June 13th, 2009
The Iraqi government has approved a bill to amend the investment law to allow foreign investors to buy state-owned, public and private properties in what is seen as a move that could create a new demand for real estate in the once war-torn country.
An official spokesman for the government said that the bill is aimed at creating a better environment for investments in the country and will put foreign investors in the same position as Iraqi investors.
‘The bill will amend investment law number 13 of 2006. Foreign investors will be allowed to own state, public, and private properties, according to a special payment system for the purpose of housing projects,’ said Ali al-Dabbagh of the Cabinet Office.
The bill will also offer foreign investors the freedom to deal in the Baghdad Stock Market and to join partnerships in private and public companies.
Development is booming in Iraq. It is estimated that the country needs millions of new homes and the Iraq’s investment commission hopes to attract $500 billion of foreign capital by 2015.
The news comes at the same time as a new survey indicates that Iraq is increasingly regarded as a future property hotspot. On-line property group Simplyzigzag asked real estate investors if they were willing to invest in more volatile locations.
Almost half of those questioned, some 44.6% said they would put Iraq as the top former volatile country to invest in followed by 17.9% for Croatia and 16.1% for Costa Rica.
‘Iraq, once a crazy idea, has been become an ideal place for investment. Its economy though plagued by war is dominated by oil, agriculture and tourism,’ said Raya Mamarbachi, Simplyzigzag director.
‘Despite the volatility in the market huge returns can still be made. Kurdistan’s capital, Erbil, has seen huge rises in foreign direct investment. Investors are swopping allegiances with more traditional places for high risk areas,’ Mamarbachi added.
But it remains to be seen whether foreign property investors will abandon traditional markets for the riskier options of Iraq and Costa Rica.
Propertywire.com
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Contact Poster/Blogger for real estate deals/swiping properties in Iraq
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ST. PAUL, Minn., May 13, 2010
Two Young Americans With an a Partner in Iraq Look to Make a Name for Themselves in the Iraqi Marketplace
Ishraf Ahmad and Derrick Turner talk business in their living room/home office. (AP Photo)
. A home for sale is seen in the Jadriyah neighborhood in Baghdad, Iraq. (AP Photo)
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.(AP) In a high-rise apartment building in Minnesota's capital city, two 23-year-old men roll out of bed every morning, convene on a living room futon and fire up their laptops to check on a couple dozen properties they've listed for sale in Iraq.
Half a world away, their colleague, also 23, is already on the move in Baghdad: Showing houses and appraising properties as he navigates around concrete blast walls and police checkpoints.
The three men are part of a unique real estate venture that connects expatriate Iraqi property owners in the U.S. with buyers in Iraq. Though still a fledging business, they've already sold several properties, taking advantage of the war-torn country's booming real estate market.
"What we are aiming to do is create a name for our business," said Ali al-Robaie, the Iraqi who teamed up with Americans Ishraf Ahmad and Derrick Turner to establish Forex Realty Consultants. "We know Iraq has a bright future, so we have a really big optimism in the Iraqi market."
Ahmad and Turner, who've yet to visit Iraq themselves, were undergrads at Minnesota's Carleton College when they hatched a plan to get a piece of Iraq's real estate market. They recruited equal partner al-Robaie through a Craigslist ad, and less than two years later, they've sold five residential and business properties and done appraisals and other services for another 15 or so clients.
Currently, Forex has about 35 listings ranging from a mansion with views of the Tigris River to a twin home near the University of Baghdad touted on the company's website as "great for two brothers."
Seven years after the U.S. invasion of Iraq and less than six months from the promised pullout of U.S. combat operations, the three young entrepreneurs are treading where many, much larger U.S. companies are still reluctant to venture.
"We need to get more Americans out there taking advantage of the investment opportunities," said Yasmin Motamedi, executive director of Middle East initiatives for the U.S. Chamber of Commerce.
Real estate prices, in particular, have risen considerably in recent years in Iraq, due to a lack of housing in Baghdad, improved security and the expected influx of cash from increased oil production, said Gavin Jones, co-founder of Upper Quartile, an Edinburgh, Scotland-based advisory firm that has worked extensively in Iraq.
Yet, investing in Iraq is still considered risky business thanks to red tape and rampant corruption. Transparency International ranked Iraq 176 out of 180 countries in its latest index of corruption, with only Sudan, Afghanistan, Myanmar and Somalia scoring worse.
