This study examined how risk tolerance moderates the mediating effect of investor risk perception on the relationship between perceived asset value and real estate investment decisions in Iraq. Survey data were collected from 205 investors across seven priority governorates. Results indicated that perceived asset value positively influences real estate investment decisions, both directly (β = 0.250, t = 3.410, p = 0.001) and indirectly through risk perception (β = 0.126, t = 3.171, p = 0.002). However, risk tolerance did not moderate the direct relationship between perceived asset value and investment decisions (β = 0.149, t = 1.449, p = 0.148). Interestingly, risk tolerance negatively moderated the relationship between risk perception and investment decisions (β = -0.356, t = 3.264, p = 0.001), suggesting that the negative effect of risk perception diminishes as risk tolerance increases. These findings suggest that while risk tolerance does not directly influence the effect of perceived asset value on investment decisions, it plays a crucial role in how investors’ risk perception affects their investment choices. Investors’ risk tolerance shapes how their risk perceptions translate into actual investment choices, even when asset values are favourable. Policymakers and practitioners should consider these behavioural factors when promoting real estate investment in Iraq.