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House prices in the Dominican Republic are unlikely to go down in the near term. Property values have surged 60% over the past five years and continue rising at 10-11% annually as of September 2025, driven by robust foreign investment, booming tourism, and limited supply in coastal areas.
The Dominican Republic's residential market shows strong momentum with foreign buyers accounting for 40% of luxury transactions, tourism exceeding 12 million visitors in 2025, and government tax incentives attracting international investors. While construction costs have risen 5.3% year-over-year, new supply still lags demand in sought-after regions.
If you want to go deeper, you can check our pack of documents related to the real estate market in the Dominican Republic, based on reliable facts and data, not opinions or rumors.
The Dominican Republic housing market remains bullish with prices rising 10-11% annually and strong foreign demand driving coastal property values higher.
Limited inventory in tourist hotspots, robust tourism growth, and favorable government policies support continued price appreciation through 2026.
| Market Indicator | Current Status (September 2025) | Trend |
|---|---|---|
| House Price Growth (Annual) | 11.6% year-over-year | Rising |
| Apartment Price Growth (Annual) | 10.7% year-over-year | Rising |
| Foreign Investment Share | 40% of luxury transactions | Strong |
| Tourism Visitors | 12+ million expected in 2025 | Growing |
| Mortgage Interest Rates | 12.12% (June 2025) | Stable |
| Rental Yields | 6.7-7.5% nationwide | Stable |
| GDP Growth | 4% projected for 2025 | Positive |
What have house prices in the Dominican Republic done over the past five years?
House prices in the Dominican Republic have experienced substantial growth over the past five years, rising nominally by approximately 60% from 2019 to 2025.
When adjusted for inflation, Dominican Republic residential property values have still increased by a solid 42% during this period. This represents strong real appreciation in property values across the country.
The growth has been particularly pronounced in premium locations and tourist areas where annual appreciation rates commonly reach 8-10%. Coastal properties in destinations like Punta Cana, Bávaro, and Las Terrenas have seen even stronger price momentum.
Looking at the broader 10-year picture, nominal house price growth exceeds 120%, making the Dominican Republic one of the strongest performing real estate markets in the Caribbean region.
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What are the latest year-over-year and month-over-month changes in average house prices?
As of September 2025, the Dominican Republic housing market continues to show robust price appreciation with houses rising 11.6% year-over-year and apartments increasing 10.7%.
The latest quarterly data from Q1 2025 showed a real price increase of 2.32% from the previous quarter, indicating sustained momentum in property values.
Market forecasts predict further price rises of 7-12% by the end of 2025, suggesting the current upward trend will continue through the remainder of the year.
When adjusted for inflation, real house price increases have been 7.5% year-over-year for houses and 6.6% for apartments, demonstrating genuine value appreciation beyond general price inflation.
This consistent price growth reflects strong underlying demand fundamentals and limited supply in many sought-after areas across the Dominican Republic.
How much new housing construction is currently underway, and how does that compare to demand?
Construction activity in the Dominican Republic remains robust, with the sector projected to grow 3.9% in 2025 and average 4.3% annual growth through 2029.
However, construction costs have risen 5.3% year-over-year as of May 2025, which is slowing the pace of new supply delivery and contributing to upward pressure on property prices.
New construction is particularly active in resort and tourist zones, but the pace of new supply still lags behind demand in many coastal and sought-after regions.
This supply-demand imbalance is especially pronounced in premium beachfront locations where land availability is limited and development regulations are stricter.
The combination of rising construction costs and strong demand continues to support property price appreciation across the Dominican Republic market.
What are the current mortgage interest rates, and are they expected to rise or fall?
