17 forecasts for real estate in the Dominican Republic

Authored by the expert who managed and guided the team behind the Dominican Republic Property Pack

Everything you need to know before buying real estate is included in our The Dominican Republic Property Pack

Are you curious about the future trends shaping the real estate market in the Dominican Republic? Wondering which areas are poised for growth and investment opportunities? Eager to know how economic shifts might impact property values?

We will tell you everything. Here, no guesswork; we rely only on solid data.

Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Dominican Republic Property Pack

This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.

1) Bávaro will go up as the Dominican Republic's top residential investment hub, fueled by unstoppable tourism demand

Bávaro is quickly becoming the Dominican Republic's top spot for residential investment.

Thanks to its booming tourism industry, Bávaro is on the rise. In 2023, the Dominican Republic welcomed 10 million visitors, setting the stage for increased demand in this vibrant area. This influx of tourists has naturally led to a surge in property values, as more people look to invest in this tropical paradise.

With tourism thriving, Bávaro has seen a noticeable increase in property values. The area is experiencing gentrification, and new transport links are making it even more attractive. International investors are taking note, pouring money into real estate projects, which in turn boosts the local economy and pushes property prices even higher.

The Dominican government is also playing a key role in this growth. By offering tax incentives and subsidies, they are making it easier for foreign investors to enter the market. This supportive environment, combined with the area's strong economic performance and stable political climate, is drawing in potential homebuyers from around the world.

For those considering a property purchase, Bávaro offers a unique opportunity. The combination of consistent tourism-driven demand and government support makes it a promising investment hub. The area's appeal is only set to grow as more people discover its potential.

As Bávaro continues to develop, it is poised to become the Dominican Republic's top residential investment destination. The ongoing interest from international investors and the government's supportive policies are key factors driving this transformation.

Sources: TheLatinvestor, Travelweek, TheAgency-DR

2) Punta Cana short-term rental yields will soar with record-breaking international tourist influx

Rental yields for short-term vacation rentals in Punta Cana are set to rise as international tourists return in record numbers.

With over 8.5 million tourists visiting the Dominican Republic in 2022, it's clear that this Caribbean hotspot is booming. Punta Cana alone welcomed about half of these visitors, showing a strong demand for places to stay. This influx is not just filling up hotels; it's also boosting the vacation rental market.

In 2022, hotel occupancy rates averaged 77.3%, highlighting the need for more accommodations. This demand is spilling over into short-term rentals, making platforms like Airbnb even more popular. During peak seasons, these rentals are often fully booked, proving how lucrative this business can be in Punta Cana.

There's a clear link between the number of tourists and rental yields in Punta Cana. As more tourists arrive, rental yields tend to increase, with typical returns on investment ranging from 6% to 12% annually. This trend suggests that as the tourist numbers grow, so will the rental profits.

Investors are taking note of these trends, seeing Punta Cana as a prime spot for real estate opportunities. The combination of high tourist numbers and strong rental yields makes it an attractive market. Short-term rentals are becoming a go-to choice for both tourists and property investors.

With the Dominican Republic's popularity on the rise, Punta Cana is positioned to benefit significantly. The area's appeal to international visitors is undeniable, and this is reflected in the growing rental market. Investing in Punta Cana's vacation rentals could be a smart move as the tourism industry continues to thrive.

Sources: Live and Invest Overseas, The Agency DR

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3) Cabarete rental yields will go up, outshining coastal rivals as remote workers flock to affordable beachside living

Cabarete is quickly becoming a hotspot for remote workers seeking a beachside lifestyle.

With the rise of remote work, more people are choosing places like Cabarete for their ideal work-life balance. The town's charm lies in its affordability and vibrant lifestyle, making it a favorite among digital nomads.

Cabarete's property prices are significantly lower compared to other coastal areas, attracting both remote workers and savvy investors. This affordability is a key factor driving the area's popularity.

The rental market in Cabarete is thriving, with high occupancy rates fueled by its dual appeal as a tourist destination and a remote work haven. This trend is boosting the local economy and real estate market.

Investors are taking note of Cabarete's potential, as the demand for rental properties continues to rise. The town's unique blend of affordability and lifestyle is a winning combination for those looking to invest in real estate.

As more remote workers flock to Cabarete, the long-term rental yields are expected to outperform other coastal competitors, offering a promising opportunity for property buyers.