"If I were looking at buying stuff there, I'd be very, very careful. ... A lot of the laws and systems in Iraq are still based on the Saddam-era regulations," Jones said.
For the three partners, Forex is less about politics and more about opportunity. "Coming out of college and looking at this economy, both of us knew that we wanted to do something a little different than just a nine to five job," Ahmad said.
In May 2008, Turner was studying in Europe when he read an article about skyrocketing property values in Iraq. When he returned home, he and Ahmad spent many late nights discussing how they might capitalize on it.
There was one problem. Neither knew a whole lot about real estate.
"We both read 'Real Estate for Dummies,"' Ahmad said. They researched, drew up a business plan and recruited al-Robaie, an Iraqi native who was living in Sweden at the time.
While Ahmad and Turner recruit expatriate customers, operate the business website and manage paperwork, it's al-Robaie who's on the ground. On a recent spin through the Jadriyah neighborhood, he showed off a listing - a mansion he said was once owned by an ambassador. Thick, vine-covered walls surround the sprawling, 46,285-square-foot parcel of land.
The main entrance is guarded by a bulletproof gate and a pop-up barrier to stop cars from getting too close. For an asking price of $8.6 million, the next resident can enjoy a swimming pool, a renovated American-style kitchen, and a view of the Green Zone across the Tigris River.
"This is a pretty safe area because a lot of state people live here," al-Robaie said.
So far, sellers have found Forex mainly through Google searches - though they hope to soon begin physical advertising in heavily Arab parts of Michigan and California. Ahmad and Turner, who are based in St. Paul, also talk of opening a U.S. office, possibly in Michigan.
One customer - Basil Fayadh - said he found Forex by searching "Iraqi real estate" on Google, after his expatriate parents decided last summer to sell a house they still owned in Baghdad more than 40 years after leaving Iraq.
As a child, Fayadh remembered his parents occasionally mentioning the place. But he thought little of it until a visit with his parents in Cleveland, when his father dug out a faded copy of the deed.
"I said, if this thing is still standing, we ought to sell it," said Fayadh, 35, a currency trader in New York City. He said Forex was the only firm he could find offering a link between U.S. sellers and Iraqi buyers.
To Fayadh's shock, al-Robaie quickly found the house, which had been occupied the entire time by the same man.
For weeks, Fayadh said, he spoke on the phone every day to Ahmad, as they navigated what Turner has dubbed the "Iraq-cracy" - the cumbersome bureaucracy that permeates daily life in the country. Fayadh finally sold it to the long-time occupant for more than $400,000; he and his father traveled to Amman, Jordan, where they met al-Robaie and the buyer to finalize the deal.
"These guys were pros," Fayadh said. "You know, I knew they were young and there were a few times when their inexperience showed, but they really stuck with it."
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U.S. property hotspot revealed by $17 bln of deals
-- The authors are Reuters Breakingviews columnists. The opinions expressed are their own --
By Agnes T. Crane and Robert Cyran
NEW YORK, Feb 28 (Reuters Breakingviews) - Giant wagers in U.S. commercial real estate, exemplified by the $17 billion combined size of deals from Blackstone Group and Ventas, both in the news on Monday, might appear risky. After all real estate investment trusts, one gauge of the sector, are trading at premium valuations. But a recovering economy and tight supply make it a sound bet.
Equity REITs are trading at a valuation more than 25 percent higher than the S&P 500 based on a specialized earnings multiple, against the 2 percent premium seen on average since 2005, according to KBW. That sounds buoyant already. But the financial crisis beat the stuffing out of the market for the underlying office buildings, malls and healthcare facilities, and it has been slow to recover.
Investors like General Electric are still smarting from their push into the sector the last time. It's no wonder many have stuck to the sidelines so far this time around. Valuations for individual properties are still down more than 40 percent since the peak, with prices only clawing back 5.5 percent from the low, according to Moody's. The S&P 500, meanwhile, is already up 95 percent from its 2009 trough.
Private equity firm Blackstone isn't holding back, though. Its $9.4 billion deal for U.S. assets of Australia's Centro Properties is one of the largest property deals since the crisis. The thinking is fairly simple: a sharp recent drop-off in new construction combined with an economy expected to expand by around 3 percent this year and next should bring higher occupancy rates and improving cash flow. Vacancy rates are still high, but a slowly recovering job market should help bring them down. Given the low base, even a modest recovery could net investors respectable gains.
