If you invest in or develop in Iraq, you’ve probably already felt it: the cycle has shifted.
Policy rates are still high at 5.5% (CBI, September 2024), but inflation has collapsed from 2.7% in 2024 to about -0.6% year-on-year by June 2025. Basra’s ports moved a record 22.4 million tons of cargo and 1,522 ships in the first half of 2025. Tourism revenues climbed to roughly US$5.7 billion in 2024, driven by religious visitation and short-haul regional travel.
Those aren’t just macro curiosities. They change where you can safely put risk capital to work – and where you’re likely to be left holding half-finished concrete.
Our Iraq 2025H2 Gap Scorecard takes this entire picture and compresses it into a city×sector ranking. Before you scroll down to the chart, this guide walks through what it actually measures, why specific pairs score higher than others, and how you can translate that into IRR, yield, and absorption decisions on the ground.
Think of the scorecard as a heatmap of “risk-adjusted opportunity” over the next 6–18 months. Each city–sector pair (for example, Basra–Industrial & Logistics) is scored from 1 to 5 across six dimensions:
Scores are anchored in hard metrics (CBI, IMF, GCPI, airport, and tourism data) and in project-level evidence for schemes such as Bismayah New City in Baghdad and Al Basra New City/Palm City in Basra. Where official series are gated – MoJ transactions, municipal permits, hotel KPIs – we explicitly label the result as Medium-confidence inference.
For you, the reader, the point is simple: the score tells you where, in the current macro window, capital is most likely to be rewarded for the risk you’re actually taking.
As the scorecard below shows, five combinations stand out.
The top of the table is dominated by two themes: logistics corridors and big-city consumption.
If you’re used to thinking “Baghdad first, everything else later”, Basra topping the list may surprise you. Likewise, if you assumed residential would dominate, it’s notable that logistics and retail outrank housing on risk-adjusted terms.
Let’s unpack why.
Basra’s industrial & logistics score is driven by one blunt fact: throughput. In 2025H1, ports at Umm Qasr North/South, Khor Al-Zubair, and Abu Flous handled 22.4 million tons of cargo and over 1,500 ships. That volume underpins everything from container yards and bonded warehouses to fuel storage, fabrication yards, and cold-chain facilities.
From a yield perspective, this is where you can still reasonably target double-digit IRRs and spreads well above local funding costs – if you price the volatility correctly. The catch is that Basra’s cash flows are acutely exposed to:
So if you’re developing in this sector, you should see Basra logistics as a cyclical trade rather than a bond proxy. Structure deals with:
When you look at the scorecard, that 3.4 isn’t saying “safe”. It’s saying “rich upside for professional risk takers”.
Baghdad scores just behind Basra in Industrial & Logistics, but for different reasons.
Baghdad doesn’t have a port. What it has is scale: roughly 8–9 million people in the metro area, generating about 40% of Iraq’s GDP. Everything that moves through Basra’s ports is ultimately trying to reach someone’s shelf, warehouse, or doorstep in cities like Baghdad.
If you’re underwriting logistics here, your thesis is less about oil cycles and more about urban consumption and distribution efficiency:
Rents for modern warehouse product remain thinly benchmarked, but you can think in terms of steady absorption and mid-single-digit rental growth in IQD, versus high-single-digit growth potential in Basra. On the yield side, the spread over local funding remains attractive, but it feels more like a core-plus play than a pure opportunistic one.
Baghdad’s retail story rhymes with that. Prime malls and high-street corridors in Al-Mansour, Jadriyah, Karrada, and Palestine Street show tight occupancy and waiting lists in anchor categories such as grocery, telecom, and F&B. With inflation near zero and housing and utilities still rising around 3.1% a year, real consumer incomes are stabilising rather than eroding. For necessity retail and well-positioned community centres, which support:
If you’re a retail owner, your job for the next 12 months is to protect NOI – index leases where you can, lock in strong anchors, and clean up weak specialty tenants before e-commerce takes more share.
At first glance, Iraq’s housing story looks like a gold rush. Official and advisory estimates suggest a national shortage of roughly 2.5–3.0 million units, and the government’s one-million-unit programme with ten new cities has made global headlines.
