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What will happen in the Dominican Republic’s real estate market? Will prices go up or down? Is Punta Cana still a hotspot for foreign investors? How is the Dominican government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in the Dominican Republic, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Bávaro will lead as the Dominican Republic’s top residential investment spot because of steady tourism demand
Bávaro is quickly becoming the Dominican Republic's top spot for residential investment, thanks to its thriving tourism scene.
In 2023, the Dominican Republic welcomed 10 million tourists, setting a new record and sparking a surge in property interest in Bávaro. This influx of visitors has made the area a hotbed for real estate, with many seeing it as a golden opportunity to invest. The buzz around Bávaro isn't just about the numbers; it's about the lifestyle and the promise of a vibrant community.
By 2024, property values in Bávaro had skyrocketed, fueled by gentrification and improved transport links. The area has become more accessible, making it even more appealing to potential buyers. International investors have taken notice, pouring money into local projects, which in turn has boosted the local economy and created new jobs. This influx of investment is transforming Bávaro into a bustling hub of activity.
The Dominican government has sweetened the deal by offering incentives for foreign real estate investment. These incentives make it easier and more attractive for investors to put their money into Bávaro, further driving the area's growth. The combination of government support and a steady stream of tourists has positioned Bávaro as a prime location for residential investment.
What makes Bávaro stand out is its consistent tourism-driven demand. The area's natural beauty, combined with its growing infrastructure, makes it a magnet for both tourists and investors. This demand is not just a passing trend; it's a sign of Bávaro's potential to become a leading residential hub in the Dominican Republic.
For those looking to invest in a property that promises both lifestyle and financial returns, Bávaro is the place to watch. With its booming tourism industry and strategic government incentives, the area is set to become the Dominican Republic's top residential investment destination.
Sources: Travelweek, TheAgency-DR
2) Rental yields in Punta Cana will increase as more international tourists return
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
We made this infographic to show you how property prices in the Dominican Republic compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Beachfront condo prices in Las Terrenas will rise by 20% yearly as foreign investment grows
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
4) Las Terrenas property prices will rise faster than other coastal areas due to affordability, lifestyle appeal, and foreign interest
Las Terrenas is quickly becoming a top spot for real estate investment due to its affordability, lifestyle appeal, and growing foreign interest.
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 indicates a steady appreciation in property values, and experts expect this trend to continue. The Dominican Republic's property prices are projected to rise by 3% to 7% in 2025, 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 demand is driving new developments. Expatriates in Las Terrenas report high satisfaction rates, drawn by the town's charm, modern conveniences, and vibrant social scene, which boosts the area's appeal and property values.
Las Terrenas is also becoming more accessible, thanks to the El Catey International Airport increasing flights from the USA, Canada, Europe, and Russia. Improved infrastructure, like new roads and public services, is enhancing property values in previously underdeveloped areas. The town's affordability compared to other coastal areas, with beachfront condos priced around $200,000 and luxury villas around $500,000, makes it an attractive option for those seeking affordable luxury properties.
Sources: Ocean Edge Real Estate, Ocean Edge Real Estate, International Living
5) Property prices in Puerto Plata will grow slowly as buyers turn to newer tourist spots like Las Terrenas
Properties in Puerto Plata are seeing slow price growth as buyers look elsewhere.
While prices were expected to rise by 3% to 7% in 2025, this increase is modest compared to other areas. The demand for vacation homes and retirement properties is strong, which keeps prices from dropping significantly. However, it doesn't match the rapid development seen in other parts of the Dominican Republic.
Las Terrenas, on the other hand, is experiencing a real estate boom. From 2020 to 2023, property prices there have appreciated by an average of 10% annually. This surge is tied to the Dominican Republic's consistent tourism growth, which has also been around 10% each year. The area is attracting ultra-high-net-worth individuals and real estate groups, especially those interested in luxury properties.
Tourist arrivals in Las Terrenas have increased, largely due to North American visitors. The government has invested significantly in infrastructure, making the area more accessible. New roads and airports have made it easier for investors to reach Las Terrenas, adding to its appeal. The Arpels group's investment in the Donoma Las Terrenas Hotel Beach & Spa, opening in March 2025, is expected to further boost the region's tourism and economic development.
Las Terrenas is becoming a hotspot for luxury real estate, with stable prices despite a slight decrease in older buildings. The area's appeal is growing, thanks to its improved infrastructure and the influx of high-net-worth individuals. This trend is likely to continue as more investors recognize the potential of this vibrant region.
In contrast, Puerto Plata's slower growth is partly due to its established market, which lacks the same level of new development and investment. Buyers are increasingly drawn to newer tourist hubs like Las Terrenas, where the potential for growth and return on investment is higher.
Sources: Ocean Edge Real Estate, Dominican Today
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6) Property values in low-lying coastal areas will rise as climate resilience projects improve flood protection
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
7) Buyers will be drawn to renovated colonial homes in Puerto Plata’s historic district due to infrastructure investments
Infrastructure upgrades in Puerto Plata's historic district are making it a hot spot for those eyeing renovated colonial homes.
The Dominican government is pouring money into the area, with RD$79 million allocated for sidewalk and curb repairs in the Historic Center. This facelift is not just about aesthetics; it’s about making the area more inviting for potential homebuyers. Imagine strolling down charming streets with well-maintained paths—it's a game-changer for anyone considering a move.