Meanwhile Ventas' $7.4 billion acquisition of Nationwide Health Properties, whose activities focus on nursing homes and other retirement developments, is a case of one REIT buying another for shares -- mitigating concern that both stocks might be highly valued. Here again, the key rationale involves higher demand for real estate in the future -- from an aging population, not just from a strengthening economy.
In an echo of the pre-crisis period, the driver of both deals is the search for yield. Investors have latched onto REITs for their solid cash flows, and Blackstone and other acquirers (including REITs themselves, like Ventas) are looking to squeeze more out of buildings they buy. With bonds, many stocks, commodities and other assets looking at least fully priced, commercial buildings stand out as having room to run.
CONTEXT NEWS
--Private equity firm Blackstone Group plans to buy nearly 600 U.S. shopping malls and other properties from Australia's Centro Properties for $9.4 billion, according to news reports.
-- Ventas, a U.S. real estate investment trust, said on Feb. 28 that it would purchase Nationwide Health Properties for $7.4 billion, creating the largest healthcare REIT. The combined company will have 1,300 assets in 47 states, the District of Columbia and two Canadian provinces.
-- Ventas press release: http://link.reuters.com/rak38r
((agnes.crane@thomsonreuters.com; robert.cyran@thomsonreuters.com))
(Editing by Richard Beales and Martin Langfield)
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CREA members approve MLS deal with Competition Bureau
Sunday, 24 October 2010 17:17
National
The winds of change were blowing outside a St. John’s hotel Sunday afternoon, as representatives of the country’s 101 real estate boards voted 97 per cent in favour of a deal that some warned could mean the end of the Canadian Real Estate Association.
At the very least, it will change the current face of the Multiple Listing Service (MLS).
The controversy began earlier this year when Competition Bureau Commissioner Melanie Aitkin announced she was investigating complaints of anticompetitive behaviour, including concerns CREA kept its members from offering services that would lower costs for consumers.
Some of the biggest complaints involved the popular MLS system, with complaints agents were charging full commission just to post a listing. If clients didn’t use an agent, they couldn’t list their property on MLS.
That sparked intense negotiations between CREA and the Competition Bureau in the months leading up to Sunday’s vote. And if CREA members didn’t vote in favour of the deal, there were looming threats of a court battle next spring with the federal government.
CREA president Georges Pahud said he welcomed the decision to ratify the agreement and end the Competition Bureau battle.
“We are pleased that after careful consideration and reflection, real estate boards and (local real estate) associations from across Canada have endorsed the agreement.”
“The commissioner and CREA have agreed that its rules as well as those of members should not deny or discriminate against realtors wishing to offer mere posting services. CREA does not believe that such rules exist today, but if they do, they must be repealed or boards will lose their license to operate under the MLS trademarks” Pahud said in a statement.
As rumours of the deal filtered out in advance of the vote, some entrepreneurial realtors saw opportunity. Details emerged late last week that the largest of those private sale companies, Moncton, N.B.-based PropertyGuys.com, had signed a deal with Harvey Real Estate Co. Ltd, a tiny brokerage in Hamilton, Ont.
The arrangement would see Harvey listing PropertyGuys.com client’s properties in Ontario on the MLS site for a fee, if the client wishes. The MLS profile would then link to a client’s customized PropertyGuys.com profile.
The broker has been posting PropertyGuys.com listings for a week now and there is still a backlog, according to a report in the local New Brunswick Business Journal. It added PropertyGuys.com expects the overall opening of the marketplace to boost their listings by 30 to 40 per cent in the next year alone.
How will this vote affect you? We want to hear from you, tell us how you feel using our comments feature, below.
Look out for our upcoming profile on Wayne Einhorn of EDI who will be speaking to realtors with regards to differentiation rather than competing on commissions.
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Competition Bureau unhappy with MLS changes
The Canadian Press
Date: Tuesday Mar. 23, 2010 6:05 PM ET
TORONTO — Yvonne Kraft feels trapped between listing without using the most widely viewed service in Canada or paying commission on a house she's confident will sell as soon as the sign goes up.