Yet in the scorecard, only Baghdad mid-income residential cracks the top five, and even there, the score is a modest 2.9.
Why?
Because when you dive into the data, you find that supply is neither where it is needed most, nor arriving at the pace implied by PR:
For you as an investor, that means the national “housing boom” is real only on paper. In practice:
You may be asking: “Should I chase the mega-cities?” The scorecard is effectively telling you, “not yet.” A more resilient strategy is to focus on smaller, serviced phases that piggyback on existing grids and roads, price below the US$1,500–2,000/m² band in Baghdad, and leave optionality for future densification.
So, what do you actually do with this map once you’ve studied the chart?
The most significant risk in Iraq is not that demand disappears – it’s that execution drifts. Pipeline dates slip, utilities arrive late, and regulatory clarity follows investment instead of leading it.
As you calibrate IRR and payback:
Our research had to work around missing MoJ transaction series, municipal permit tables, and hotel KPIs. You don’t have to accept the same blind spots in a live deal.
If you are considering an acquisition or JV:
With real rates strongly favorable and inflation unusually low, the temptation is to add leverage to “boost” returns. The scorecard suggests the opposite: Iraq’s upside is coming from growth and repricing, not from cheap money.
Practical takeaway:
If you’re reading this, you’re already the decision-maker in someone’s capital stack – your own, your LP’s, or your lender’s. The data and the gap scores are not the story; they’re the map.
They tell you that:
As you review the scorecard below, use it to pressure-test your pipeline: does each project sit in a high-score quadrant, or are you forcing capital into a low-score box because the land was available?
If you want to go deeper – down to sub-market bands, implied yields, and sector-specific IRR ranges – you can pull the CSVs and evidence pack, or contact us for a more granular breakdown.
Iraq is entering 2025H2 with a rare mix: disinflation, a softer but still positive non-oil economy, and record volumes through Basra’s ports. The Central Bank of Iraq (البنك المركزي العراقي) cut its policy rate to 5.5% in September 2024, just as inflation slowed to 2.7% for the year and then turned slightly negative at -0.6% year-on-year in June 2025 EBRD 2025-26CBI MPR 2024. Real rates are firmly positive, which anchors the dinar but forces capital to be selective.
Behind the headlines, the real estate story is uneven. Baghdad carries most of the country’s GDP and white-collar demand, while Basra’s ports and oil fields drive industrial and logistics risk-on opportunities. Mega-projects like Bismayah New City (100,080 units) and Al Basra New City (100,000 units) have headline scale but long delivery tails HanwhaArab Urban Development Institute.
This article distils a full gate-based research run into a practical scorecard: where to focus, what could change in the next six months, and what data still needs to be unlocked. Use the tables as a starting point for underwriting, then dive into the CSVs and ZIP bundle for your own models.
The Gap Scorecard compares city–sector pairs on six dimensions: Demand, Supply (6–18 months), Pricing Power, Affordability, Liquidity, and Policy/Regulation. Each sector gets a 1–5 score; higher means stronger risk-adjusted opportunity, not just higher yields. Scores are based on official data plus Tier-1 corroboration, with inference only where primary series are gated.
