DR Real Estate Market

I have watched the real estate market there and see a surge in new construction prices.  I've also talked to agents who say the same thing.  Driving prices are both demand and increased materials costs.  My focus has been on primarily Santo Domingo in high rise apartments.  I had a pre-construction contract there I cancelled for a variety of reasons which makes for a complex story. I'd appreciate any and all comments here but to get started but I'll start with an apartment that was at a complex in SD near the government district area in a division called Evaristo Morales. Original contract price was 121.5 in March 2021. Increased materials cost put it at 140k. It was 2 bedroom, 1.5 baths on a 7th floor.   I terminated contract in March 2022. Now I'm seeing much increased prices but a conscientious real estate pro their said he thought prices will go down.  Any insights are very much welcomed and appreciated.  Thank you
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Have you ever seen prices go down?  Not likely in my opinion...  Construction just seems to be getting busier.
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@DominicanadaMike

Yes I've seen prices go down when bubbles burst.  Real Estate prices in much of the western world dropped 40%.  I'm not suggesting that's happening in DR, but there are signs of overbuilding in SD. Combine that with Increased material costs which have a supply side component and you have the ingredients for a bubble in prices there.
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Construction costs are set to continue rising specifically due to increases in labour costs both by the recent pay rise and the regularization of Haitian workers with work permits and labour law rights. Materials arent going down anytime soon but rather will continue to increase affected by high energy costs which feed into manufacturing and transport.

Building in Santo Domingo just seems to continue and there remains a housing shortage nationally with a growing young population.

Personally as an expat in Santo Domingo renting is imo the safe option so you can exit if it gets over bearing. If you really want to buy real estate, invest in upcoming resort areas is my suggestion.

Central Santo Domingo is gridlock maybe 5 hours a day, and personally I would recommend away from the commercial centre and especially zones with excess population density through tall apartment blocks.
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Not to mention the DR is long overdue for an increase in prices in the real estate market.
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I think prices are going to drop in Las Terrenas - maybe not back to pre-pandemic levels, but enough to notice.! I think the supply here is going to quickly exceed the demand. I know of quite a few people who made pretty quick decisions to invest here and put deposits down on planned developments, only to cancel their contracts even it if meant losing the deposit.

My biggest concern is that there will likely be a ton of projects starting that never finish, leaving the concrete carcasses to blemish the natural beauty here. Or that all these will be built without any upgrades to the infrastructure here in town!

Right now, there is a planned development just to the east of LT that looks like some kind of Disney-planned community! None of the reputable local real estate agents will sell there, because they know it will likely never come to fruition. They were originally saying they would have 2000 apartments, 31 villas on "private islands" within "the world's largest pool" (each island would be shaped like one of the 31 Dominican provinces), retail, self-sustaining solar farm, and an amphitheater that seats 1500. Within just a couple of months, they've dialed down the expectations. There are now only 1800 apartments planned, and the private islands will all be shaped like the developments logo, which is basically round. Everyone we've spoken to who is even somewhat in the know has said that the permits have not been issued for construction. I have a feeling this may never get off the ground and a lot of people are going to lose some serious money! Some friends, who have now walked away from a $5k deposit, were told that their apartment would be ready by November 2024, but that the developer actually had an additional 8 months to deliver it (July 2025) yet all but 10% of the purchase price was to be paid within the first 9 months.
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@lennoxnev Good points I don't disagree about many things you said but consider this; energy prices will plummet in two-three years (2024 elections will have consequences and US oil production will increase dramatically).

Also building in the USA is starting to decline and there's a general recessionary wind blowing through world economies.

Instability in geopolitics are interesting also but I haven't a clue how that fits into this DR equation.

The DR is marginally subject to this but not on the supply side.

As per population growth, I've read that population growth there is less than 1% annually...did I get misinformation there?

The advertised unemployment rate there is less than 6% but I have a very difficult time believing that statistic as I think it's much higher, so while the government is fixing employment costs (most likely a poor decision), I wouldn't think labor shortages are a problem but that's my opinion with admittedly casual and limited observation.
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@ddmcghee I see properties sitting on the market for a long time in certain areas. I've only made casual observations but I do see it.