Sources: The Latinvestor, Explore City Life, Cabarete Real Estate

4) Beachfront condo prices in Las Terrenas will go up, drawing massive foreign investment and soaring by over 20% each year

Beachfront condos in Las Terrenas are becoming a hot spot for foreign investors, with prices expected to rise by at least 20% annually.

The Caribbean, especially the Dominican Republic, is seeing a boom in vacation property demand. This is largely due to a 10% annual increase in tourism from 2020 to 2023, making beachfront condos even more appealing. Plus, the Dominican government sweetens the deal with tax breaks under the CONFOTUR law, which reduces costs for foreign buyers and makes these properties a smart investment.

Getting to the Dominican Republic is easier than ever, thanks to a rise in international flights. This improved accessibility is a big plus for potential investors. Las Terrenas is also buzzing with new infrastructure projects, like beach clubs and other amenities, which not only enhance the lifestyle but also boost property values.

Las Terrenas is home to a growing expatriate community, drawn by the area's stable economy and great living conditions. This community fuels the demand for vacation properties, making the real estate market here stable and attractive for long-term investments.

Sources: Ocean Edge Real Estate, Blue Sail Realty

5) Las Terrenas will go up past other coastal areas in price growth

Las Terrenas is catching eyes for its affordability and lifestyle appeal, making it a top choice among coastal areas.

In 2023 and 2024, property prices in Las Terrenas have stabilized, with new constructions priced between $2,000 to $2,500 per square meter. This steady appreciation in property values is expected to continue, with property prices in the Dominican Republic projected to rise by 3% to 7% in 2025. This growth is fueled by strong tourism and foreign investment.

The area is seeing a surge in real estate transactions involving foreign buyers, especially from North America. With 40% of visitors from the USA and 15% from Canada, this foreign interest is a major driver of property price growth. The influx of foreign buyers has led to numerous new developments and projects to meet the growing demand.

Las Terrenas is also reaping the benefits of improved infrastructure and increased international flights, making it more accessible to foreign buyers. The El Catey International Airport has seen a rise in flights from the USA, Canada, Europe, and Russia, boosting the area's appeal.

Additionally, the development of new amenities and lifestyle facilities, such as electric car charging stations, is enhancing the quality of life for residents and attracting more investors. This blend of modern conveniences and natural beauty is a big draw for those looking to invest in property.

Sources: Ocean Edge Real Estate, The Latinvestor, Ocean Edge Real Estate

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6) Puerto Plata property prices will stagnate as buyers flock to booming tourist hotspots like Las Terrenas

Puerto Plata's property prices are expected to grow slowly, with a projected increase of just 3% to 7% by 2025.

This modest growth is due to the steady demand for vacation and retirement homes, which keeps prices from dropping but doesn't match the rapid development seen elsewhere. In contrast, Las Terrenas has become a real estate hotspot, thanks to a consistent annual tourism growth of 10% from 2020 to 2023.

During this time, property prices in Las Terrenas have appreciated by an average of 10% annually, significantly outpacing Puerto Plata. This boom is largely due to the government's investment in infrastructure, like new roads and airports, which makes the area more accessible and boosts property values.

Las Terrenas is also drawing in ultra-high-net-worth individuals and real estate groups, particularly those interested in luxury properties. The area's high-end amenities and services make it a more attractive option for buyers looking for something special.

The rise in luxury real estate and the influx of tourists are clear signs that buyer preferences are shifting towards newer tourist destinations like Las Terrenas. This trend is further supported by the area's appeal to affluent buyers and the ongoing development of upscale facilities.

As a result, Puerto Plata is likely to see slower price growth as buyers focus on these emerging hubs. The shift in interest is evident as Las Terrenas continues to capture the attention of both investors and tourists alike.

Sources: The Latinvestor, Ocean Edge Real Estate, The Latinvestor

7) Climate resilience projects will go up property values in flood-prone, low-lying coastal areas

The Dominican Republic is investing heavily in climate resilience infrastructure, especially in its low-lying coastal areas.

These efforts include building resilience centers and early warning systems, which are crucial for reducing flood risks. For instance, the "Building Climate-Resilient Communities in the Dominican Republic" project has laid out plans for a resilience center in Cristo Rey, Santo Domingo, to help nearby communities withstand natural disasters.