Mortgage interest rates in the Dominican Republic averaged 12.12% as of June 2025, representing a slight easing from the 12.5% rates seen in late 2024.
| Loan Type | Interest Rate | Terms |
|---|---|---|
| Standard Local Mortgage | 12.12% | Standard terms |
| Foreign Buyer Special (Initial) | 7.25-8.0% | First 1-5 years, then adjusts |
| Foreign Buyer Special (After Adjustment) | Higher rate | Requires larger down payment |
| Commercial Property Loans | Variable | Case-by-case basis |
| Tourism Zone Properties | Preferential rates | Special government incentives |
Select banks offer promotional rates for foreign buyers with fixed rates as low as 7.25-8% for the initial 1-5 year period, though these adjust to higher rates afterward and typically require larger down payments.
Rate expectations for the remainder of 2025 suggest stability unless global economic pressures emerge, making current financing conditions relatively predictable for property buyers.
How affordable is housing right now compared to average household income levels?
Housing affordability in the Dominican Republic presents significant challenges for local buyers, with median home prices requiring 10-15 years of gross average income to purchase.
The median home price ranges from US$1,500-2,200 per square meter, with city center properties averaging around US$150,000 for a typical residence.
Average monthly household incomes are estimated at $800-$1,200, creating a substantial gap between local earning capacity and property values.
This affordability gap indicates that the Dominican Republic housing market is primarily driven by foreign buyers and higher-income local residents, rather than the broader domestic population.
The combination of rising property prices and relatively stable local incomes suggests that affordability challenges will likely persist for average Dominican families.
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How many homes are currently on the market, and how does inventory compare to historical averages?
Current inventory levels in the Dominican Republic show extensive listings with over 7,400 houses and hundreds of condominiums available for sale nationwide across major real estate platforms.
Despite this apparent abundance, inventory trends indicate that supply gets absorbed quickly in tourist hotspots and premium coastal locations.
Overall inventory levels remain lower than pre-pandemic highs due to consistently strong demand from both foreign buyers and investment purchasers.
The healthy supply situation varies significantly by location, with urban areas typically having more balanced inventory while beachfront and resort areas experience faster turnover.
This regional variation in inventory dynamics contributes to different price appreciation patterns across the Dominican Republic real estate market.
What are foreign buyers and investors doing—are they buying more, less, or the same?
Foreign buyers remain extremely active in the Dominican Republic real estate market, accounting for up to 40% of luxury property transactions as of September 2025.
- United States buyers: Continue to dominate foreign purchases, attracted by proximity and favorable exchange rates
- Canadian investors: Maintain strong presence, particularly for vacation and retirement properties
- European buyers: Increasing activity from European investors seeking Caribbean diversification
- Digital nomads: Growing segment purchasing properties for remote work and lifestyle purposes
- Rental investors: High demand for income-generating vacation rental properties
Foreign direct investment in real estate reached $798 million in 2024, representing a 3% year-over-year increase and maintaining the sector's position as a top-ranked FDI destination in Caribbean Small Island Developing States.
The absence of restrictions on foreign ownership, combined with full property rights and tax incentives in tourism zones, continues to attract international investment.
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What is happening with tourism, and how does that affect demand for vacation and rental properties?
Tourism in the Dominican Republic is experiencing a significant surge, with over 12 million visitors expected in 2025, representing a substantial increase from 10 million visitors in 2023.
This tourism boom directly translates into high demand for short-term vacation rentals, driving up both rental yields and property prices in key destinations including Punta Cana, Bávaro, Las Terrenas, and Cabarete.
Rental demand and occupancy rates remain robust, particularly for properties located near beaches and within resort areas that cater to the influx of international visitors.
The strong tourism performance supports property values by creating reliable income streams for vacation rental investors and maintaining consistent demand for hospitality-focused real estate.
Digital nomad activity has also increased significantly, adding another layer of demand for properties that offer both vacation appeal and remote work capabilities.
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.
What government policies, taxes, or incentives could impact real estate prices?