| Rank | City | Sector | Score (1–5) | Why now | Confidence |
|---|---|---|---|---|---|
| 1 | Basra | Industrial & Logistics | 3.4 | Ports handled 22.4m tons and 1,522 ships in 2025H1; pipelines and energy projects need modern warehousing IraqiNewsShafaq. | Medium |
| 2 | Baghdad | Industrial & Logistics | 3.2 | Primary inland distribution hub for ~8–9m people; benefits from trade growth without full oil-price volatility. | Medium |
| 3 | Baghdad | Retail (Prime & Grocery-anchored) | 3.1 | Dense catchments, limited modern stock, and rising tourism spend support high-street and community centres. | Medium |
| 4 | Basra | Retail | 3.1 | Oil and port incomes outpaced formal retail provision; organised formats are still scarce. | Medium |
| 5 | Baghdad | Hospitality (Upscale) | 3.0 | BGW served >3.4m passengers in 2023 and has a US$764m PPP upgrade; quality room stock is still tight Jordan TimesReuters. | Medium |
| Metric | Latest (value · unit) | As-of | Primary | Corroboration | Confidence |
|---|---|---|---|---|---|
| Policy rate | 5.5% | Sep 2024 | CBI Monetary Policy Report 2024 | EBRD CA-Iraq 2025-26 | High |
| Headline inflation (full year) | 2.7% y/y | 2024 | EBRD | CBI MPR 2024 | High |
| Headline inflation (latest) | -0.6% y/y | Jun 2025 | EBRD | S&P Ratings 2025 Iraq note | High |
| Non-oil real GDP | 2.5% y/y | 2024 | IMF Article IV press release | IMF staff report | High |
| Private-sector credit | 14.3% y/y | 2024 | IMF staff report table | Rudaw summary of CBI Q1 2025 report | High |
| FX regime | 1320 IQD/USD official | 2024 | CBI MPR 2024 (FX platform) | XE USD–IQD mid-market | High |
| Ports throughput | 22.42m tons; 1,522 ships | 2025H1 | IraqiNews | Shafaq News | High |
| Tourism revenues | US$5.7bn | 2024 | IraqiNews – tourism | Tehran Times | Medium |
| BGW PPP capex | US$764m | Oct–Nov 2025 | Reuters | Moodie Davitt | Medium |
In short: Iraq has entered a rare disinflationary window with positive non-oil growth and healthy credit, while ports and tourism provide strong real-economy anchors.
Download: Macro Source Log (CSV)
Download: City Source Log (Baghdad & Basra)
Each row below summarises “Now” and a labelled Inference (6-month band). Bands are in nominal IQD unless noted. All inferences carry explicit drivers and ± sensitivities.
| Sector | Now (snapshot) | Inference (6-month band) | Drivers & sensitivities | Confidence |
|---|---|---|---|---|
| Residential | Typical 85m² furnished unit rents for ~694k IQD/month in normal areas and ~1.05m IQD/month in expensive areas (as of Nov 2025) Expatistan. Mid-market apartments sell around US$1,500–2,000/m²; prime strips can exceed US$7,000/m² NIRIJShafaq. | Inference: Rents +0–3% over 6 months; mid-market prices flat to +5% in IQD, prime prices -5% to +5% in USD. | Driven by CPI housing rising 3.1% in 2024, negative headline inflation, strong structural housing deficit (~2.5m units country-wide), and selective bank credit. Sensitivity: ±3pp on rent growth if policy rate shifts by ≥100bps or FX premium widens CBIShafaq – housing gap. | Medium |
| Office | Prime mixed commercial units in Mansour and similar districts advertise at roughly US$15–80/m²/month depending on frontage and spec (2025 listings) PayaOpensooq. No formal vacancy index exists. | Inference: Prime office rents 0–3% higher in IQD; secondary stock -5–10% in effective rent via concessions. | Demand anchored in government, oil services and telecom; non-oil GDP is positive but softer, and credit growth is slowing from a high base. Sensitivity: ±5pp vacancy swing if security or budget execution surprises negatively. | Medium |
| Retail | Prime malls and high-street corridors (Baghdad Mall, Al-Mansour area, Jadriyah) show high occupancy and strong footfall; organised grocery formats and F&B are under-served relative to population density. | Inference: Prime retail rents flat to +3% in IQD; secondary retail -5–10% in effective rents. | Drivers include population growth, tourism revenues of US$5.7bn (2024), and limited new formal stock. Sensitivity: downside if wage arrears or subsidy cuts hit disposable incomes; upside if more tourism and pilgrimage flows convert into spend. | Medium |
| Industrial & Logistics | Baghdad functions as the inland distribution hub linking Basra ports, KRI and western corridors. Data on warehouse rents and vacancy are sparse, but demand for secure, power-reliable storage is visibly rising. | Inference: Quality warehouse rents +3–7% in IQD; vacancy modestly lower in serviced assets. | Ports moved 22.4m tons in 2025H1; e-commerce, FMCG and pharma logistics grow off a low base. Sensitivity: ±3pp on rent growth to port volumes and any disruption to the FX platform or import rules. | Medium |
