The dollar at a 7-year low: what does it mean for your real estate inv

7 min read

On July 23, 2026, the dollar hit $3,206 pesos — its lowest level in seven years. Today it stands at $3,210. Just twelve months ago it was close to $4,110.

If you have savings, if you are thinking about investing, or if you already hold a real estate investment, this move affects you. We explain how, in plain language.

First: what is the TRM and why does it matter?

The TRM (Market Representative Rate) is the official price of the dollar in Colombia. It is published each day by the Financial Superintendency, and it reflects how many Colombian pesos you need to buy one dollar.

When the TRM falls, the Colombian peso strengthens. When it rises, the dollar becomes more expensive and the peso loses value.

In plain words: the peso appreciating means you now need fewer pesos to buy one dollar. Example: a year ago a dollar cost COP $4,110 and today it costs $3,210: the peso appreciated, and those same $4,110 in savings now buy 1.28 dollars instead of 1.

What is happening today is unusual: the peso has appreciated more than 21% against the dollar over the last 12 months. It is one of the strongest moves of the past decade.

Why did the dollar fall so much?

There is no single reason. Several forces are acting at the same time:

1. Interest rates in Colombia are very attractive. The Banco de la República keeps rates high (around 12%), which leads foreign investment funds to bring dollars into Colombia to earn returns in pesos. More dollars coming in = the price of the dollar falls.

2. The government issued a historic amount of external debt. Colombia placed close to US$4,950 million in international bonds. Those dollars flowed massively into the local market, increasing supply and pushing the price down.

In plain words: a bond is a loan you make to a government or a company in exchange for interest; external debt is that loan arriving from abroad and in dollars. Example: Colombia borrowed US$4,950 million. With that many dollars entering the country at once, the dollar gets cheaper — like anything there is suddenly a lot of.

3. The dollar weakened globally. The U.S. Federal Reserve has been cutting rates, which weakened the dollar worldwide (it fell 9.4% against a basket of currencies). Colombia is no exception.

4. Expectations of political change. Markets anticipate a new government with policies more friendly to investment and to the mining and energy sector, which builds confidence and attracts capital.

How does this affect real estate investment?

This is where it gets interesting. The TRM does not have a single effect — it depends on where you are looking from.

✅ If you hold Colombian pesos and want to invest: this is your moment

Construction costs may fall. A share of construction materials in Colombia is imported: structural steel, finishes, specialized equipment, elevators. When the dollar falls, those inputs cost less in pesos. That can translate into lower development costs for new projects — and better margins for investors.

The peso's purchasing power increases. At $3,210 per dollar, every Colombian peso you have saved is worth more in international terms than a year ago. If you invest today in a real asset in Colombia, you are entering with a strong peso.

Less inflation, less pressure on mortgage rates. A cheap dollar lowers the cost of imported goods, which helps keep inflation under control. Less inflation opens the door for the Banco de la República to keep cutting rates — and that makes mortgage loans cheaper.

CDTs are maturing and looking for somewhere to go. It is estimated that more than $100 trillion pesos in CDTs (fixed-term deposits) mature in 2026. With rates falling, that capital seeks assets that generate real returns. Real estate, especially in fractional investment models, becomes a competitive option.

Example: you put COP $10 million into a one-year CDT at 10% and get $11 million back at maturity. When it matures and rates have already fallen, rolling it over earns less — so that money goes looking for somewhere else to be.

⚠️ If you hold dollars or receive remittances from abroad: you need to understand the context

The dollar you hold today is worth fewer pesos. If last year you had US$10,000, those same dollars gave you $41 million pesos. Today they give you $32 million. It is a real impact that cannot be ignored.

For Colombians abroad, buying in Colombia is more expensive in dollars. An article in La República notes that the dollar's drop makes accessing housing in Colombia significantly more expensive for those who earn in dollars and want to invest in pesos.

But there is a long-term reading. The bet for an investor with dollars is not a currency bet — it is about the asset's appreciation in pesos. If the property appreciates enough in COP, it can offset (and exceed) the effect of the TRM.

A concrete example: you invest US$10,000 today → at a TRM of $3,210 = $32,100,000 pesos. The property appreciates 10% per year for 3 years → $42,700,000 pesos at exit. How much do you recover in dollars depending on the exchange rate at that time?

TRM $3,210 (same as today): US$13,300 — return +33%
TRM $3,800 (moderate rise): US$11,240 — return +12%
TRM $4,500 (strong rise): US$9,490 — return -5%

The honest analysis: the key is not today's cheap dollar, but choosing an asset that appreciates enough in pesos to cover that currency risk.

In plain words: currency risk is the risk of earning in one currency and losing it in the conversion to another. Example: in the table above the asset appreciates 10% a year in all three scenarios. The only thing that changes is the exit TRM — and that alone turns a +33% into a −5%.

What does this mean for Circular Urban and its projects?

At Circular Urban, our projects are structured and valued in Colombian pesos. That has concrete implications in this context:

For the peso investor: entering today means doing so with a strong peso, at a moment when construction costs are under downward pressure and when real estate assets compete favorably against financial products whose rates are falling.

For the dollar investor: a lower TRM means their dollar capital "buys fewer pesos" today. The relevant question is not whether the dollar is cheap or expensive right now, but whether the asset's appreciation plus rental income offsets that difference — and whether you trust that the TRM will normalize over time.

For the market in general: the dollar's fall is a sign of confidence in the Colombian economy and of foreign capital inflows. Structurally, that is good news for the real estate sector.

What can we expect from here on?

Analysts have no consensus on whether the dollar will keep falling or recover. What is clear is that:

The Banco de la República's cycle of high rates is coming to an end, which will eventually reduce the incentive to bring dollars into Colombia
The external debt has already been issued; that effect is one-time, not permanent
The peso has never held indefinitely at levels of extreme revaluation

What Colombian history shows is that periods of a strong peso are windows, not permanent trends.

In summary

You have pesos and want to invest: Favorable — greater purchasing power, lower construction costs, falling rates.
You have dollars and want to invest in Colombia: Neutral-to-negative in the short term — fewer pesos per dollar; but upside potential if the TRM rises.
You receive remittances from abroad: Directly negative — the money you receive in pesos is smaller.
You already hold an investment in pesos: Neutral — your asset is worth the same in COP, but more in USD than a year ago.

The exchange rate is an important data point — but it is not the only one. The quality of the asset, its location, the income model, and the investment horizon matter more over the long term.

What is certain: understanding how the TRM affects your money is part of making better decisions. And that is exactly what we want to help you build.

Sources:

Published by

Jonathan Moncada

July 29, 2026

The dollar at a 7-year low: what does it mean for your real estate investments?