While we don't have specific data on property value increases in the Dominican Republic, it's well-known that resilience infrastructure boosts property values by improving living conditions and reducing flood risks. This trend is evident in other regions with similar projects, where such developments attract more buyers.

The Dominican government is also pushing initiatives like the Plan for an Economic Development Compatible with Climate Change and the National Climate Change Policy. These efforts aim to weave climate adaptation into national priorities, making properties in resilient areas more appealing to potential buyers.

Properties in areas with climate resilience projects might even enjoy lower insurance premiums due to reduced flood risks. Although specific data for the Dominican Republic isn't available, this benefit is commonly seen in other regions with similar initiatives.

Internationally, properties in flood-resilient areas, like those in the United States, often have higher property values because of reduced flood risks. This trend suggests that similar outcomes could be expected in the Dominican Republic as these projects progress.

Sources: Columbia World Projects, NDC Partnership, The White House

8) Puerto Plata's historic district will boom as infrastructure investments draw buyers to stunning colonial-style homes

Puerto Plata's historic district is becoming a hot spot for homebuyers thanks to new infrastructure investments.

The Dominican government is pouring RD$79 million into fixing sidewalks and curbs in the Historic Center, giving the area a fresh, inviting look. This facelift is making the district more appealing to those eyeing colonial-style homes.

Tourism is booming, with 1.7 million cruise passengers visiting Puerto Plata in 2023. This surge not only boosts the local economy but also sparks interest in the area as a prime spot for living or investing in property.

Getting around is easier now, thanks to improved transportation links like the new Amber highway. This makes the historic district more accessible, which in turn drives up demand for homes in the area.

The real estate market here is on the rise, with property values climbing as the area gains popularity. Expatriates and tourists are increasingly interested in vacation homes or investment properties, drawn by the charm of colonial-style homes and the upgraded infrastructure.

These homes are not just beautiful; they are now more practical investments due to the area's enhanced accessibility and appeal. Infrastructure improvements are key to attracting buyers to these historic properties.

Sources: Dominican Today, Simply Dominican, The Latinvestor

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9) Eco-sustainable housing will go up in demand, attracting foreign buyers and eco-conscious locals alike

Eco-sustainable housing is gaining traction in the Dominican Republic, and it's easy to see why.

The Central American Bank for Economic Integration has approved a hefty $250.3 million investment to build over 3,300 eco-friendly homes. These homes are designed with sustainable features like recyclable materials and clean water systems, making them attractive to both foreign buyers and eco-conscious locals.

Foreign investors are flocking to the Dominican Republic, drawn by its stable economy and enticing tax incentives. Reduced property taxes and exemptions from capital gains tax make it easier and more affordable to invest in eco-friendly properties. Plus, there's a growing demand for these homes, fueled by increased awareness of environmental issues.

The Dominican government is stepping up by offering incentives for sustainable construction practices. They're backing clean energy projects, which help cut down on fossil fuel use. This includes the integration of solar panels and wind turbines in new housing developments, aligning with the preferences of eco-conscious buyers.

Media coverage on environmental issues and global trends towards sustainable living are also boosting interest in eco-friendly housing. Builders are getting creative, using innovative techniques to minimize environmental impact, which resonates with buyers who care about the planet.

With all these factors in play, it's no wonder that eco-sustainable housing projects are seeing high demand among both foreign buyers and eco-conscious locals.

Sources: BCIE, Simply Dominican, The Latinvestor, Constructive Voices

10) Solar-powered homes will boom, transforming remote areas like the Samaná Peninsula into eco-friendly havens

Solar-powered residential developments are gaining momentum, especially in remote areas like the Samaná Peninsula.

With electricity costs rising in the Dominican Republic, many residents are turning to solar power to save money. Even though the 2023 residential electricity price was lower than the world average, the trend of exploring solar energy continued into 2024, making it a smart choice for cutting household expenses.

The Dominican government is backing renewable energy projects, which is a big deal. They've approved major projects like the Payita 2 photovoltaic park, showing their commitment to sustainable energy. This support is a driving force behind the growth of solar-powered communities.

Solar technology has come a long way, making it more accessible for homeowners. Solar panel prices have dropped, and their efficiency has improved, making solar energy a practical option for both homes and businesses. This progress is a key reason why solar power is catching on in remote areas.

In places like the Samaná Peninsula, solar power is not just a trend; it's becoming a necessity. The area's remote location makes traditional energy sources less reliable, so solar power offers a stable and sustainable alternative.

