Aleppo Real Estate Market Dollarises Amid Shortage of Syrian Pounds

Since the Assad regime fell in December 2024, the US dollar has edged out the Syrian pound (SYP) in real estate sales in most areas under the control of the transitional administration, especially in Aleppo. Amid astronomical property prices, and lower supply of pounds in the market, dollarised property prices came as a natural response in the market, aimed at stabilising prices and avoiding exchange rate fluctuations.

The optimistic atmosphere regarding the possible return of Aleppans from exile and the diaspora spread a sense of relief in the real estate market, with expectations of increased demand. As a result, property traders pre-empted this with intensive purchases of housing units, particularly in the western neighbourhoods of Aleppo city, most of which are licensed housing in zoned areas, in the hope of reselling them within a short period. According to estimates by those familiar with Aleppo’s real estate market, real estate sales of around 3,000 housing units have taken place since Bashar Al-Assad fell, moving a money supply of about USD 150 million.

The use of a foreign currency, alongside or instead of the local currency, in commercial transactions is called “dollarisation.” The real estate market is considered one of the sectors most affected by dollarisation because of the rise in property prices, which have reached astronomical figures in pounds, hindering transactions in cash or through bank transfers.

Among the reasons for dollarisation is the decline in the supply of pounds in the market. This shortage of cash has reduced the ability of banks to inject cash into the market in the form of loans to finance economic activities, including the housing sector, although loans for the purchase of housing have been very limited for years.

Walid Al-Naif, the owner of a real estate office in Aleppo’s Zahraa district, told The Syria Report that he was forced to deal in dollars because of their availability in the market, and the ease of obtaining them in large amounts, as the value of the dollar relative to the pound decreased by around 35 per cent from the period just before the fall of Mr Assad. He explained that this facilitated real estate sales transactions, as the price of property was paid in dollars, in relatively few bundles compared with pounds. This is what pushed real estate office owners to “record the value of properties in sales and rental contracts in dollars, regardless of the legal consequences, if any.”

Lawyer Aya Karim explained that under current laws it is still prohibited to use anything other than the pound in real estate transactions. Decree No. 5 of 2024 prohibits Syrians and foreign residents who are not investors from using foreign currency in such transactions, considering it a crime subject to penalties. She added that, in principle and under Syrian law, property purchase and rental contracts can be written in dollars, since there is no explicit text preventing that. However, foreign exchange regulations and local laws restrict payment in currencies other than the Syrian pound, which may expose contracting parties to legal or financial risks.

In reality, however, lawsuits and prosecutions regarding non-pound transactions have been suspended, according to real estate lawyer Ali Mosto. The Central Bank, in mid-May 2024, introduced a measure lifting restrictions on dealing in dollars, in order to encourage individuals and companies to release their savings in dollars. The lawyer added that those dealing in currencies other than the pound are currently not being held accountable, despite no new law having been issued or amendments made to the old law. According to Mr Mosto, property rights are preserved if property values are written in contracts in dollars, but it is preferable to write the price in pounds along with its equivalent in dollars.

Mr Mosto pointed out that the State is turning a blind eye to the use of the dollar as a medium of exchange or legal tender alongside the Syrian pound, but that this does not constitute official recognition or approval of dollarisation; such approval would cause a decline in the value of the pound. The lawyer indicated that there are leaks suggesting that the next People’s Assembly will look into this matter and pass laws to regulate it, possibly requiring that contracts be written in pounds, after replacing the current currency with a new one previously announced by the Central Bank governor and the Minister of Finance.