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@rlwoodz

Hello

I don't think we have enough info.  Are prices going up or down?   If you do not speculate, and you need a place to live and you can afford to pay the cost of living there, then it does not matter.

The builder must be reputable, the materials above standard, and the location must be where you want to live and work because traffic is hell.  The advantage is simply the variety of what you get there (restaurants, shopping and entertainment), but the real beauty of this country is not in the Capital City of concrete jungle, noise and danger.

This sounds like a good price to me for a 7th floor 2 bedroom in a nice area that you will eventually own. Lets pretend you can borrow the entire amount of $140,000 for 5% and that you want to pay it off in 15 years. This is $1100 per month.   I am in a 1 bedroom on the 3rd floor (in Punta Cana) renting for $800 per month.  And its not new and there needs to be some maintenance done here.  But I dont pay any other fees, there is security and a pool and parking included.

You still have other expenses to consider like monthly condo fees.  I dont like condos because these fees are not in your control and they can increase your monthly expenses significantly.   But it seems you already know all this. 
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@Karin1 yes I was worried about this and only told they were $200 per month but I never felt comfortable.

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@Karin1 what Lennox said about renting is good in the short term

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@rlwoodz, you have visited Santo Domingo but not lived there a long time. You may discover after a few months that it is not for you and time to relocate elsewhere but will be burdened with real estate you cant move quickly. Viewing an apartment and living there 24/7 are not the same. You discover the detail when you live there. The neighbours, the noise, the management set up etc.

Santo Domingo is not imo a good place to retire. Far from it. DR offers so many living options and some are not so good and some very good but it takes time to find and test the best for you.

The advice that gets repeated here is rent rent rent at first until you have confidence to make the big move.

Why burden your mind now as you make your move here? That alone is a challenge.
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Unemployment 6%?  That is really bad info.  It's much much higher.  In young men 20 to about 34 it's over 24%!

Santo Domingo is a giant traffic jam.  Santo Domingo east has the fastest population growth in the entire country!  Construction is booming regardless of the material costs, which I believe will drop somewhat.  Real estate is unlikely to drop dramatically in value.

I am with Lennox, I rent here.
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@lennoxnev yes I get it. I have been there enough to know the noise, traffic, etc.  Total time spent there about 2 months with a 1 month stint being the longest.

I have visited Santiago and it was more laid back with less crazy traffic although not devoid of that mess.

And I totally agree at this point renting is the best option.  Buying has several risk elements that is best to avoid on balance.  Increasing prices being my number one concern.



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@planner over here in Puerto plata I think the unemployment is even higher because most of the population here we're working in the hotel hospitality business  and that business is a long way from
coming back  , especially with inflation rates going up , and Discretionary spending cooling , I would
bet that they are not building new construction for the 30 year olds , and you might see a dip in the price on the construction pricing , but there are still way to many variables to consider before buying right now

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@Tippj  maybe not.  Remember  that  there is a new cruise ship terminal and lots of  direct and indirect jobs in Puerto Plata. I know real estate rentals there have jumped considerably.

It seems they never build here for 30 year olds here. Generally they have no money!

Better to look at  middle and upper class housing for clues I think. There is a growing middle class here that needs to be accommodated. If you look at  Santo Domingo East that is all middle class market.
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Construction does seem to be booming in the Puerto Plata to Cabarete area. As planner stated, most seems to be in the upscale range with new housing developments in the hills, new shopping plazas and the announcement of a hotel/shopping/ residential development in the Playa Bergantín area. However I'm also seeing new roads being made in the Montellano area presumably for new lower cost housing. 

The new Cruise port and proposed hotel construction in Playa Dorada and Cabarete seems to be spurring additional investment as well, and I'm told real estate is very active.

Being this is the DR, investment seems to often outrun funding, so only time will tell what projects will be completed. 
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It is commonly stated that laundering of money from drugs and corruption have been factors in the apartment construction boom.

With a determined crackdown on both by this new government, I wonder if there will be a shift to lower cost housing as is happening in Santo Domingo and public works.

