In order to find a solution to this crisis, the ministry asked the government to advance $300 million to the housing fund in order to cover the 2013 credit plan.
Regarding the distribution of residential units, the ministry says that priority will be given to widows, orphans and the disabled. Moreover, they will benefit from a disbursement period that has doubled from 25 to 50 years, until the ministry comes up with a solution to the budget problem or obtains the necessary advance from the government.
The Iraqi parliamentary Finance Committee said that it has asked the Finance Ministry to allocate the fund sums from the 2012 budget and provide it with an advance in order to guarantee that its plans are implemented.
Committee member Amine Hadi Abbas said that “the committee has asked the Finance Ministry to disburse the fund’s appropriations from 2012, and advance additional sums to help it continue to function normally.”
The fund is said to have granted $340 million in loans for those wishing to build residential units in 2012. Yet sources within the Iraqi Investment Authority said that the government credit plan hinders efforts to bring real-estate investment to the country. These sources said that the housing loans limit the demand for residential units built by foreign investors, units that are sold at market value and paid for in installments.
So far, the Iraqi government has failed in marketing units in the Besmaya [Bismaya] housing project in Baghdad, constructed by the South Korean company Hanwha.
A clear slump has been noted in the Baghdad real-estate market since the start of the political crisis that has erupted in the country. This comes against the backdrop of protests that erupted in Sunni areas against the Maliki government.
The demand for residential units in Baghdad grew significantly after 2003, due to increases in income and the opening of the markets. Real-estate agents, however, say that the demand for homes in Baghdad has sharply declined over the past two months due to the repercussions of protests in Anbar, which is one of the most important Sunni strongholds in Iraq.
Omar al-Shaher is a contributor to Al-Monitor’s Iraq Pulse. His writing has appeared in a wide range of publications including France’s LeMonde, the Iraqi Alesbuyia magazine, Egypt’s Al-Ahaly and the Elaph website.
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