Demand was far greater than the supply, a thriving influx of international buyers, lowest interest rates in the history of the Dominican real estate market, both US dollars and Dominican pesos, national and international economic stability, high rental income, mega tourism developments sprouting like wild flowers, international financing, bonds were issued, free favorable press, and tourism numbers at an all time high. Buyers were looking for anyone developing or selling near the tourism hubs of the island.
Many considered that there was no reason for the Punta Cana and Dominican Republic not to be known as the “Home of the World Belize Real Estate“; however, it was also emphasized that it was imperative for the real estate industry to take some necessary measures in order for development to continue in an organized fashion.
Fast forward to end of 2008. Today, the real estate industry is also experiencing a completely atypical situation, which unfortunately can’t be called positive, but can’t be called negative either. It is going back to what is considered a normal, standardized real estate market. Supply and demand more in balance than in years past.
Any real estate developer can tell you that it is not normal to sell an entire development in less than a year. Normal would be for at least two years to sell a small to medium size development and perhaps more time on the larger more ambitious developments within closed gated communities. Of course, it is normal to think that things are cooling off after coming out of the “BOOM” we have been experiencing for the past few years. Instead of cooling off, I would call it business as usual, going back to normal, supply and demand in equilibrium!
At the moment it is important to sit down and analyze the “foundation” of our market as we take the necessary corrective measures based on lessons learned.
First, let’s look at the foundation. Why the Dominican Republic? Why Punta Cana? What makes us so special? Why are Punta Cana and the Dominican Republic relevant investment markets? Why alternatives for second home buyers? Why should it be considered ideal places for retirement?
Excellent geographical location that allows us to have year round tropical climate. The cold countries remain cool. We continue to have some of the best white sand beaches and turquoise colored crystal clear waters Legal Framework – No Restrictions for Foreigners, Equal Ownership Rights Economic Stability Social Stability Personal Safety, Dominican Republic crime rates are low in comparison to other Caribbean Neighbors Modern and adequate transportation and telecommunications infrastructure (airports, seaports, highways, telephone, internet). There is room for improvement, but we are headed in the right direction. Extensive complementary offer (water sports, golf, restaurants, grocery stores, resorts, casinos) Ecotourism The Dominican People – Always friendly and hospitable!
Beyond these points, we must recognize that there has been encouragement for foreign investment by the local government. Foreign direct investment more than doubled in 2008, according to statistics from the Center for Exports and Investment (CEI-RD). Investment in 2008 totaled US$2. 35 billion, for a 55. 1% growth from 2007.
Just last week, December 12, 2008, Dominican Republic President Leonel Fernandez broke ground for US$1. 4 billion dollars VistaCana Resort & Country Club in Punta Cana. President Fernandez and the project’s main promoter, Salvador Termín headed the groundbreaking ceremony, with Tourism minister Francisco Javier Garcia also present. Mr. Termin spoke about the world crisis we are experiencing, and emphasized that they have prepared themselves for the crisis. “We have decided to continue to invest, since that is what we do. We believe in the Dominican Republic since it continues to be a safe place to invest with lower risks in comparison to other places around the world”.
Venezuelan investors began construction of the tourist complex on six million square meters of land. The complex will have 6, 000 residences, a 100 room business hotel, a 27-hole golf course and a 180, 000 square meter artificial lake integrated to the beach area, and built at a cost of arond US$1. 4 billion dollars. This will bring 20, 000 new jobs to Punta Cana when concluded.
President Fernandez said “this development is proof that within the global crisis that we live today, foreign companies like the developers of VistaCana, testify that the Dominican Republic still has economic and financial security for world wide investors, developers and end users alike. 1, 500 homes have been purchased by an investment fund for North americans retirees out of Washington D. C. plus more than 200 units sold to individuals. ” President Fernandez added that in addition to VistaCana, just last week he was in La Romana for the groundbreaking event for the mega development Playa Nueva La Romana by Spain’s Grupo Piñero, owners of the Gran Bahia Principe Resorts. This represents US$2. 5 billion dollars in foreign investment. In addition, in the coming days, President Fernandez will be alongside the Prince of Monaco, in the groundbreaking ceremony for Punta Perla located in Cabeza de Toro near Punta Cana, with another US$1. 6 billion dollars in foreign investment from the U. K.