Shafaq News- Baghdad
Housing listings are piling up, and car
markets are drawing crowds without buyers across Iraq, as fast-moving prices
and delayed incomes make major purchases increasingly out of reach for
households, according to interviews with residents, traders, and economists.
Fluctuations in the US dollar exchange
rate, rising gold prices, and repeated delays in public-sector salary payments
have combined to slow activity in two of the most sensitive sectors for Iraqi
families: housing and automobiles. While prices have largely held steady, the
number of completed transactions has dropped sharply.
In Baghdad, Abu Ahmed, 52, has been trying
to sell his home for more than four months without success. Potential buyers,
he said, lose interest once they hear the price or say they are waiting for the
dollar to stabilize. Homes that once sold within weeks now sit on the market
indefinitely, he added, describing conditions as “almost completely stalled.”
Read more: Iraq’s economic “perfect storm”: Experts warn the crisis is structural and social
Economists say the slowdown reflects
growing uncertainty rather than a collapse in asset values. Mustafa Faraj, an
economic analyst, explained that Iraq’s heavy dependence on imports makes
domestic markets highly sensitive to currency movements, particularly in the
car sector, where vehicles are priced in foreign currency. Housing prices, he
noted, are also indirectly affected through oil revenues and dollar-based state
spending.
Faraj said the current stagnation is being
driven primarily by liquidity shortages and delayed salaries, which have
“weakened purchasing power and pushed households to postpone large financial
commitments.” At the same time, rising gold prices and regional geopolitical
tensions have encouraged wealthier Iraqis to shift savings toward gold,
reducing cash circulation in the broader economy.
Concerns about keeping savings in state-owned
banks and recent restrictions on transferring funds abroad have reinforced this
trend, further tightening liquidity in consumer markets.
Local authorities have acknowledged the
slowdown. In December 2025, the Baghdad Provincial Council linked declining
real estate activity to high fines and taxes on subdivided housing units. The
council said it was preparing recommendations to reduce subdivision penalties
and limit taxation to sold portions of land, to ease pressure on the market.
Read more: Liquidity shortage delays Iraqi salaries: Experts warn of prolonged financial strain
Safwan Qusay, an economic expert, did not
place responsibility on monetary policy, pointing out that the Central Bank of
Iraq and commercial banks continue to offer financing programs aimed at
supporting homebuyers and, in some cases, vehicle purchases. He argued that
gold price fluctuations are driven by global markets rather than domestic
monetary decisions, and that housing demand could recover independently of
turbulence in currency or commodity prices.
On the ground, however, business owners
report little sign of recovery. Radwan Al-Yasiri, who runs a car showroom in
Baghdad’s Al-Bayaa district, said sales have nearly stopped. Markets that were
once crowded on weekends now see only sporadic transactions. He attributed the
decline to weak purchasing power, inflation, higher customs fees, and tighter
regulations on imported vehicles, “all of which have pushed prices higher and
discouraged buyers.”
Real estate broker Abdul Hassan Kazem, who
operates a property office in Baghdad’s Al-Jihad neighborhood, said his last
home sale was more than two months ago. Current activity, he noted, is largely
limited to rentals, as buyers struggle to match prices with their incomes.
Economic observers warn that the
stagnation may reflect a deeper contraction in domestic demand rather than a
temporary pause. Khaled Al-Jaberi, head of the Ousoul Foundation for Economic
and Sustainable Development, said eroding purchasing power and tightening
liquidity have forced households into cautious spending patterns, affecting
multiple sectors beyond housing and cars.
According to Al-Jaberi, vehicles were hit
first because they represent postponable spending during income shocks. Real
estate, while retaining nominal value, has entered a phase of what he described
as “transactional paralysis,” marked by rigid prices and a lack of buyers able
to complete deals.
He added that newly married couples,
traditionally a key driver of demand for housing, gold, furniture, and
construction materials, are increasingly delaying marriages or scaling back
wedding plans due to prices that no longer align with incomes. This, he said,
has triggered a slowdown across interconnected markets.
While gold has become a refuge for some
households, Al-Jaberi warned that the trend benefits only higher-income groups
with existing assets, leaving most families outside effective saving and
consumption cycles. The core problem, he argued, is not a shortage of money in
the system, but blocked channels preventing liquidity from reaching real
demand.
“Without targeted financial tools to break
the current freeze without fueling inflation, the slowdown risks hardening into
a prolonged economic contraction,” he concluded.
Written and edited by Shafaq News staff.
