Property investment, at its basic level, all comes down to supply and demand. From the article it would appear (quite logically) that there is very high supply and very low demand at the moment.

Maybe for the priviledged view in the Green Zone, I can imagine that property there could have goe through the roof. After all, I can imagine that every Iraqi is trying to get to live there. So perhaps this is where the expat you met got his $400,000 home.

If I was a gambling man and incredibly patient though, I think that I would start buying up parcels of prime location land if I could find any.

With land, you don't have to worry about it getting blown up and if, one day in the far off future, they ever do sort out their problems, there is going to be a massive shortage of prime property and so I can see that there would be a building boom to follow.