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Iraqi refugees spill into Jordan, driving up prices

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Before the Iraq war started, Bashir Al-Zubi had plans to graduate from the ranks of renter to Jordanian homeowner.

However, housing prices have soared since the war ignited in the spring of 2003, and thousands of Iraqis fled to Jordan. An apartment that would have cost Mr. Zubi $42,000 before the war now costs closer to $70,000. But the increases have affected not just the real estate market, but the daily cost of living as well.

"Everything in Jordan is expensive because of the Iraqis," says Mohamed Arafha, a Jordanian barber. "Groceries, apartments, haircuts, everything."

It's a phenomenon Jordan has witnessed nearly every decade since Palestinian refugees poured over the border in 1948, when the state of Israel was created. Each time, the wave of refugees – coming from almost every Middle Eastern conflict – drives up the cost of living, forcing many Jordanians to postpone plans for home ownership and marriage.

"People come to us as a haven," says Yusuf Mansur, an economist and CEO of the Jordanian economic analysis firm the Envision Consulting Group, citing Jordan's relative stability. "It's crisis after crisis that drives the [Jordanian] economy."

While inflation has affected all aspects of life in Jordan, it's been most pronounced in the real estate market.

For Waleed Abu Ragheb, a 25-year-old Jordanian fabric vendor, that has other ramifications. Like other Arabs, Jordanians live in their family home until they're ready to get married. But in order to do so, a man must have his own home. An apartment that would have cost $140 per month in 2003 now goes for $210. With a monthly salary of $420, Mr. Ragheb says it'll be another two years before he can afford an apartment.

"The Iraqi people had a strong effect on the economy," says Ragheb, who, like many Jordanians, perceives the Iraqi refugees as wealthier on average than their hosts.

"The impression of many Jordanians is that the Iraqis here are all wealthy ... and that they are the cause of the inflation and the rising cost of prices in Jordan," says Robert Breen, who heads the United Nations High Commissioner for Refugees program for refugees in Jordan.

The refugees' effect on real estate prices has made Jordanians reluctant to sell for fear of missing the next price boom – a tendency that further increases prices.

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