Another driver is very high profit margins for developers in tourist zones and that is unlikely to change but prices will move upwards due to inflationary factors and so maintain those tasty margins. DR is in a global market and prices are rising elsewhere in the Caribbean in the tourism and retirement sector too, so being at a lower level in DR they can adjust upwards without losing buyers.

Infrastructure investment is sorely needed in places like NC and LT so that will probably happen as tourism booms and prrsents opportunities to businessmen.

Self build will become increasigly attractive cutting out all those middlemen who can double the sf cost. But self build is more challenging especially if not here full time.
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You can build your own small home from anywhere from $ 70-100 grand  not including the land …. But you have to be here and watch and question as they progress ….. I bought an old home and every time I would have something done when I wasn't here it came out just ok compared to being here and correcting the work as it progressed….. my home is 10-15 min from the new port where a ship has been grounded for the last 2-3 months …. Something else that needs to be addressed … but you are seeing more and more traffic in the area every day I'm here and I usually get 4-5 people stopping every day asking to rent the 2 apartments that came w/the house ( not for rent )so it's true that rents must be goin up because the people are desperate
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Any insights as to how the real estate market is going, specifically in Las Terrenas?  Not sure how correlated things are but here in Canada prices are down about 20-25% in some places and houses are not selling nearly as fast as they were just a few months ago.
We were thinking of purchasing in LT, but recent events here in Canada are giving us second thoughts.
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I can feel things have slow down a lot in Punta Cana as well.

If I was looking to buy a property right now... i would be extremely patient, price will come down with demand going down.

It's not necessarily correlating with us/cad market but it's still a good indicator.
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In LT, it likely depends on what you are looking for. There are a bunch of developments (including two mega-developments) that are planned or have just broken ground, with delivery in 2024 or later. If you're looking for something existing, you might see that the competition from the new developments is driving down the prices. Personally, I think the supply here in LT is going to far surpass the long-term demand.
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@ddmcghee I agree. I don't think the mega development, The Reef, is close to breaking ground. No permits and agressive advertising is a bad mix. Have you heard anything recently on this?

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@ddmcghee so far the supply on the mega developments has already been absorbed by the international market, I am involved with one of the large projects and we came to market at the end of  January, we were over 70% sold under 27 days. Let's see how others coming to the market continue to hold or convert.

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@Aurin Disla I import building materials....would love to speak

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@rlwoodz

I would highly suggest you consider looking in las Galeras...the DR gov is spending alot of money there

but if you are looking for traffic , noise, and lots of people this is not the place
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@ddmcghee

I agree and if they dont fix the sewer problem,,,the town will lose their beaches
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I to think they are over building , but I have noticed that a lot of projects have had slowed  , not sure because of demand or supply chain problem's…. Be I do know that the US Fed raising interest rates is going to take its toll , yes I would be a little Leary about buying in the present market and wouldn't entertain the idea till the end of the year and see where the dust settles from the rate hikes
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@ddmcghee.
I think your assessment is spot on. I met an "old-money" gentleman whose extended family owns some small hotels and rental apartments in LT. 

By his own words, "we no longer vacation in Las Terrenas due to the crowds and traffic.  We keep the properties, of course, they make us a lot of money. But we no longer like to vacation there."

I've explained in previous posts our shock at how crowded and noisy LT Centro has become. 

We found some beautiful locations on or East of Playa Popi.. but then we learned about all of the major resorts coming in there.  Those roads will soon (4-6 years) become just as overwhelmed as LT Centro. 

And we lost count of all the condos and apartments that were in various stages of construction. 

As we were descending down the main highway into LT, I fully expected we were going to buy there. 

In the space of 4 days, a dozen properties toured -- and a lot of stifling traffic, especially in Centro -- , we boomeranged a full 180 degrees.  No way we're buying into LT, at least not at these prices. 

I have to believe there's a lot of other visitors coming to the same conclusion as we did. 

Don't get me wrong -- with enough money invested, you can buy a wonderful lifestyle in LT, away from the noise and congestion. 
But at the more modest investment levels we're constrained to -- say, $230k or so -- your property will.include traffic and noise.
>> If not right now, then within a few years.   
>> That's just the way LT is these days. 