"There's nothing in between, it would be nice to have a choice," said the interior designer from Hamilton who has privately sold houses twice.
Kraft says when she sold her house five years ago, she was one of only a handful of private sellers, but a growth of do-it-yourself websites has made private listing more mainstream.
"The do-it-yourself real estate industry is growing in spite of the real estate board not wanting to budge on their regulations, it's going to grow on its own and if they don't want to join the party then they're going to be left out," she said.
The Canadian Real Estate Association, which represents about 98,000 realtors, loosened its rules Monday to lift restrictions on realtors' minimum service requirements and allow consumers to use an agent to simply list their property and handle the details on their own.
But the Competition Bureau rejected those changes saying they do not create more choice for home buyers and sellers, and instead give realtors a "blank cheque" to impose new anti-competitive rules.
Commissioner of competition Melanie Aitken told the Calgary Chamber of Commerce on Tuesday that there is no guarantee the amendments are permanent.
"Until there is some certainty that the rules aren't going to shift, that it's not going to be a risk of a fleeting opportunity, (realtors are) not going to make the investment to offer up those innovative service and pricing models, she said.
"Until they do so, we're concerned we're not going to see the choice for the Canadian consumer and we're not going to see the downward pressure on prices that we would otherwise expect to see."
The bureau has said it will continue to pursue an application filed with the Competition Tribunal in February seeking to strike down CREA's rules on the use of its Multiple Listings Service, which it has said restrict consumers' ability to conduct real estate transactions without an agent.
CREA allows only its members to post homes for sale on its MLS database, which is operated by regional real estate boards and where 90 per cent of homes in Canada are sold.
Kraft says the rules preventing her from listing her home on MLS drive her to use smaller private web sites that charge a flat fee.
"(But) not everyone knows to look there, I don't even look there myself," she said.
Listing privately also reduces the number of potential buyers who see her home, she said, because part of the CREA rules require a listing agent to give the buying agent a percentage of commission, and they're less inclined to show a home they won't be making a profit from.
Kraft said she wants to be able to decide which services she would like an agent to provide and which she'd do herself.
"There's people like me, if you've bought and sold a few houses you know exactly what an agent has to do, its no big mystery," she said.
John Andrew, director of the executive seminars on real estate at Queen's University, noted most buyers already do online research and no longer wait for an agent to present them with homes.
"Most consumers want to do at least the initial leg work themselves...and it's bad for the industry that people haven't really been able to do that."
He added that CREA could have avoided the anti-competition troubles by updating the site and making more information available to consumers, to help turn casual shoppers into customers.
"The way it is now if you're interested in possibly moving, possibly looking for another house, you've basically got no choice but to hire an agent."
Philip Soper, president of Royal LePage, said the changes to the association's rules do give agents more flexibility to offer "a la carte" services(With a separate price for each item on the menu.), which will prompt an increase in the number of discount brokerages.
He added the industry is seeing a number of consumer portals cropping up, adding that Kijiji, an eBay subsidiary that operates online classified, is already Canada's second largest real estate site.
But Soper said even if the data available on the MLS system was opened to consumers, the industry wouldn't change dramatically.
"There are many low priced alternatives already competing for the price sensitive portion of the market, so I don't think rule changes will result in a big shift in the way real estate services are offered in Canada."
Soper said it wouldn't be any more complicated than using websites like Kijiji or Craigslist for a homeowner to list a home themselves, but added privacy would be a major concern.
"By far and away the majority of people pay a realtor to act as a screen in order to weed out serious offers from tire kickers or worse, people who are just trying to sell you something."
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Competition Bureau seeks real estate shake-up
Karen Mazurkewich, Financial Post · Nov. 2, 2009 | Last Updated: Nov. 3, 2009 2:01 PM ET
TORONTO -- A landmark investigation by the federal Competition Bureau may dramatically change the way homes are bought and sold in Canada.
The Canadian Real Estate Association has informed its members that a two-year inquiry by the Competition Bureau has been completed and that significant changes to their practices have been requested.
CREA is still negotiating a settlement with the Competition Bureau, but it is expected that the industry will be forced to loosen its restrictive access to the MLS system and allow discount brokers into the market.