| Hospitality | BGW passenger volumes grew from 2.65m (2022) to over 3.4m (2023); the new PPP expects to lift capacity towards 8.5–9m pax in the first phaseJordan TimesZawya – CAAP PPP. Government statements have flagged full occupancy in key hotels during peak periods. | Inference: Upscale hotel ADR +5–10% in IQD with occupancy around 70–80%; midscale/budget occupancy 50–65% with high seasonality. | Drivers include air connectivity, conferences, official delegations and an improving security baseline. Sensitivity: significant downside if regional tensions or travel advisories resurface. | Medium |
Download: Baghdad Sector Source Log (CSV)
| Sector | Now (snapshot) | Inference (6-month band) | Drivers & sensitivities | Confidence |
|---|---|---|---|---|
| Residential | ABNC (100,000 units) and Palm City (120,000 units) are master-planned but still in early infrastructure and initial phases. Transaction and rent data are thin; evidence suggests under-provision of quality housing relative to oil and port jobs. | Inference: Rents +1–3% in IQD for well-located worker and mid-income housing; sale prices flat in real terms. | Supported by port and energy-sector wage growth and limited completed stock. Sensitivity: high to oil prices and project execution; a sharp capex cut could freeze absorption. | Medium |
| Retail | Basra’s retail base skews to traditional high streets; modern malls and community centres are scarce. Port- and oil-linked incomes underpin daily spend. | Inference: Prime retail rents 0–3% higher in IQD; secondary retail flat to -5% as informal competition grows. | Drivers: cargo throughput, oil-service payrolls, and urbanisation. Sensitivity: highly cyclical with oil and port sentiment. | Medium |
| Industrial & Logistics | Ports handled 22.4m tons in 2025H1; multiple energy and petrochemical projects are in pipeline. Modern industrial parks and logistics hubs remain limited around Khor Al-Zubair, Umm Qasr and Al-Faw. | Inference: Prime port-adjacent warehouse rents +3–8% in IQD over 6 months; occupancy tightening for secure yards and cold-chain nodes. | Strong link to port volumes and integrated energy capex; very sensitive to oil prices and any geopolitical disruptions that affect exports. | Medium |
| Hospitality | Basra International Airport processed just over 0.5m passengers in 2022, with growth since then driven by business and project trafficICAA / COSIT. Hotel stock is modest; many visitors stay in business-class hotels linked to ports or oil operators. | Inference: ADR flat to +5% in IQD; occupancy around mid-50s%, skewed to project cycles. | Upside if energy and port capex accelerate; downside if oil prices weaken or major projects slip. | Medium |
Download: Basra Sector Source Log (CSV)
Claim: Iraq’s one-million housing programme means every city will see a housing boom and stable prices.
Test: Compare announced units to delivered units and rent dynamics in Baghdad vs Basra vs religious cities.
Evidence: BNCP’s 100,080 units have delivered about 30,000 houses so farKorea JoongAngAsiae. ABNC and Palm City together plan 220,000 units but are still in early phasesAUDIIBN – Palm City. Independent estimates put the national housing gap near 2.5–3.0m unitsShafaqAGBI.
Finding: The boom is local, not national. Baghdad concentrates most actual delivery; Basra and shrine cities see rising prices without matching completions.
Implication: Underwrite Baghdad mid-income projects with cautious absorption assumptions; treat Basra and secondary cities as shortage markets where rent tension is high but execution and affordability risks are higher.
Claim: Basra, as the oil and ports hub, offers safer, more stable real estate returns than Baghdad.
Test: Compare exposure to oil prices and USD liquidity for each city’s demand and rental base.
Evidence: Basra’s ports and energy clusters depend directly on oil volumes and USD-denominated trade. Port throughput closely tracks oil-export conditionsIraqiNewsINA. Baghdad’s demand mix is broader, combining public-sector employment, services, tourism and federal budgets. FX and sanctions shocks disproportionately hit trade-related and dollar-reliant flows, which Basra depends on more.
Finding: Basra’s industrial and residential cashflows are more cyclical, not less. Baghdad shows lower direct oil beta, even if political risk is higher.
