After the Central Bank’s decision, will it lead to a decrease in real estate prices?
After the Central Bank’s decision, will it lead to a decrease in real estate prices?
2025-01-18
Popular circles widely circulated the decision of the Central Bank of Iraq to limit the purchase of real estate exceeding 100 million dollars to banks, and the speculations that accompanied this decision about the real estate market and whether it would suffer from stagnation or whether it would lead to a decrease in real estate prices.
The decision can be summarized as follows: Any property whose sale price is 100 million dinars or more, the Real Estate Registration Department will require the seller and buyer to go to the bank and hand over the money there, then take a deed to present in the real estate sale transaction, in order to ensure that the buyer is held accountable by the bank to identify the source of his money.
A number of specialists and social media users have explained that this decision will lead to a “stagnation in the real estate market,” but these opinions are mostly based on an idea far from logical conclusion, as this opinion is based on the fact that buyers will refrain from buying due to the complexity that will accompany the transactions, and this is an illogical opinion, as real estate transactions are very lengthy and basically going to the bank to deposit the fees money is already present in the real estate transaction in advance and there will be no big difference when the money is delivered through the bank instead of being delivered by hand.
Another opinion was that setting the 100 million as the upper limit by the Central Bank gives a moral boost that this amount is high and must be subject to accountability, which leads to citizens clinging to their money.
The third opinion is based on the fact that some real estate owners will lower the prices of their properties to less than 100 million just so that they do not go to the banks, which is a false belief, as the seller is not really concerned with this process, but rather the buyer is the one who will be held accountable for the source of his money. The seller will never lower the price of his property, but rather the seller will be more welcoming of this decision since he will receive his money from the bank and will be keen to eliminate the possibility of fraud against him or that the money is missing or counterfeit or other fraudulent operations.
However, the opinion that differs from previous speculations, which may touch on the reality of the possibility of real estate prices declining due to this process, is the belief that the owners of corrupt money will not be able to buy real estate in large quantities later to launder their money, as they will have to go to the bank and disclose the source of their money, but mostly the owners of corrupt money do not buy real estate at prices around 100 million dinars, and basically since the discovery of the theft of the century, buying real estate with corruption money has become an open issue and many of the owners of corruption money do not resort to it, which means that the decision will not greatly affect real estate prices or lead to stagnation, except for the possibility of actually besieging corruption money and not the real estate market in general.
burathanews.com
