Erbil, the fourth largest city of Iraq, recognized as the capital of northern Iraqi Kurdistan region, is a vital city for the country of Iraq, playing a major role in the economy of the country. It is located 80 kilometers (50 miles) east of Mosul and being the capital of Kurdistan, it is recognized as one of the biggest business hubs of Iraq. The city has glorious past and it is regarded as one of the oldest urban lands of this earth.
Being the economic capital of Iraq, Erbil plays a significant role in the economy of greater Iraq through attracting plenty of foreign and local investors to invest in the different sectors of this city. The city offers seamless transportation and great human resource. On top of these, the recent activities from government of Kurdistan region have given enough encouragement to the investors. The government has an aggressive oil exploration policy, which is recognized as better going than the central Iraqi policy or the policy drafted by Baghdad. In terms of the safety issues, the city is better than the other major cities of this country and moreover, the hydrocarbon reserves of this region are the base of its strong economy.
Kurdistan’s population includes the three provinces of Erbil, Suleimaniya, and Duhok and the population was estimated around 4.4 million in 2008, with Erbil having an estimated population of approximately 1.3 million.
Presently, the Kurdistan region of Iraq is experiencing an annoual growth of 3 percent, which is a steep and heath growth, as pointed out by the experts. The population of the region is expected to go up to 5 million by the year of 2013, which means by the end of this year. Increasing population will definitely fetch economic growth, but government has to aid its human capital with seamless infrastructure, fresh environmental growth, food security as well as education and healthcare facilities.
However, for the region, political disputes are the real concerns. The recent physical disputes with Baghdad, regarding the payment of oil companies was on the news and major part of the Kurdish economy has been harmed due to this dispute. Colliers International Erbil Real Estate Overview Q2 2013 provides a brief snapshot of the key factors impacting the Erbil Real Estate sector and the future outlook.
Residential Real Estate
As the population of the region is increasing, the need for housing projects is also growing. On this regard, many foreign companies have shown their interests to venture in this region with their development project opportunities. The Kurdish government has a very flexible legal framework for the foreign investor or companies and hence, the craze amongst the foreign comapni8es to work in this region is high as they can foresee profitability by working in this region. Government studies estimate that a total of 112,500 housing units are needed during the next 5 years. The present construction activities are positive and it seems that the Kurdish government will soon reach their target with the residential real estate projects. This estimate also accounts only for the growth of population and disregards demand generated from buyers from other parts of Iraq which may result in further pressures on supply.
Commercial Real Estate Sector
Colliers’ demand estimates suggest that current total demand levels stand at 770,000m² of commercial space. Most of this demand is currently accommodated in secondary substandard office space across the city. Analyzing the situation of present demand level, the experts have opined that the region is clearly undersupplied and hence, major projects in this region can be anticipated soon. The rental rates are expected to increase with new office building developments.
The Retail Sector
Retail and real estate sectors are connected with each and will definitely complement each other as the experts think. As the possibilities in real estate sector of Kurdistan is huge for coming day, retail sector development can also be assumed. Presently, the retail sector of Erbil seems to be undersupplied and thus the region has plenty of projects in offering for the foreign as well as for the local companies.
Apart from this tourism sector in Kurdistan is also experiencing steep growth. The city is getting ready for becoming future tourism hub for the world. At this scenario, many projects are going on in the region, including some high class sophisticated real estate projects to accommodate the tourists. So, future boom in the real estate market of Kurdistan can be surely expected in near future.