An Introduction to Baghdad's Booming Real Estate Market
Baghdad is an ancient city, that's seen the rise and fall of many empires dating back to the Sumerian "cradle of civilization" in ancient Mesopotamia. Long before January 1991, Baghdadis have been subject to some of the worst sieges and atrocities that humans ever had to face. These included the Mongols' siege and massacre of the city in 1258, during the late Abbasid Caliphate. However, life went on, and while Baghdad suffered immensely in recent memory after the first and second Gulf Wars as well as the insurgency against American occupation, in recent years things have been looking up for the Iraqi capital.
Let's start with one of the reasons why we're bullish on Baghdad real estate: the city's sheer size and a demographic youth bulge which, together with capital from the Gulf states, is fueling a massive wave of construction. Baghdad has a population of approximately 7 million people and a landmass comparable to that of Los Angeles County in California. This means that Baghdad is home to 22% of the Iraqi population.
Ever since the end of the active combat phases in the mid-2010s and in the start of the 2020s, construction efforts have been ongoing. And now we're starting to see some real results. Nonetheless, given the population increase and high urban density, contracts to construct residential buildings and their utilities will always be forthcoming. It also helps that the majority of Iraqis (almost 60%) are under the age of 25, so that demand will remain strong for decades, not just a boomlet that drops off after a few years.
Video clip above: Courtesy of Latitude Accountants in Sydney, Australia
Iraq’s $17B Development Road Plans to Connect Asia and Europe | WSJ Breaking Ground
March 13, 2025
The Iraq Development Road Asia to Europe will stretch for 740 miles of highway and rail lines from a newly constructed Grand Faw seaport near Basra on the Persian Gulf to the village (soon to be a town) of Ovaköy on the Turkish border.
Iraq New Development Road intermodal project route now under construction
Source: CivilsDaily.com
If you doubt this, see the Wall Street Journal reporting above about the billions being invested in highway and railway infrastructure from the Gulf through the heart of Iraq. Or check out the video clip at the top of this post from an accounting firm in Australia, with an anecdote about a contact of theirs selling a 900 square meter house in Baghdad and reinvesting the proceeds in Sydney property. But surely this is only an anecdote, yes? Aren't the vast majority of Iraqis still living in poverty due to four lost decades of wars and insurgency? Well here are some numbers from Baghdadi realtors confirming the massive shortage of quality modern housing stock, let alone luxury apartments and houses for Baghdad's new elite:
Several factors contribute to Iraq’s housing crisis, including a population boom, inflation, and rising construction costs. Government statistics reveal that Baghdad alone faces a housing deficit of 31%, highlighting the scale of unmet demand across major cities.
Mutaz Al-Hasani, owner of Al-Sabah Real Estate Agency, illustrated the disparities in Baghdad’s property market. “In affluent districts like Al-Jadriya, Mansour, Yarmouk, Palestine Street, and Al-Saydiya, prices range from $3,000 to $7,000 per square meter,” Al-Hasani told Shafaq News.
“Meanwhile, lower-income neighborhoods, such as Sadr City and Al-Zaafaraniya, offer more affordable rates of 1 to 2 million Iraqi dinars ($680 to $1,360) per square meter.”
Source--Shafaq.com
January 20, 2025
The Iraqi real estate market is valued at over $1.1 billion, and the market is forecasted to grow at an annual rate of 4.43% between 2024 and 2028, and is projected to reach a volume of $1.32 billion at the same timeframe, investment capital for those who went in at the beginning of the 2020s has already yielded profits and return of investments in 2025, however, not everything is going so well.
Sectarian tensions, while not as vicious as they were during the 2010s and 2000s, are still there. Internal conflicts between the Iraqi federal government and Shia militias as well as a still dangerous underground of Daesh terrorists do erupt from time to time. The bureaucracy of the Iraqi government remains notorious, and some areas have not been repaired in the over 22 years since the Americans invaded in 2003. The banking sector in Iraq is also not doing well, the Iraqi economy in day-to-day affairs and even large deals is still operated on a cash and carry basis. Bank fees are high and international banking transfers are neither quick nor efficient due to having to navigate around sanctions issued by the US Treasury Department on Iranian groups or fronts for them in Iraq.
There are 130 residential complexes that are being built by real estate firms, with many more planned. After decades of practically no new housing stock getting built, this trend is a positive one – after the de-escalation and cessation of every conflict, rebuilding must occur. And when you rebuild–you get contracts, which means you get hard currency, whether dollars or Emirati dinars. Unfortunately, the recent construction boom still has a very long way to go in addressing the housing crisis in Iraq, where there's a deficit of 3 million units for housing. The private sector dominates the real estate market in most Iraqi cities, with over 85% of the market in private hands.
