In this Kurdistan Region of Iraq coverage, we put a spotlight on the Real Estate, Human Capital, ICT, and Agriculture & Water. We also talk to the leading companies on their success stories, future projects and doing business in Kurdistan.
Developed in conjunction with Ext-Joom.com
The Chairman of Empire World and Falcon Group Peshraw Majid Agha sees real-estate sector in Kurdistan less risky in comparison to others.
First, the vast majority of real-estate buyers are local investors - thus the risk of off-plan buying for speculations and later cashing in and exporting the profits is relatively low. The main difference of property market in Kurdistan is that the market is being built by the people and for the people, not for investors. A move away from the joint family system and a creation of sustainable growth.
Second, the housing market is not yet saturated but at the same time Peshraw Majid Agha warns that it is very hard to predict house prices. Third, the Kurdistan Region's stability will continue to contribute to the housing market as well as its oil and gas exports. Fourth, Rudlaw reported: "Muzafar Tahir, the director of the Erbil Census and Data Analysis office, said the population of Erbil is now 1.9 million. According to their statistics, there are slightly more males than females in the province. He said that Erbil grows by 2.9 percent on an annual basis." And "Tahir also noted that, according to censuses and data analyses, the population of Iraq and Kurdistan doubles every 36 years. This is to say that by 2048, the population will reach 12 million." This positive population growth coupled with positive inflow of Iraqi Arabs seeking prosperity and security should positively impact the real-estate sector of the Kurdistan Region of Iraq. Fifth, the majority of real-estate transactions is done in cash which is a problem but at the same time the real-estate market is not leveraged, thus the Ireland or the US sub-prime scenario that lead to the financial meltdown of 2008 is very unlikely to happen in the Kurdistan Region. On the other hand, the use of cash and unavailability of credit could adversely affect the growth rates and the development of the real-estate sector. As for the government stepping in to regulate property prices, Peshraw Majid Agha, a believer in the free market, is clear: Kurdistan is a free economy and any interference from the government in the private sector could have unintended consequences.
He argues that the economic development policies could pave way to the development of property market: "The KRG has invested heavily in their natural resources. The country is expected to produce 2 billion barrels of oil per day by 2019. Gas reserves are estimated to be between three and six trillion cubic meters. Additionally, the international oil companies have committed themselves to invest approximately US$10 billion worth of investments in the energy sector. This type of investment necessitates all kinds of economic growth, including real-estate growth."