were accompanied by many private companies hoping to secure post-war contracts.
Abu Ali told Al Jazeera the real estate market witnessed a "golden renaissance" until the end of 2004.
It was in that year that violence started to claim dozens every day. Basic services and living conditions also deteriorated with some neighbourhoods seeing persistent water shortages and very little electric power.
Those homes lucky enough to be powered by power generators often broke down as fuel shortages gripped the city.
Abu Ali said: "Nowadays, everybody is willing to leave; even many businessmen have shut down their businesses in Iraq and moved to other countries. And here is the problem - potential buyers have become a scarcity in Iraq."
Salah Muhamad Amin, a retired army general from Baghdad said: "To be fair to the government, security has slightly improved since the implementation of the surge; however, it is not only about security.
"I am preparing myself to leave Baghdad, because I am not able to cope with day-to-day requirements. I am 70-years old and my wife is 62. We do not have enough electricity and we cannot tolerate the hot weather any more."
He said his family has to daily manoeuvre through army checkpoints and barricades until they reach petrol stations where the queues can run for several blocks - all in the hope of securing fuel for the generators.
He said: "We are fed up with having to risk our lives every time we need to go and get our pensions, so I will sell my house and leave to a country where I can live normally."
But those few Iraqis who were lucky enough to sell their homes and relocate to Arab capitals discovered that Jordan, Syria and Egypt were experiencing a real estate boom directly proportional to the number of refugees leaving Iraq.
The few thousands of dollars they made in selling their Baghdad homes have proven insufficient to provide for their families in Amman, Damascus and Cairo.
A 2006 report by the Amman Chamber of Commerce indicated that non-Jordanians bought in Jordan in 2005 properties worth 147.3m Jordanian dinars ($ 207.4m), which is a 102.8 per cent increase compared to 2004.
The report said that Iraqis comprised 67.8 per cent of non-Jordanian buyers, a 10 per cent increase over the previous year.
Wissam al-Tahir, an Iraqi refugee in Jordan, said: "I believe Iraqis are cursed. I sold my house in Baghdad, but cannot get anything in Jordan ... the prices have gone crazy. We are not allowed to work here, we cannot travel because all countries refuse to grant us visas, as if we are a sort of dirt or something.
"The only thing we can do is to spend our money until we are bankrupt and go beg humanitarian agencies for help."
Thank you for the information.
Property investment, at its basic level, all comes down to supply and demand. From the article it would appear (quite logically) that there is very high supply and very low demand at the moment.
Maybe for the priviledged view in the Green Zone, I can imagine that property there could have goe through the roof. After all, I can imagine that every Iraqi is trying to get to live there. So perhaps this is where the expat you met got his $400,000 home.
If I was a gambling man and incredibly patient though, I think that I would start buying up parcels of prime location land if I could find any.
With land, you don't have to worry about it getting blown up and if, one day in the far off future, they ever do sort out their problems, there is going to be a massive shortage of prime property and so I can see that there would be a building boom to follow.
I am very sorry to said it is not for invest.
I am see every thing clear ....
realy 400,000us for green erea.........
even no regesting trust.........iraq will not build again
Abu Ali was right and direct with aljazeera.....
thank for the detail
I would think there is still further room for price falls.
Once the US pulls out, taking a great degree of what stability there is with them, there is a high liklihood the country will fall into civil war.
I wouldn't consider any structure, but land might be a nice present to my kids for 20-30 years down the road.
that is what I know.......
I repeat : there is no such thing as investing in these two countries .......... Because there is no state or real authority, not even the law .... Imagine that there is not even a cadastre system accredited ..... Both countries were scorched land until .....
In a corrupt and crazy country people are more likely to invest in homes to safeguard their money from inflation, etc. That`s if they have got money.
Right now there is a demand by shia muslims for properties in Sadr City. Risky business I have to say Estate agents are gunned down in the daylight sometimes. I have got few local contacts in Iraq, so business can be done but with extra care.
Don't think he meant real blood though.
Maybe Channel 4 could do a new series 'You're Home With The Sunni's'?
Some people need a bit of a reality check. I'd like to see them actually visit Bagdad with a suitcase of money. It's all BS.
This is an old topic, but I thought I would update it. I visited Iraq 6 months ago to look at developments shown by Foreign Real Estate Consultants. Frc-Iraq in google brings you to there website if anyone is interested. I toured a couple properties in Baghdad and some in the Northern Kurdish area and had a very memorable trip taking in the culture. People I talked to talked about the night and day difference of the situation from when I went compared to even a year earlier. Rule of Law, infrastructure, and investment are all returning, slowly in some areas and rapidly in others. Don't get me wrong there is still risk, and that risk varies depending upon the area but good opportunities are out there.
lol pretty crazy risk.
I'm not sure he was being literal.