Construction in the Dominican Republic: the keys to a down year in 2025 and the signs that will shape 2026

A year of slowdown, conditioned by high interest rates, lower investment and regulatory obstacles, gives way to a 2026 with moderate expectations: the recovery will depend on better financing conditions, greater institutional agility and a boost to affordable housing.

SANTO DOMINGO. – The year 2025 will be recorded as a period of slowdown for the construction sector in the Dominican Republic, despite the fact that this is one of the activities historically crucial for economic growth, employment, and private investment.

Despite occasional upticks, official indicators and voices from within the sector agree that the slowdown was the dominant feature of the year, conditioned by financial, regulatory and confidence factors.

Figures from the Central Bank (BCRD) confirm this interpretation. During the first half of 2025, the value added of construction registered a negative year-on-year change of -2.3%, in contrast to the moderate growth observed in 2024 and the partial recovery seen in 2023.

Although March saw a significant year-on-year rebound, driven by the reactivation of private projects and increased sales of supplies, the accumulated result failed to reverse the downward trend for the year.

This behavior occurred in a context of high real interest rates, which made financing for developers and mortgage credit for end buyers more expensive.

This was compounded by the caution of private investors in the face of an international scenario marked by economic uncertainty and lower capital flows towards sectors intensive in long-term investment, such as construction.

From the business sector, the warnings were repeated. The president of the Dominican Association of Housing Builders and Developers (Acoprovi), Annerys Meléndez, described 2025 as a “complex” year for housing, noting that the real estate supply experienced a reduction of nearly 12%, affected by the high cost of financing and by administrative hurdles (permitting) that slow down the start of new projects.

In various public statements, Meléndez insisted that, although the Central Bank released resources to stimulate the economy, these did not always reach the formal housing segment with the necessary speed or focus, particularly the medium and low price housing.

Data from the financial system reveals an apparent paradox. Loans for housing construction and acquisition increased between 2023 and 2025, yet this credit growth did not translate proportionally into a greater increase in construction projects.

For the trade associations, this reflects a more selective market, where only well-structured projects, with high pre-sales or institutional backing, managed to move forward.

Another key element was the lower demand for construction materials, especially rods and other structural inputs, an indicator that traditionally anticipates a slowdown in activity.

This drop confirmed that the problem was not exclusively statistical, but operational, with fewer projects started and more conservative execution schedules.

Looking ahead to 2026: between caution and opportunity

Looking ahead to 2026, the sector is wavering between caution and moderate optimism. Analyses published in El Inmobiliario suggest that next year could be a turning point, especially for affordable housing, where there is significant pent-up demand.

According to these analyses, if better financing conditions, greater regulatory agility, and focused public policies are aligned, the affordable housing segment could register historic levels of demand.

However, warnings also persist. Economist Rafael Espinal has pointed out that, without structural adjustments, particularly in permitting processes and investment incentives, the sector risks facing a deeper contraction in 2026.

In his view, investor confidence remains fragile and depends on clear and sustained signals from the institutional sphere.

In summary, 2025 provided clear lessons for Dominican construction: the sector remains resilient, but highly sensitive to financial and regulatory conditions.

Performance in 2026 will depend less on short-term measures and more on a comprehensive strategy that allows for the recovery of dynamism, strengthens the housing supply, and restores the confidence of the actors who support one of the main activities of the national economy.

Construction Sector (2023-2025)

*Source: figures and reports from the Central Bank of the Dominican Republic (macroeconomic statistics) and specialized publications.