Tourism is another big player here. In 2023, Puerto Plata saw 1.7 million cruise passengers come through, and by 2024, the Dominican Republic welcomed 8.3 million visitors. This tourist boom is a double win: it boosts the local economy and makes the area more appealing for property investment. Who wouldn’t want to live where others vacation?
Getting around has never been easier, thanks to the new Amber highway. This improved transportation link makes the historic district more accessible, which is a huge plus for buyers who value convenience. Whether you're commuting or just exploring, easy access is a major draw.
The real estate market in Puerto Plata is on the rise. With the area's growing popularity and economic upswing, property values are climbing. This trend is catching the eye of savvy investors looking to capitalize on the area's potential.
All these factors—government investment, tourism growth, better transport, and rising property values—are turning Puerto Plata into a prime spot for buying a colonial-style home. The district's charm, combined with modern conveniences, makes it irresistible.
Sources: Dominican Today, Simply Dominican, Trade Commissioner Service
8) Demand for eco-sustainable housing will rise among foreign buyers and eco-conscious locals
Eco-sustainable housing is booming in the Dominican Republic, and it's not slowing down anytime soon.
In 2023 and 2024, the Central American Bank for Economic Integration approved a hefty $250.3 million investment to build over 3,300 eco-friendly homes. These homes are designed with features like recyclable materials and clean water systems, making them a hit with both foreign buyers and locals who care about the environment.
Foreign investors are flocking to the Dominican Republic, thanks to its stable economy and enticing tax incentives. Reduced property taxes and exemptions from capital gains tax make it easier and cheaper for foreigners to dive into eco-friendly real estate. This financial allure, paired with a growing global focus on environmental issues, is driving up demand for sustainable housing.
People's tastes are changing, with more folks leaning towards eco-friendly homes as they realize the environmental toll of traditional housing. Villas with solar panels and rainwater systems are becoming more popular, mirroring a larger shift towards sustainable living. The Dominican government is also on board, rolling out incentives to back clean energy projects and push sustainable building practices.
Eco-sustainable housing projects are not just a trend; they're a smart investment. With the Dominican Republic's commitment to green initiatives and the financial perks for investors, it's no wonder these homes are in high demand. Both foreign buyers and eco-conscious locals are eager to invest in properties that align with their values and offer long-term benefits.
Sources: BCIE, Simply Dominican, Constructive Voices
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the Dominican Republic. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Demand for solar-powered homes will grow, especially in remote areas like the Samaná Peninsula
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
10) Demand for small apartments in Santiago will rise as young professionals look for affordable, low-maintenance homes
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
11) Beachfront condos in Sosúa will stay popular with short-term rental investors looking for high returns
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
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12) Luxury villas in gated communities will stay in high demand, particularly 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
13) Interest in coastal homes will grow as tax incentives attract foreign buyers
Tax incentives for foreign buyers are drawing significant interest in Dominican Republic's coastal properties.
In 2023 and 2024, the Dominican government has been actively promoting the country as a top spot for real estate investments. They're offering enticing tax breaks, like a 50% discount on property tax, which is a big draw for international buyers. This strategy is expected to keep the interest alive and kicking.
Coastal areas such as Punta Cana and Santo Domingo's Colonial Zone are seeing a boom in the real estate market. The stunning beaches and tropical climate are natural magnets, and when you add in the tax perks, it's no wonder these spots are hot with foreign investors.
Foreign property ownership in the Dominican Republic is on the rise, and the best part? There are no restrictions on foreign ownership. This open-door policy, along with the country's welcoming investment climate, is fueling the trend.
Expect this upward trajectory to continue, as the government remains committed to supporting these tax incentives. The combination of beautiful landscapes and financial benefits makes the Dominican Republic a compelling choice for property buyers.
With ongoing government backing, the investment-friendly atmosphere is set to persist, ensuring that the Dominican Republic remains a prime destination for those looking to invest in coastal real estate.
Sources: Aparthotel, Samana Group
14) Demand for older, oversized homes in Santo Domingo will drop as buyers choose modern, 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
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the Dominican Republic versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
15) Demand for furnished rentals in Bávaro and Sosúa will rise, boosting rental income
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
16) Rent prices for central apartments in Santo Domingo will rise 15% as urban professionals seek better housing
Santo Domingo is buzzing with a surge in urban housing demand.
Tourism is booming, and it's not just vacationers who want a piece of the action. This influx is spilling over into the residential market, especially for high-quality rental properties in the city center. Young professionals are flocking to these vibrant areas, drawn by the lively social scene and modern amenities. As they seek better housing, rental prices are expected to climb.
Urbanization is on the rise, with many people moving to Santo Domingo for better job opportunities and a dynamic lifestyle. This migration is adding pressure to the housing market. The city center is particularly attractive due to new business developments and infrastructure improvements, which are pulling in even more professionals.
There's a catch, though. High-quality rental properties are in short supply in central Santo Domingo. This scarcity is driving up demand for the available units. Landlords are likely to take advantage of this limited supply by hiking up rent prices.
With the city center becoming a hotspot for professionals, the demand for housing is only going to increase. This trend is set to continue as more people are drawn to the area for its opportunities and lifestyle. The combination of a growing professional population and limited housing options is a recipe for rising rents.
Sources: Dominican Today, Noriega Group, Sunlife
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.
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