As more people in these areas embrace solar energy, the community benefits from reduced energy costs and a smaller carbon footprint. This shift is not just about saving money; it's about creating a more sustainable future for everyone.

Sources: Global Petrol Prices, ESS News, Solar Power Et Al

11) Santiago's small apartments will go up in demand as young professionals crave affordable, hassle-free living

Santiago is buzzing with young professionals drawn by the Dominican Republic's tech boom and educational advancements.

These tech-savvy individuals, often in fields like software development and digital marketing, are on the lookout for urban living options that fit their lifestyle. Santiago, with its vibrant city life, is becoming a top choice.

As tourism and infrastructure continue to grow, there's a noticeable uptick in the demand for affordable housing in urban areas. This shift is making small apartments in Santiago particularly appealing.

Globally, younger generations are leaning towards low-maintenance living. In Santiago, this means young professionals are likely to choose smaller, more manageable properties over larger homes.

For these young professionals, the priority is often on convenience and affordability, making compact apartments an attractive option. Santiago's real estate market is poised to meet this demand.

Sources: Noriega Group, Remofirst, Dominican Today

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12) Beachfront condos in Sosúa will go up in demand, offering short-term rental investors unbeatable ROI!

Beachfront condos in Sosúa are a hot ticket for short-term rental investors.

Thanks to the steady influx of tourists, these properties rarely sit empty, ensuring a constant flow of rental income. Sosúa's charm and vibrant beach scene keep drawing visitors, making it a reliable spot for those looking to invest in short-term rentals.

Over the past few years, the Dominican Republic has seen a surge in tourism, and Sosúa is no exception. This means a continuous stream of potential renters, which is music to the ears of any savvy investor.

Moreover, the rising property values in Sosúa's beachfront areas add another layer of appeal. As these values climb, investors not only enjoy rental income but also stand to gain from property appreciation over time.

Investing in Sosúa isn't just about the immediate returns. The long-term capital gains potential makes it an even more enticing prospect. With the area's popularity showing no signs of waning, it's a smart move for those eyeing both short-term and long-term benefits.

For those in the know, Sosúa's beachfront condos are a golden opportunity. The combination of high occupancy rates and increasing property values makes them a standout choice for investors seeking strong ROI.

Sources: Jedek Investments, Blue Sail Realty, Airbnb

13) Luxury villas in gated communities will go up in demand, especially in Punta Cana and Casa de Campo

Luxury villas in gated communities are all the rage in Punta Cana and Casa de Campo.

Why? Well, for starters, housing prices in Punta Cana have jumped—apartments by 7% and houses by 5% recently. This is thanks to a tourism boom and more foreign investment, making these luxury spots even more appealing.

Folks from the U.S. and Canada are snapping up properties, drawn by tempting tax breaks from the Dominican Republic's government. These incentives, like property tax exemptions, are making luxury real estate a hot ticket, pushing up property values.

Tourism is booming, and with it, the interest in vacation homes. Investors are buying up land for luxury hotels and boutique guest houses, while others are diving into the short-term rental market. This has led to high occupancy rates and solid returns for those in the luxury rental game.

In Punta Cana, the buzz is all about investing in luxury rentals. The short-term rental market is thriving, offering promising returns for savvy investors.

So, if you're eyeing a slice of paradise, know that luxury villas in these gated communities are in high demand, and the trend shows no signs of slowing down.

Sources: Simply Dominican, Noriega Group, The Agency DR

14) Tax incentives will go up foreign interest in coastal Dominican Republic real estate!

Tax incentives for foreign buyers are sparking interest in Dominican Republic's coastal properties.

In 2023 and 2024, the Dominican government rolled out a red carpet for real estate investors, offering a 50% discount on property tax. This move is part of a broader strategy to position the country as a top destination for real estate investments. The allure of these incentives is expected to keep international buyers coming.

Coastal hotspots like Punta Cana and Santo Domingo's Colonial Zone are seeing a boom, thanks to their stunning beaches and tropical climate. These natural attractions, paired with the enticing tax breaks, make these areas irresistible to foreign investors.

As tourism flourishes and foreign investments pour in, property prices in the Dominican Republic are on the rise. The demand for coastal properties, especially those with beachfront views, remains robust. This is largely due to the country's investment-friendly environment and the ongoing tax incentives.

