The real estate market in the Dominican Republic is still recovering from the 2008 global financial crisis, but prices for the most luxurious homes remain stable.
This tropical island nation was hit moderately by the real estate crisis – the market slowed down, and sales of the higher end homes started to fall off.
However, in some cases, luxury home prices in this tropical paradise have begun to rise. It appears that the market has hit bottom and it is now heading upwards. When it comes to luxury properties that are priced between $1-5 million, the prices are stable and often negotiable in a buyer’s market.
The growth of the residential property market is, in part, due to robust tourism growth and the arrival of many more boutique and luxury hotels. With a boost in tourists to this destination, many have fallen in love with the Dominican Republic and have wanted to buy homes and stay. Other reasons that have attracted investors including the gorgeous long sandy beaches, the warm temperatures and the reputation as a tax haven.
Dominican Republic Homes Offer Value for Money
Compared to other locations throughout the Caribbean, prices per square foot for luxury homes in the Dominican Republic are quite low. In fact, they are some of the lowest prices in the region. At the lower end of the luxury home market you can find property for around $100 per square foot, ranging up to $420 per square foot for a highly luxurious home in a prime waterfront location.
Although the highest price home in the Dominican Republic is around $25 million, most luxury listings are not often more than $5 million in the north and $9 million in the south. This is tempting for many foreign homebuyers, as they can find a property at a bargain compared to the rest of the Caribbean. Improving infrastructure and a stable government certainly, doesn’t hurt.
Also, foreign property buyers are often encouraged by the many financial incentives offered by the Dominican Republic. For example, foreign buyers receive a 50% exemption from property tax as well as a 50% exemption on taxes on mortgages. They are also exempt from payment of taxes for personal and household items, property transfers and vehicle taxes.
Americans and Canadians Seeking Out Property in Punta Cana
The Dominican Republic is a popular choice for second homes for many North Americans. This means that the performance of the property market here will always be tied to the economies of the USA and Canada.
Also, many of the homeowners within these luxury developments are Dominican. There has also been interest in recent years from Europeans and many buyers from Poland, The Netherlands, Italy, Germany, Switzerland and Spain have been interested in property on this gorgeous sunny island. Real estate developers have also seen an influx of Russians buying property in the Dominican Republic.
So what type of properties are these North American buyers seeking? They are looking for high end luxury, seeking out properties that are gated and have amenities such as utilities and security. They look for exclusive homes within closed communities with membership fees. Some of these foreign buyers are looking for a vacation home, while others are looking to invest for retirement.
One of the issues when buying Dominican Republic properties is that the country has a major power problem. Most luxury villas are located within property-managed gated communities which have access to their own backup generators – so that residents are not affected by power outages. They also seek out homes which have easy access to at least one of the three international airports in the Dominican Republic.
Punta Cana is one of the most popular destinations for North American investors. Also, other desirable spots include Cap Cana, Casa de Campo and Sosua. The areas of the country where most foreigners are investing in property are the North Coast, the Punta Cana Area and the Casa de Campo. There is a wide range of prices for homes, which is due to the fact that the location of the home is very important.
To find out more about the benefits of buying property in Punta Cana, Dominican Republic and to start your house hunting – contact us today!