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A piece of England booms in Iraq
By Anna Fifield in Irbil
Published: September 30 2008 02:42
As the British housing market sputters, one English village is experiencing a phenomenal housing boom, in which prices have almost doubled in the past two years and are still climbing.
This English village – complete with cul-de-sacs lined with identical two-storey houses, garden gnomes on front lawns and Range Rovers in driveways – is not in the leafy home counties that border London or in a suddenly-trendy seaside setting. It is in Irbil, capital of the northern Iraqi region of Kurdistan.
Those looking for some respite from western housing markets could do worse than investing their money in Irbil. Prices are soaring and it is completely untouched by the global credit crunch, thanks to its cash-only economy.
“There is an enormous amount of free money here being kept under people’s mattresses,” says Russell Jones, a British property investor who is one of the partners in the development of the English Village, a residential complex on the outskirts of the city.
Some people don’t want to live here, they just want a safe place to put their money,” he says. The semi-autonomous Kurdistan province is one of the safest and most stable areas in the country.
Iraqis from other regions have been flocking here, while a growing number of Kurdish expats are buying houses at home, encouraged by the number of European airlines flying to Irbil’s swish new airport.
Some families have bought several houses – one even bought 13 – as investments. Purchased from site plans two years ago, each five bedroom house cost $125,000. Now the going rate is $200,000, with some prime places fetching $230,000.
Those who actually live in their houses are revelling in the relative luxuries of the complex – such as a steady power supply and reliable sanitation system.
“It’s so new, it’s quiet and it has electricity 24 hours a day,” says Dler Abdullah, an accountant, whose family moved into the English Village two months ago, having paid $142,000 for the house early in the development. “You can’t get that in Irbil city,” he says in his new living room, decorated in pink.
“We moved from the city to a village,” adds his wife Gular, a Turkish-language teacher, laughing that their family appears to be going against the urban tide. Between them, four of their siblings also bought properties in the village.
While the village, populated by foreign business people, aid workers and well-heeled Kurds, offers British-style living, some trends do not translate, says Azzam Kasra, the project manager.
“These are English-style houses with roof tiles and open kitchens,” Mr Kasra says. “But they are not completely English – they have both eastern and western toilets and they don’t have fireplaces. Winter here is like spring in England.”
The $76m village, with 410 houses almost complete and the construction of a school and a five-storey shopping mall under way, is just one of an increasing number of huge construction projects in Irbil.
Nearby there is an Italian village in the making, complete with pastel pink, blue and yellow houses more commonly seen on the Italian Riviera, and further afield there are German and American villages.
Near the English village, the $300m Dream City development is taking shape. It will include about 1,200 houses, a mosque, schools, a shopping mall, tennis courts and a casino.
Unlike the foreign-themed villages, this development is Arab in style. “The idea is that this should be a cross between Beirut and Dubai,” says Amer Ibraheem, sales manager at Dream City, driving through the construction site, which features traditional Iraqi-style houses made of marble and granite, many sporting elaborate facades with columns. One, a villa with six bedrooms and a swimming pool, recently sold for $700,000.
But is there demand for so many new houses?
“I think so,” says Faez Hanoudi, the project manager, not entirely convincingly. “There is so much competition so the market has slowed down a little bit,” he adds.
Ordinary Kurds, who earn an average of about $1,500 a year, are struggling to keep up with the housing boom.
The cost of rented accommodation in Irbil has risen tenfold since the 2003 invasion of Iraq, and now a house in even one of the more rundown areas of Irbil commands as much as $75,000.
Many Kurds are suspicious of those who can afford such palatial $700,000 residences.
“Everyone knows that these guys are in the pay of either Mossad or the CIA or MI6,” says one Irbil resident, referring to the Israeli, US and British spy agencies.
The Financial Times Limited 2008