A Place of Solace?

Kurdistan's most valuable natural resource is peace

The WSJ wrote on May 16 how the Kurdish-governed section of Iraq, the northern part, hopes to emulate the success of Dubai, and Adu Dhabi. Although observers familiar with the region readily point out, "It's no Dubai,"the semi-autonomous Kurdish government is pursuing an aggressive strategy to develop housing for the impending wave of foreign workers attracted by the region's oil reserves.

Developers are offering homes in housing complexes with names like English Village. Already English Village has sold out its stock of 410 houses, costing from $130k to $160k, and move in is still a year away. Another more tony development called "Dream City" in Erbil, and has 1,200 units, costing as much as three-quarters of a million dollars.

To lure companies, Kurdistan is offering a 10-year tax holiday, 100% land ownership, and international arbitration for settling contract disputes. But it's greatest asset is the relative peace of several of the region's large cities. Although volatile places like Mosul are just 50 miles away, cities like Erbil have seen dramatically less violence. But that's not to say none.

All these dynamics are adding up to drive up home prices, and home rental prices, 100% to 200% over the last few years. The problem is wages for local Kurds is not increasing at the same rate and they're being priced out of the market. (Sort of sounds like what happened in Silicon Valley during the tech boom when local schools couldn't pay teachers enough to live in the areas where they taught.) GEO