Specifically, the Bureau has asked CREA to change its rules that state a licensed realtor must act as an agent for the seller through the entire time of the listing contract posted on the Multiple Listing Services, and that the listing realtor shall receive and present all offers and counteroffers to the seller.
In his Oct. 29th letter, president Dale Ripplinger told members “the bureau is concerned that CREA’s rules have restricted consumer choice and limited the scope of alternative business models.” He added: “Please note that although we describe the Bureau’s position, CREA does not agree with the Bureau’s views.”
“The outcome of this would be that discount brokerages would have access to MLS, which would have a very, very significant impact on how real estate transactions are conducted in Canada,” said Subrata Bhattacharjee, a competition lawyer at Heenan Blaikie.
More significantly for Canadian homebuyers, they may pay less in realty commissions and fees if the Bureau gets a favourable settlement.
At least one former discount broker is thrilled with the news.
“This is a huge win for the consumer,” said Lawrence Dale, co-founder of Realtysellers, a discount broker which closed its doors in 2006. He claims the CREA rules, which had to be followed by all member real estate boards in Canada, made it impossible for his company to continue to operate.
Mr. Dale added: “We are pleased the Competition Bureau agreed with us that these activities were anti-competitive and must be stopped. While it’s a complete vindication for us, it’s a sad and embarrassing day for organized real estate.”
If CREA reverses its stance on MLS, home buyer’s agent will be able to negotiate directly with the seller or the seller’s lawyer if the seller chooses, and not be required to have a listing agent involved in the negotiations.
In addition, consumers could pay a fee to list their homes directly on MLS.
The battle between the Bureau and CREA goes back to 2002, when Mr. Dale and his former partner Stephen Moranis filed a lawsuit against the Toronto Real Estate Board and CREA. The Competition Bureau opened an inquiry and the association settled by agreeing to roll back some of its restrictions relating to the acceptance of listings on the MLS system.
In 2007, CREA’s membership approved new “interpretations” which replaced those restrictions. Mr. Dale and Mr. Moranis filed a $100-million lawsuit against CREA earlier this year, arguing that the association was in breach of its original settlement. The pair only recently served the lawsuit.
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Competition Bureau Reaches Agreement in Principle in Real Estate Case
OTTAWA, September 30, 2010 — The Competition Bureau announced today that it has reached an agreement in principle with the Canadian Real Estate Association (CREA), which, if ratified by CREA's members, will ensure that real estate agents have the flexibility to provide innovative service and pricing options to customers.
"This agreement is welcome news for Canadians", said Melanie Aitken, Commissioner of Competition. "If ratified, the agreement will ensure that consumers have the ability to choose which services they want from a real estate agent when selling their home, and to pay for only those services. It also provides much-needed flexibility for real estate agents by ensuring that they have the ability to offer the variety of services and prices that meet the needs of consumers."
In February, the Commissioner of Competition challenged, before the Competition Tribunal, anti-competitive rules imposed by CREA on real estate agents who list residential properties using the Multiple Listing Service (MLS) system. The Bureau launched its challenge after three years of discussions and several months of intensive negotiations with CREA. The Bureau agreed to resume negotiations in September after being approached by CREA's representatives.
Under the agreement, CREA will eliminate its ability to adopt anti-competitive rules that discriminate against real estate agents who are hired by consumers only to list or merely "post" a residential property on the MLS.
"Since challenging CREA's rules, the Bureau's goal has always been to achieve a long-term solution that would strengthen competition in the residential real estate brokerage services market," added Commissioner Aitken, "This resolution, if ratified by CREA's membership, achieves this goal."
After the agreement is ratified, a copy of the legally binding consent agreement will be posted on the Competition Tribunal Web site. The agreement will remain in force for 10 years.
The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.
For media enquiries, please contact:
Phil Norris
Communications Advisor
Public Affairs Branch
819-953-8230
For general enquiries, please contact:
Information Centre
Competition Bureau
819-997-4282
Toll free: 1-800-348-5358
TTY (hearing impaired): 1-800-642-3844
www.competitionbureau.gc.ca
Enquiries/Complaints
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So while the public perception of Iraq is still one of high risk, and it is admittedly far from being a developed economy, the financial markets are already beginning to recognise Iraq’s improving outlook.
If you’re considering taking advantage of these new developments in Iraq, RAW and THAQALAIN are here to help you. For more information please contact Thaqalain or Mahdi.
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