The Dominican Republic government maintains several policies that strongly support real estate investment and positively impact property prices.
| Tax/Policy | Rate/Details | Impact on Market |
|---|---|---|
| Annual Property Tax | 1% on value above ~US$166,000 | Moderate tax burden |
| Transfer Tax | 3% of property value | Standard transaction cost |
| CONFOTUR Incentive | Up to 15 years tax exemptions | Major boost for foreign investors |
| Foreign Ownership | No restrictions | Supports international demand |
| Tourism Zone Benefits | Multiple tax exemptions | Drives coastal property demand |
| Residency Incentives | Investment-based programs | Encourages property purchases |
The CONFOTUR incentive program provides up to 15 years of exemptions on transfer tax, annual property tax, and capital gains for buyers in government-certified tourism projects, representing a major financial advantage for foreign investors.
New residency and investment incentives further support housing demand and contribute to continued market growth by making it easier for foreigners to establish Dominican Republic residency through property investment.
How is the Dominican Republic's broader economy performing—GDP growth, inflation, and employment?
The Dominican Republic's economy demonstrates strong performance with GDP growing 2.7% year-over-year in Q1 2025 and projected to expand 4% for the full year 2025.
This growth rate positions the Dominican Republic among the fastest-growing economies in Latin America, providing a solid macroeconomic foundation for continued real estate market strength.
Inflation has moderated to 3.4% as of July 2025, indicating price stability that supports both local purchasing power and foreign investment confidence.
Employment remains stable at low single-digit unemployment rates, with job creation occurring across tourism, construction, and emerging industrial sectors.
The combination of solid economic growth, controlled inflation, and employment stability creates favorable conditions for sustained real estate demand and price appreciation.
What trends are visible in rental yields and occupancy rates across the country?
Rental yields in the Dominican Republic average 6.7-7.5% nationwide, with significant variation based on property type and location.
- Prime beachfront short-term rentals: Generate yields of 10-15% in top tourist areas
- High season occupancy: Tourist areas achieve 70-80% occupancy during peak periods
- Urban rental properties: Typically show lower yields compared to tourist-focused properties
- Vacation rental platforms: Support strong booking rates and premium pricing
- Digital nomad demand: Creates additional rental income opportunities beyond traditional tourism
Occupancy rates and rental yields continue to benefit significantly from the booming tourism sector and increasing digital nomad activity throughout the Dominican Republic.
The strong rental performance supports property values by providing investors with reliable income streams and demonstrating the income-generating potential of Dominican Republic real estate.
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What do local real estate experts and major agencies forecast for prices over the next 12 to 24 months?
Local real estate experts and major agencies maintain optimistic forecasts for Dominican Republic property prices through 2026, with most predicting continued annual price appreciation of 3-7%.
Stronger growth is expected in coastal and premium locations where supply constraints and foreign demand remain most pronounced.
Key demand drivers supporting these forecasts include sustained tourism growth, continued foreign investment, favorable tax policies, and limited new supply in desirable areas.
Experts anticipate the market will remain buoyant as long as tourism and foreign direct investment maintain their current strength, though potential mortgage rate increases could eventually moderate local demand.
The consensus among industry professionals is that the Dominican Republic real estate market will continue its positive momentum through at least 2026, supported by fundamental economic and demographic trends.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
The Dominican Republic housing market shows no signs of price decline in the near term. Strong fundamentals including robust foreign investment, booming tourism, and limited coastal supply continue to drive property values higher across the country.
Multiple factors support continued price appreciation through 2026. Government incentives, economic growth, and sustained international demand create a favorable environment for property investors and buyers seeking both investment returns and lifestyle benefits in the Caribbean.
Sources
- The LatinVestor - Dominican Republic Price Forecasts
- Global Property Guide - Dominican Republic Price History
- International Investment - Dominican Republic Real Estate Market
- Global Property Guide - Home Price Trends
- Globe Newswire - Dominican Republic Construction Industry Report
- The Global Economy - Dominican Republic Mortgage Rates
- Global Property Guide - Mortgage Interest Rates
- World Bank - Dominican Republic Overview