How does the dollar influence home purchases in Colombia?

Although many associate fluctuations in the dollar exclusively with the international economy, its impact on the Colombian real estate market is more significant than it seems. Buying a home is one of the most important financial decisions and can be directly influenced by fluctuations in this currency. So far this year, the dollar in Colombia has shown a downward trend: it went from $4,409.15 COP/USD on January 1 to $4,121.97 COP/USD on June 6, registering a variation of -7.06%. During this period, the minimum value was $4,073.56 (February 24) and the maximum was $4,416.69 (April 10). In this article, we explain how the dollar influences home purchases in Colombia.

Why does the dollar influence the real estate market in Colombia?

Although many people associate the behavior of the dollar with foreign trade, its variation also impacts the real estate market in Colombia in several ways:

Foreign investment:

Many foreigners invest in Colombia attracted by the profitability and growth of the real estate sector. When the dollar rises, their purchasing power in pesos increases, thereby driving demand in certain segments, such as exclusive properties in Medellín or tourist real estate. Conversely, when the dollar depreciates, as it did in 2025, they take advantage of the more favorable exchange rate to buy used real estate in the country.

Cost of supplies and materials: Many construction materials, finishes, and technologies are imported and paid for in dollars. Therefore, when the dollar rises, construction costs tend to increase, which means that the price of apartments for sale in Medellín goes up.

Perception of economic stability: When the dollar is highly volatile, many people perceive greater country risk or political and economic instability. This perception affects investor and buyer confidence, which directly influences the dynamics of the real estate market.

Financing and interest rates: Banks and developers often link some mortgage loans or loans for real estate projects to international rates. Therefore, when the dollar rises or falls, they adjust the availability and cost of these loans, which impacts the investment decisions of large investors and construction companies.