Iraq to increase mortgage lending to tackle housing crisis

Shafaq News/ Iraq's government has agreed to increase mortgage lending and lower interest rates in an effort to tackle the country's housing crisis, a parliamentary committee said on Monday.

"The investment and development committee met with the central bank governor and the director of the real estate bank last week to discuss ways to increase the availability of housing units for citizens at affordable prices," Committee Rapporteur Hasan al-Khafaji told Shafaq News Agency. 

"The committee agreed with the central bank governor and the director of the real estate bank to provide loans to citizens for a period of 20 years at an interest rate of 3%," he added.

"The funds allocated for housing loans to the real estate bank amount to 50 billion dinars," he said. "Which is very little." 

"Therefore, the committee agreed with the central bank governor to increase the capital of the real estate bank by 5 trillion dinars instead of 50 billion dinars," the lawmaker added. 

In early March, Prime Minister Mohammed Shia al-Sudani directed banks to adopt a "decreasing" interest rate on loans and advances starting from this year.

The Rafidain Bank announced on April 2 that it had adopted the "decreasing" interest rate on loans and advances for individuals and institutions of all kinds since the beginning of 2024.

Iraq is suffering from a severe housing crisis that has not been resolved despite building many housing complexes in Baghdad and other governorates. One of the main obstacles facing citizens is the high interest rates on loans, which reach half the amount of the loan in some cases, forcing many to refrain from buying housing units with bank loans.