Dollar rate change freezes Erbil property market

Shafaq News- Erbil

The property market in Erbil, the capital of the Kurdistan Region of Iraq, has effectively stalled after Iraq raised the official US dollar exchange rate, with prices for housing units under construction expected to rise, real estate expert Sardar Azad told Shafaq News on Wednesday.

Azad, who owns a real estate company in Erbil, said no property transactions were recorded in the city on the first day of the exchange-rate increase as buyers and sellers held off amid uncertainty over market conditions.

He attributed the expected increase in prices to higher costs for building materials and supplies, which are priced in dollars, as well as additional costs associated with installment-based sales, advising residents to retain available cash, whether in dollars or dinars, and avoid rushing into financial decisions until market conditions become clearer.

Iraq’s Cabinet on Tuesday approved a new official exchange-rate structure following an emergency recommendation from the finance minister and Central Bank governor, setting the dollar at 1,500 dinars for purchases from the Finance Ministry, 1,510 for sales to banks and 1,520 for sales by banks and non-bank financial institutions to end users. The adjustment raised the official rate for the public by 20,000 dinars per $100 from the previous 132,000 dinars.

Before the decision, the parallel-market rate had climbed to around 165,000 dinars per $100 amid speculation and expectations surrounding the exchange-rate change. On Wednesday, after the new rate took effect, the parallel rate rose further to around 168,500 dinars per $100 in Baghdad and 168,200 in Erbil.

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