House prices hitting home in Baghdad

IRAQ: The pace of reconstruction is not going fast enough for Iraq's housing industry, where house prices are booming between…

IRAQ: The pace of reconstruction is not going fast enough for Iraq's housing industry, where house prices are booming between the bomb blasts.The price of real estate has more than doubled in Baghdad since the end of the war as Iraqis decide that with the threat of imminent airstrikes passed, it is time to build the family home.

Tens of thousands of new homes have been planned by eager Iraqis, but even that is not enough to satisfy the demand for housing blocks or leafy suburbia.

Before the war, a house in the middle-class Palestine Street district near the centre of Baghdad cost €28,700. Now house prices are around €72,000.

"It's a wonderful time to build a house," said Majid al-Settah, director of Baghdad's al-Jazeera real-estate company.

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"For years people have been scared to build anything new for fear that Saddam or the Americans would destroy their property. But now that fear is gone."

House prices have been further stimulated by the lifting of a law imposed by Saddam that barred Iraqis from building property in Baghdad unless they or their parents lived in the capital before 1957. Millions of exiled Iraqis are also returning to the country looking for a home.

Prices have now got so high in Baghdad relative to the average salaries of a few hundred pounds a month that few Iraqis can actually afford a mortgage but must rent instead. The Coalition Provisional Authority has funded a number of emergency housing projects to alleviate the shortage.

"There simply aren't enough bricks to go around at the moment. But that doesn't stop people planning and dreaming," said Majid Mahmud, of al-Dulaimy construction company.

Demand has been particularly acute for the large gloomy complexes used as family homes, which bespoke the insecurity fostered by the former regime and the practicalities of 20 years of war. But in a sign of increased optimism, Western-style architecture is also becoming popular. "I've seen some very strange plans with too many windows . . . but I keep my opinions to myself," said Mr Mahmud.

One US soldier was killed and two wounded yesterday when their convoy was hit by an explosion near Baquba, north of Baghdad.