For those that have or will choose LT -- I wish you only the best.  I pray LT's government will quickly resolve the traffic issues, and that alone should help reduce the noise. 

May the crowds always be thin while you're in LT.  But I wouldn't bet on it.
Jim
ExpatRusher
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@lovethedr  where in Canada are prices 20 to 30% down

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Lets stick to discussion of DR please. Thanks
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again someone explain how RENT in NY is relevant here? How  purchase prices going up in NY is relevant here?

this is the DR and  not NY,  not Canada and not Europe.
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Everyone knows that the DR gets the trickle down effects from North America … so if it slowing down there  , it will start to slow here in the coming months , but I'm sure most readers are watching what's happening to gauge there Future prospects here
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We can go ahead and make generalities without  specific discussions about  markets.

we are far more effected by tourism and the economy in general.
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Yes and if people are paying more for rents and mortgages they'll have less money to spend being a tourist  and won't be spending their money as freely and that will effect the economy….
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Not allowing that.  Stay on topic please.  Otherwise I can connect everything in the world to us.   
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This thread is about real estate, and personally I do not think the middle and upper end sectors will be effected as people look to buy their home away from home and put their money into something solid during what have been and continue to be very difficult times This is what continues to happen throughout the Caribbean as real estate is increasingly seen as a hedge against inflation and hospitality projects continue to come online.

This forum is a barometer, albeit a small one, of people steadily wanting to invest in DR come covid19, war and inflation.

I do think the lower end of the market could suffer, and in terms of tourism DR is well positioned to pick up tourists who have been travelling elsewhere who chose to spend less in tougher times and tighten their belts because it offers some of the lowest tourism packages in the region. DR so far has performed better than many economies in the Americas despite all the economic headwinds thrown at it.
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This thread is about real estate, and personally I do not think the middle and upper end sectors will be effected as people look to buy their home away from home and put their money into something solid during what have been and continue to be very difficult times This is what continues to happen throughout the Caribbean as real estate is increasingly seen as a hedge against inflation and hospitality projects continue to come online.

This forum is a barometer, albeit a small one, of people steadily wanting to invest in DR come covid19, war and inflation.

I do think the lower end of the market could suffer, and in terms of tourism DR is well positioned to pick up tourists who have been travelling elsewhere who chose to spend less in tougher times and tighten their belts because it offers some of the lowest tourism packages in the region. DR so far has performed better than many economies in the Americas despite all the economic headwinds thrown at it.
- @lennoxnev
While I agree in part, a lot of people seem to buy here for investment purposes with the hopes of Airbnb/VRBO income to offset their costs. If inflation and flight costs continue to make people rethink vacation plans, people that have bought for investment purposes may feel the squeeze.
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This thread is about real estate, and personally I do not think the middle and upper end sectors will be effected as people look to buy their home away from home and put their money into something solid during what have been and continue to be very difficult times This is what continues to happen throughout the Caribbean as real estate is increasingly seen as a hedge against inflation and hospitality projects continue to come online.

This forum is a barometer, albeit a small one, of people steadily wanting to invest in DR come covid19, war and inflation.

I do think the lower end of the market could suffer, and in terms of tourism DR is well positioned to pick up tourists who have been travelling elsewhere who chose to spend less in tougher times and tighten their belts because it offers some of the lowest tourism packages in the region. DR so far has performed better than many economies in the Americas despite all the economic headwinds thrown at it.
- @lennoxnev
While I agree in part, a lot of people seem to buy here for investment purposes with the hopes of Airbnb/VRBO income to offset their costs. If inflation and flight costs continue to make people rethink vacation plans, people that have bought for investment purposes may feel the squeeze.
- @AlaPlaya
         Yes I think they will feel the squeeze 
       The tourists that are here now booked their trip when the pandemic was coming to an end , why before the fed raise their rates and before gas was at $5 a gallon , let's see what happens in the 4th & 1 st quarters and the we can talk about how healthy the economy is for all the investors…..
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Tourism has increased whether you want to credit covid relief, more people from other tourist areas(Mexico) and many people from Venezuela, Columbia, and Europe visiting. Flights to DR have been very expensive and have not come down for slow season.
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