It cites the increase in housing costs and the loss of purchasing power as factors that contributed to the collapse of the sector.
SANTO DOMINGO – Economist Raúl Ovalle stated that the construction sector closed 2025 with its worst performance in over a decade, warning that 2026 will not be a year of recovery, but rather a period of stabilization without dynamism. “The sector has hit rock bottom. It hasn't collapsed, but it's not ready to run a marathon either,” he said.
He explained, during his appearance on the program Media Group El Inmobiliario, that although the Central Bank has not yet published the final figures, the accumulated numbers between November 2024 and November 2025 show negative growth. "Everything points to the sector closing between -2% and -4%. It's the first time since 2013, excluding the pandemic, that we've seen a decline of this magnitude," he noted.
The expert noted that construction is one of the sectors with the strongest productive linkages in the country, and that its decline affects hardware stores, retail, manufacturing, transportation, employment, and professional services. “When construction slows down, a significant part of the economy slows down. It's a barometer of overall performance,” he stated.
He also argued that the sector's decline is not due to a single factor, but to a combination of elements that created a "perfect storm".
Low purchasing power
Among the factors that contributed to the decline in the construction sector, Ovalle cited the accumulated increase in housing costs, which have risen by around 50% since 2019, while household incomes have only grown by about 40%. “That 10% gap represents a loss of purchasing power. And that directly impacts the low-cost segment,” he explained.
To this, the professional adds the interest rates, which remain high and limit families' purchasing power. "With high rates and wages that aren't keeping pace with inflation, the pool of potential buyers is shrinking. The local market is under a lot of pressure," he stated.
He noted that, although the Dominican diaspora has maintained its demand, that behavior could change if mortgage rates in the United States begin to fall in the coming months.
The economist also mentioned the reputational impact of real estate scams in recent years. Although isolated, he said, they have created unease and distrust, especially among foreign buyers. “The diaspora is a key segment. When trust is affected, investment is affected,” he pointed out.
A year of transition
Ovalle insisted that 2026 will be a year of recovery, not expansion. “We won't see a boom, but we will see a sector that stops declining. By mid-year, we could begin to see moderate growth, and by 2027 we could return to previous levels,” he estimated.
Low public investment
Raúl Ovalle emphasized the need for greater public investment, which he described as historically low in recent years. “Public investment increases land value, attracts private capital, and revitalizes the sector. Without the Coral Highway, we wouldn't have the second-home boom we're seeing today. The same will happen with the Amber Highway when it's completed,” he stated.
He warned that if measures are not taken to improve access to housing and stimulate investment, the recovery could take longer than expected. “The sector is not collapsing, but it does require a profound reconfiguration. 2026 will be a year for stabilization, not for celebration,” he concluded.