Insider knowledge suggests that the Dominican Republic's real estate market is not just about the scenery. It's also about the strategic financial benefits that come with owning property here. The combination of natural beauty and fiscal advantages is a powerful draw for international buyers.

For those considering a purchase, the Dominican Republic offers a unique blend of lifestyle and investment potential. The government's commitment to maintaining these tax incentives ensures that interest in coastal properties will likely continue to grow.

Sources: Aparthotel, The Latinvestor, Samana Group

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15) Older, oversized homes in Santo Domingo will become obsolete as buyers flock to sleek, energy-efficient condos

In Santo Domingo, older, oversized homes are losing their charm as buyers lean towards modern, energy-efficient condos.

One big reason for this shift is the rising cost of energy. With energy prices climbing, people are keen on homes that help cut down on bills. Modern condos, often built with energy efficiency in mind, are becoming the go-to choice for many. This trend is not just about saving money; it's also about being part of a growing movement towards sustainability.

Environmental awareness is on the rise, and buyers want homes that match their eco-friendly values. In the Dominican Republic, sustainable construction projects are making waves by promising significant energy savings. While there aren't specific government incentives yet, the push for sustainability is strong, hinting at possible future support for energy-efficient buildings.

Modern amenities and technology are also high on the list for today's homebuyers. The Dominican Republic is boosting its tech infrastructure, with expanding fiber optic networks and tech hubs popping up. This has sparked interest in smart home technology, making condos with these features even more appealing. It's not just about having the latest gadgets; it's about living in a home that fits a modern lifestyle.

Maintaining older homes can be a costly affair. They often need more upkeep, which adds to their decreasing demand. In contrast, modern condos offer a hassle-free living experience, making them a more attractive option for many buyers. The convenience of low maintenance is a significant draw for those looking to invest in property.

As the market evolves, it's clear that the preference for modern, energy-efficient condos is reshaping the real estate landscape in Santo Domingo. This trend is driven by a mix of economic, environmental, and technological factors, all pointing towards a future where energy-efficient living is the norm.

Sources: Dominican Today, Dominican Today, The Business Year, Noriega Group

16) Furnished apartment rent demand will go up in tourist hotspots like Bávaro and Sosúa, boosting rental income dramatically

The Dominican Republic hit a major milestone in 2023, welcoming 10 million tourists.

With this surge, areas like Bávaro and Sosúa are buzzing with visitors, making them hot spots for real estate. In 2024, property values in these regions climbed, and the demand for rentals shot up. Bávaro, in particular, saw high hotel occupancy rates, showing that tourists love the lively atmosphere.

Tourists are increasingly choosing furnished apartments over traditional hotels. Platforms like Airbnb highlight that in Bávaro and Sosúa, visitors prefer these rentals for their convenience and amenities. This trend reflects a shift towards more personalized and comfortable stays.

Investors are taking note, as the demand for furnished apartments is expected to rise. The appeal lies in the prime locations and modern comforts these rentals offer, catering to the evolving preferences of travelers.

In Bávaro and Sosúa, the rental market is poised for growth. The influx of tourists seeking unique experiences is driving up rental income potential for property owners.

As tourism continues to thrive, the real estate landscape in these areas is set to benefit. The combination of high visitor numbers and changing accommodation preferences makes investing in furnished apartments a promising opportunity.

Sources: Travel Week, Noriega Group, Airbnb

17) Santo Domingo's central apartment rents will go up by 15% as urban professionals demand top-notch housing

Santo Domingo's urban housing demand is booming, fueled by a vibrant tourism scene.

Tourists aren't just visiting; they're investing in vacation homes, which is now influencing the residential market. This trend is particularly evident in the city center, where high-quality rental properties are in high demand.

Young professionals are flocking to Santo Domingo, drawn by its lively social life and modern amenities. These urbanites are looking for better housing, and their presence is expected to push rental prices up as they seek out central locations.

There's a real shortage of top-notch rentals in the heart of the city. This scarcity means that landlords have the upper hand and are likely to raise rents due to the limited supply.

With more professionals moving in, the demand for quality housing is only going to grow. This influx is creating a competitive market where rent prices are set to climb as people vie for the best spots.

As the city continues to attract a dynamic crowd, the rental market is poised for change. Central apartments are expected to see a 15% rent increase as urban professionals demand better living conditions.

Sources: TheLatinvestor, Noriega Group, Sunlife