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Real Estate In The Dominican Republic
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We have previously written numerous articles and publications about the Dominican Republic, but we continue to receive numerous additional inquires regarding affordable real estate in the Caribbean.  It is true that the Dominican Republic still offers the best value, in comparison to other similar properties located in other Caribbean destinations.  This may seem somewhat boastful, but in reality it is not.  That is to say if you compare similar sized apartments (condominiums) or single family homes in a number of other jurisdictions, you purchasing power still goes much further in the Dominican Republic.
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One major or interesting fact about the Dominican Republic is that the real estate market has continuously and consistently seen appreciation in terms of real estate prices.  Part of the reason for this has been the absence of shoddy lending practices that has occured in other countries (such as the US, Spain, etc.).  Which is to explain that most foreigners purchasing real estate in the past have paid cash, and regardless if a case of a foreigner or local applying for a bank loan, 20 to 30 percent down payment is the norm, with interest rates ranges anywhere from perhaps 12 up to 20 precent, all depending if the loan is denominated in US Dollars or Dominican Pesos.  In other words, lending standards the way they used to be (and why people want to pay off the mortgage as quickly as humanly possible).
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But in addition to that, we still have the case of housing demand (and bank lending standards that have prevented a speculative boom, at least with borrowed money being the point).  While the latest phenomenon in other countries has been young people graduating university and moving back in with their parents, the reverse is true in the Dominican Republic.  In other words, the fairly new trend in apartment buildings (all apartments or flats are condominium ownership, just to be clear).  Whereas in the past the normal condominium was 2 or more often 3 bedrooms, there have been a few properties offering 1 bedroom condos, which again in something fairly new.  This has come about from demand by the younger generation purchasing in essence their first home or property.  So, the demographic trends, the propensity to either pay cash or at least make a substantial down payment, and general overall housing demands have resulted in fairly steady (albeit conservative) growth in the housing markets.  The exception to that of course is going to be the tourist real estate market, which we will discuss below.
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One Country - Two Markets

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As is the case with many other jurisdcitions, there is what can be described as a real estate market for locals and another for foreignors or tourists.  Which is to say, higher end (or what is considered locally to be higher end) properties in a beach resort or enclosed golf course community, and another market geared towards local buyers.  This is not to say that local citizens would not or do not buy properties in these tourist areas - to the contrary.  However, generally speaking, when investigating a real estate purchase, looking only at higher priced properties located in a beach front project or golf course enclave will give you a false view of the entire or everall market that is available.
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What has been the basic differences between these two markets?  Obviously the first is price or cost, as certainly beach front or higher end golf course community homes are going to have a higher price tag than something with similar square footage located elsewhere.  So, just as a rough example, you may find an 1800 square foot (or 180 square meter) condo in a beach front project selling for US$400,000.  At the same time, you may find a similar property, located in a high end area of the capital of Santo Domingo for maybe US$200,000.   Location, location, location has always been the key to real estate and ocean front real estate always cost more, everywhere.
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However, the major difference in these markets has been not only who the majority of buyers are, but HOW they are buying.  Which is to explain that, in the past, at least in terms of American buyers, a vast majority were purchasing properties in the resort areas of the Dominican Republic (and in other countries as well) using home equity loans against real estate located in the US to do so.  In other words, taking loans against property in the US to pay cash in the foreign country, albeit a loan none the less.  All of this has changed due to the economic and banking issues that have come about since 2008.   Which is to say, with banks in the US cutting or eliminating home equity lines of credit, so has the activity of Americans buying real estate abroad as well.  This has been the case in Mexico, Panama, Costa Rica and a host of other markets or countries - so it is not a unique situation to tourist areas in the Dominican Republic alone.
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Local Means Less

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While it is true that properties located in a resort or tourist area are going to be priced higher, the reverse of course is that properties in the local market will cost less accordingly.  Per square foot, or per square meter, anyone interested in purchasing a home or condo will find more affordable housing prices in areas not located in a vacation or tourist destination.  As such, while there is a wide varirty of housing options catering to different segments of the population, generally speaking, homes or apartments considered to be acceptable to the average middle class buyer coming from North America or Europe will find the following price ranges, on average, in Santo Domingo :
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Apartments (condo) - 120 square meters (1200 square feet) to 180 square meters (1800 square feet): US$ 140,000 (or equivalent in Dominican Pesos) to US$ 200,000.  Note: This kind of property would be considered a more upscale property in a building with designated off street parking, building staff, security, possibly central gas and emergency generator plus more upscale termination.
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Single Family Homes - 200 square meters (2000 square feet) to 500 square meters (5000 square feet):  US$235,000 to US$400,000.
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Note: Real Estate prices in general tend to be slighlty less in Santiago, which is the second largest city in the country, located near the north coast of the country on the Atlantic side (Santo Domingo is the capital, located on the sourther side or Caribbean sea side of the country).
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