Iraq property market slows amid dollar surge, weak demand
Shafaq News- Baghdad/ Karbala
Iraq's property market is showing signs of a broad slowdown, with sales falling in Baghdad, the Kurdistan Region and several provinces, while some real estate offices in Karbala have gone nearly a month without completing a single deal.
Local broker Abu Ali told Shafaq News that, in one example, a house in Karbala previously offered for around 100 million Iraqi dinars ($65,789) was now being offered for between 60 million ($39,474) and 75 million ($49,342), depending on its location and specifications. Agricultural land sales have also declined, with few buyers and property owners increasingly reluctant to sell.
He linked the slowdown to the rising US dollar exchange rate on the parallel market, which climbed above 160,000 dinars and reached around 168,000 dinars per $100, prompting potential buyers to postpone purchases.
Dollar Pressures and Purchasing Power
Speaking to Shafaq News, economist Mustafa Al-Faraj said Iraq's reliance on oil revenues and imported building materials leaves the property market vulnerable to exchange-rate fluctuations. A stronger dollar raises construction and finishing costs, while housing prices remain closely tied to the US currency despite many buyers earning limited incomes in dinars.
He called for economic diversification, stronger domestic production, improved household incomes, and wider access to housing loans and financing.
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Government Measures and Market Uncertainty
According to economist Dhiya Al-Mohsen, the slowdown reflects a gap between buyers' and sellers' expectations, with some owners demanding prices based on past transactions while buyers consider those prices unjustified.
Government measures targeting corruption and illicit funds have contributed to the slowdown, Al-Mohsen said, citing the Dawn Crackdown campaign launched by Prime Minister Ali Al-Zaidi's government on June 28, 2026.
Other factors cited by Al-Mohsen include the Aqari real estate platform, changes to property-transfer procedures, and taxes on buyers and sellers. Registration costs, municipal fees, and fines have increased transaction expenses, prompting some buyers to delay purchases.
Meanwhile, the government's Watan Initiative aims to distribute one million serviced residential plots to eligible Iraqi families, alongside plans for new housing developments. According to Al-Mohsen, these announcements have encouraged some prospective buyers to postpone purchases in the hope of obtaining land or housing at lower prices.
Read more: Iraq's Dawn Crackdown moves from raids to rulings