Implication: Price Basra logistics and worker housing with a higher risk premium and greater downside scenarios. Use Basra as a high-beta sleeve, not as a core stabiliser.
| Rank | City | Sector | Score | Why now | Confidence |
|---|---|---|---|---|---|
| 1 | Basra | Industrial & Logistics | 3.4 | Ports and energy projects require modern, secure yards, warehouses and cold-chain facilities; current stock is thin. | Medium |
| 2 | Baghdad | Industrial & Logistics | 3.2 | Largest inland consumption hub; logistics benefits from trade growth with less direct oil and FX volatility. | Medium |
| 3 | Baghdad | Retail (prime & grocery-anchored) | 3.1 | Dense catchments, limited organised retail, and rising tourism create durable tenant demand. | Medium |
| 4 | Basra | Retail | 3.1 | Port and energy incomes are under-served by modern retail; early movers can shape formats. | Medium |
| 5 | Baghdad | Mid-income Residential (serviced) | 2.9 | Structural housing shortage and delayed delivery; mid-ticket, infrastructure-backed schemes can undercut over-priced prime stock. | Medium |
Downloads: HBU Notes (Markdown) · Full Iraq 2025H2 Data Pack (ZIP)
The Iraq Real Estate Outlook 2025 H2 is a six-month, data-driven view of Iraqi real estate covering Baghdad and Basra across all major sectors. It is designed for developers, institutional investors, lenders, and family offices who need underwrite-ready inputs on demand, supply, pricing power, and policy risk in the Iraq property market for 2025 H2.
The Iraq Real Estate Outlook 2025 H2 uses a gate-based process: macro (Gate B), city drill-downs (Gate C), sector blocks (Gate D), contrarian tests (Gate E), gap-scorecard (Gate F), and evidence pack (Gate G). Every decisive metric in the Iraq real estate outlook pairs an official source (CBI, IMF, EBRD, GCPI, CSO) with an independent Tier-1 corroboration, then converts that into 6-month forecast bands with explicit drivers and ± sensitivities.
The Iraq Real Estate Outlook 2025 H2 focuses on Baghdad and Basra and seven sectors: Residential, Office, Retail, Industrial & Logistics, Hospitality, Education, and Alt-Assets (healthcare, data centres, cold-chain, student housing). The Iraq real estate outlook uses the same scoring template for each city×sector, so developers and investors can consistently compare, for example, Baghdad logistics vs Basra logistics, or Baghdad residential vs Basra residential.
Developers can use the Iraq Real Estate Outlook 2025 H2 to rank locations and products by risk-adjusted demand rather than by headline hype. The sector scorecards show “Now” vs “Inference (6-month band)” for rents, prices, and absorption. For example, the outlook flags Baghdad mid-income housing and both cities’ logistics as higher-score opportunities, while the same Iraq property outlook warns that prime residential pricing in Baghdad is stretched and Basra housing is highly oil-cycle sensitive.
Institutional investors and lenders can plug the Iraq Real Estate Outlook 2025 H2 directly into models: the Gap Scorecard gives a 1–5 score per city×sector, and the evidence pack logs every macro and sector assumption with value, unit, and as-of date. The Iraq real estate outlook provides yield and rent-growth bands, labelled Inference, with drivers such as inflation, credit growth, port throughput, and tourism, so you can stress-test IRRs by shifting each driver rather than relying on a single-point forecast.
The Iraq Real Estate Outlook 2025 H2 highlights three core opportunity clusters:
Three risks would materially change the Iraq Real Estate Outlook 2025 H2:
The data pack for the Iraq Real Estate Outlook 2025 H2 includes CSV logs for macro, city, and sector metrics, the country Gap Scorecard, and the Evidence Pack, plus JSONL evidence cards and markdown summaries. That means every key number in the Iraq real estate outlook—policy rate, inflation, ports tonnage, tourism revenue, housing pipeline, sector scores—can be traced back to a row in a CSV with primary and corroborating URLs, ready for your own dashboards or models.
The Iraq Real Estate Outlook 2025 H2 is built with a 6-month horizon and a 12-month freshness guard, and is intended to be reissued at least twice per year. The same template can be reused for Iraq 2026H1, Iraq 2026H2, or for other countries by swapping in new macro and sector data. For developers and investors, that means the Iraq real estate outlook becomes a repeatable framework rather than a one-off report.
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