Baghdad housing bubble bursts

By Libby

The neocons are at least partially being truthful when they say the invasion of Iraq wasn't about oil. It wasn't only about oil. Long before the tanks rolled into Baghdad, the international corporations were already jockeying to position themselves to exploit a whole new "free market." Iraq was to be a capitalist's wet dream with a Burger King on every corner and a Harley Davidson in every garage. Indeed no one predicted back then that the Bush Doctrine would turn out to be as shoddy as the goods Walmart would have plied to the Iraqis.

Immediately after the U.S.-led invasion in 2003, home prices in Baghdad skyrocketed, fueled by widespread expectations that the war would end quickly and foreign corporations would pour money into Iraq's economy. Rich families who had left the country under the rule of Saddam Hussein returned, buying extravagant homes in upscale neighborhoods such as Karrada, Kadhimiyah and Mansour. Scores of new real estate companies opened across Baghdad.

"All my friends were asking me how to become a real estate agent. Some weeks, I was selling a home every day to people as investment properties," said Jawad al-Maliki, who operates a real estate company in Kadhimiyah, in western Baghdad. "They thought when all the foreign investments came Baghdad would be the new Dubai."

But as the war dragged on and insurgent groups gained power, property values began a free fall that real estate agents say has not yet hit bottom. The wealthy families who had returned to fancy homes in Baghdad left again for the stability of Jordan or Syria, in many cases leaving their houses empty. Lower- and middle-class people, desperate to afford the high cost of emigrating, rushed to sell their homes for any price.

It's easy to forget that Iraq also once boasted an elite investor class, since they're long gone, as is their real estate boom. Just like in the USA, Iraqi real estate agents are finding themselves without buyers. What's different is that they are plenty of sales, they're just being conducted underground by people who can't afford to wait for the paperwork to clear.

It goes to show the human condition is the same everywhere. There is always somebody willing to profit on someone else's misfortune.