Photo credit above: Aerial view of Baghdad in 2010, when the scars from years of insurgent and sectarian militia mortar fire and car bombing attacks were still raw
Uploaded to iStock by andersen_oystein Oct 2010 iStock photo ID: 183263991
Now – we are going to discuss the top areas for property investments in Baghdad:
Green Zone/Embassy Row: The Green Zone is one of the most secure areas in Baghdad, this area concentrates most foreign embassies, federal government buildings, and is the headquarters for numerous international aid and regional organizations. It's tight security and diplomatic presence makes it a prime location for foreign investors, so it's rather comfortable. However, this also means it’s much more expensive than other districts, parts of the Green Zone have been redeveloped for commercial and residential use, and its central location adds to its attraction.
Tigris River Front: This area alongside the Tigris river is in the vicinity of the former palaces of Saddam Hussein, they are rather scenic and have great potential for luxury developments. As some green areas have already seen new developments, it is likely that high-end residential and commercial projects will be ongoing here in the coming years, and construction is underway at multiple sites.
Al-Mansour: One of the best developed and richest districts of Baghdad, this area is named after the Abbasid Caliph Abu Ja'far al-Mansur. It features upscale residential properties, shopping centers, and restaurants. Its well-established infrastructure and amenities make it a desirable location for foreign investors, and a comfortable place to live in.
Al-Karrada: A more “lively” district, it is a commercial and residential hub known for its markets and malls. It's also quite close to the Tigris River and thus is a hub for business and leisure, it is an upper-class district divided by the Tigris River into Karrada Maryam (west) and Eastern Karrada. Known for its waterfront properties, diverse population, and vibrant commercial activities, it houses many diplomats, politicians, and businessmen.
Photo credit above: A map of Baghdad with the International Airport and major highways
Uploaded to iStock by Rainer Lesniewski May 2019 iStock photo ID: 1152241832
Al-Jadriya: Sharing the riverine peninsula with Karrada, Al-Jadriya is known for its high-quality residential areas and for having the University of Baghdad within its area with their attached faculties. It's also along the Tigris river, so it has many green spaces. This district is considered a cultural and educational center.
Al-Harthiya: A more quiet and residential district of Baghdad, known to be for the rich – it has many spacious villas and quiet streets, and is usually inhabited by wealthy locals and expats, and proximity to the Green Zone adds to its investment appeal.
Al-Dora: This was one of the most violent districts in Baghdad during the 2000s and 2010s, now it barely holds any semblance to what it was during the insurgency and sectarian bloodshed. Today it's a mixed-use district with residential, commercial, and industrial zones. Al-Dora's strategic location along major highways makes it a potential hub for logistics and manufacturing investments, located in southern Baghdad. There have been significant improvements in security and infrastructure here, so it's now emerging as a viable option for investors looking for affordable properties with appreciation.
Al-Sadr City: One of the low-income and common districts of Baghdad, there has been recent development projects aiming at improving living conditions, although there is the potential for long-term growth, this territory is inhabited by Shias. Many of whom remain antagonistic toward the federal government, so keeping a close eye on the security situation here is necessary.
Al-Adhamiya: Known mostly for being one of the very old districts in Baghdad, it is located on the eastern bank of the Tigris River, which contains historical and cultural sites of significance. Niche gut rehab property investments could be viable here, as there are efforts to preserve and develop the architectural heritage of the district.
Al-Rusafa: Located on the eastern bank of the Tigris River, Al-Rusafa is one of Baghdad's oldest districts, known for its historical sites (alongside Al-Adhamiya) and bustling markets. Recent redevelopment efforts have enhanced its infrastructure, making it appealing for investors interested in cultural and commercial projects.
Al-Zawraa: This area is notable for its large park and recreational facilities, making it a family-friendly location. It has green spaces and potential for leisure activities like boating, which attract investors interested in tourism and hospitality.
Al-Saydiya: Located in southwestern Baghdad, Al-Saydiya is a predominantly middle-class neighborhood known for its diverse population and commercial streets. It offers a mix of residential and commercial properties, making it a potential area for investment, but there is really not anything here that stands out for property investors. In terms of price appreciation, perhaps it's lower floor with a lower ceiling here .
Bismayah New City: Situated about 10 kilometers southeast of Baghdad, Bismayah is one of the largest new city development projects, it aims to accommodate 600,000 residents in 100,000 residential units. The planning and higher rise construction is modern, but of course it is not yet finished. This area is expected to come into its own by the end of this decade.
Al-Kadhimiya: Home to the Al-Kazimiyya Mosque, this district attracts numerous visitors and pilgrims from the Shia. The area has seen infrastructure improvements and offers opportunities in hospitality and retail sectors
Al-Amiriya: A residential neighborhood in western Baghdad, Al-Amiriya has experienced infrastructure development and offers opportunities in housing and community services. But again, nothing really sets it apart from other areas further away from the center.
However, property costs in Baghdad vary widely. In some districts, the price of square meter costs over $15,000, Baghdad particularly the near-Green Zone areas are home to some of the most expensive properties in the world. In other districts the cost can be $5,000 per square meter, or as low as $2,500. The regulatory environment is rather hostile to major and even smaller developers, but the Iraqi government is working on addressing these concerns.
But the fact remains – there is a severe housing deficit, and someone has to fill it in, or the shantytowns will remain, which is not good for anyone in Iraq.