In a significant move to tackle Iraq’s housing crisis, the government has agreed to boost mortgage lending and lower interest rates, announced a parliamentary committee on Monday.
According to Committee Rapporteur Hasan al-Khafaji, discussions were held last week between the investment and development committee, the central bank governor, and the director of the real estate bank to find solutions to enhance housing availability for citizens at affordable rates.
“The committee, in collaboration with the central bank governor and the director of the real estate bank, has agreed to offer loans to citizens for a duration of 20 years with an interest rate set at 3%,” stated al-Khafaji.
He further disclosed that the allocated funds for housing loans by the real estate bank amount to 50 billion dinars, which he deemed insufficient. Consequently, an agreement was reached to escalate the capital of the real estate bank by 5 trillion dinars instead of the initial 50 billion dinars.
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Earlier directives from Prime Minister Mohammed Shia al-Sudani emphasized the adoption of a “decreasing” interest rate on loans and advances by banks starting this year.
The Rafidain Bank confirmed the implementation of this directive on April 2, applying the decreasing interest rate on loans and advances for individuals and institutions since the beginning of 2024.
Iraq continues to grapple with a severe housing crisis despite efforts to construct housing complexes in Baghdad and other regions.
High interest rates on loans have been a major hurdle for citizens, with rates sometimes reaching half the loan amount, discouraging many from pursuing housing purchases through bank loans.
The government’s recent initiatives signal a concerted effort to alleviate the housing burden on Iraqi citizens and promote homeownership.