The Kurdish government provides free land lots for housing projects in the hope of resolving the housing shortage in Iraqi Kurdistan.
In a bid to lure foreign investment, as a concession, the Kurdistan Regional Government (KRG) has enacted a legislation permitting the sale of land to foreign companies operating there. Major corporations from diverse countries have purchased real estate properties in Kurdistan, including the U.S., Turkey, Iran, Canada, Saudi, Kuwaiti, Dubai, the U.K., France and China.
One of the latest trends in the property market is buying off-the-plan properties from larger developments. They’re very much in demand and often popular projects sell out almost immediately. Even before a popular property development is completed, buyers may have been able to cash in on up to a 40% increase in the property’s value, according to the experts.
High property prices may well lead to a mortgage market opening up in the region, which would also be a catalyst for the multinational banking sector’s presence in Iraqi Kurdistan. However, an overpriced market may mean that banks are reluctant to lend a great deal if, and when, they decide the time is right to enter the Kurdish market. Lack of financing and a shortage of new capital could eventually catch up with the market and discourage buyers.
According to Iraqi weekly magazine Niqash, “the rental market has risen outrageously and rental yield (that is, the amount of rent the property earns over a year expressed as a percentage of the purchase price) in the populous city of Sulaymaniyah, for example, appears to be go between 6% and 17%.
“To compare, average rental yields in Germany sit at around 4%, in the USA around 5% and in Egypt they are around 7%. This rise in rental yield in Iraqi Kurdistan has made the commercial property market particularly attractive and investors have been rushing to cash in on what the market has to offer.”
One of the largest builders of housing in Iraqi Kurdistan is KAYAR – headed by Chairman of the Board Ali Nerway – which provides architectural, engineering and construction and real estate development services. Among its major projects is Kayar City, near Duhok, a modernistic development which will include apartment buildings and private homes as well as hospitals and other services.
Another top builder is Ser-Hat
Construction – headed by Chairman Hamit Özalp – which began as a road builder in 1983 and has grown to take on major projects in Kurdistan and other countries. The company has built housing, factories, hospitals and cultural centers, and has installed infrastructure such as water supply, sewer lines, and natural gas pipelines.