Search for safety revives Baghdad housing market

By Mohammed Abbas

BAGHDAD (Reuters) - A dramatic fall in violence has breathed life into Baghdad's once moribund property market, although the hunt for homes in Sunni and Shi'ite enclaves bodes ill for sectarian reconciliation in the Iraqi capital.

Real estate prices have doubled in some parts of Baghdad in recent months and many properties sell or are leased as soon as they hit the market, say the city's realtors, who as recently as last year were jobless as sectarian killings raged in the city.

"Last year there was lots of real estate to sell and no buyers. Now it's the opposite. There's not enough for sale. If you put something up for sale, it's immediately sold," said Abdullah Jasim of the al-Noor real estate agency.

The government has urged millions of Iraqis to return home, sometimes even sponsoring flights to bring them back, following a drop in violence to four-year lows in recent months.

But the motives behind many real estate deals cast a shadow over efforts to reconcile Shi'ites and Sunni Arabs, whose desire to live in exclusive sectarian enclaves is a major driver behind the resurgent property market, realtors say.

"Districts are now reserved for each sect ... everyone knows that if you go to this area, you're this sect, and if you go to that area, you're that sect," said realtor Mahmoud al-Mokhtar.

There are 2.8 million people displaced in Iraq. Most are from Baghdad, and fled a wave of violence that followed the bombing of a revered Shi'ite shrine in 2006.

At the height of the chaos, sectarian death squads killed dozens of people each day, dumping their bodies in the streets.