By Pedro Ardón
El Inmobiliario
It warns about the importance of adapting to an uncertain economic environment and monitoring key factors such as inflation, interest rates and the dollar exchange rate to cope with possible fluctuations in the real estate market.
SANTO DOMINGO. – Economist Francisco Tavárez anticipates that the real estate market in the Dominican Republic will experience a 2025 characterized by positive dynamism, driven by a series of key factors that favor the sustained growth of the sector.
According to the expert, the recent reduction in the Monetary Policy Rate (MPR), which currently stands at 5.75%, is contributing to a favorable environment for the construction sector. This measure, which has resulted in a decrease of 275 basis points since May 2023, is making credit cheaper, which will boost both the supply and demand for properties.
The economist also highlighted that inflation, which closed 2024 at 3.35%, is within the Central Bank's target range, reflecting a trend of economic stability that will continue to favor confidence in investors and the real estate market.
The Dominican economy's projected growth of 5.2% by 2024 also plays a key role in the sector's dynamism. According to Tavárez, the combination of these factors will create a favorable environment for sustained growth in the real estate market.
Similarly, a key point he highlighted is the impact of both national and international economic policies. At the local level, the release of RD$35 billion from the legal reserve requirement for loans earmarked for home purchases, interim loans, and new housing construction will provide crucial support to the sector.
This will encourage the acquisition of low-cost housing, a key segment for solving the housing deficit in the country and generating greater access to property ownership for the younger population.
Tavárez also emphasized how the pro-business policies of the United States, spearheaded by the Donald Trump administration, could influence that country's economic growth, which would translate into an increase in remittances to the Dominican Republic and an improvement in the purchasing power of Dominicans living abroad. "This phenomenon could result in a surge in demand for housing, especially in the mid- and low-price segments," he added.
Regarding the behavior of property prices in the short and medium term, Tavárez believes that prices will continue to rise due to a limited supply, driven by strict land-use regulations and a scarcity of available land in urban areas. However, he warns that this increase could create challenges for housing affordability.
“In particular, young buyers could be excluded from the real estate market due to high prices, which represents a barrier to accessing property in a context of economic growth,” he warned.
Tavárez also warned about the effects of global geopolitical changes on the local real estate market, especially due to tensions in Ukraine and the potential trade war between the United States and China.
These factors could generate global economic uncertainty, affecting foreign investment flows and the prices of imported inputs, which would have a direct impact on construction costs and, therefore, on property prices in the country.
Given this scenario, he recommended that real estate agencies prepare to adapt quickly to any economic changes that may arise, especially those related to interest rates, the dollar exchange rate, and input prices.
“Real estate companies must monitor macroeconomic trends, such as fluctuations in inflation and interest rates, to anticipate potential increases in construction costs. Furthermore, it is essential that agencies focus on innovation and adapting their business models to a more demanding market with expectations of more affordable housing for the general public,” he explained.
According to the professor, one segment that promises strong growth in 2025 is low-cost housing, which, with the legal reserve policy aimed at improving access to this type of housing, is positioned as the most dynamic area of the real estate market.
Stating that, given the housing deficit facing the Dominican Republic and the State's support to improve access to housing, this segment will be key in improving the quality of life of the neediest families.
Francisco Tavárez. (EXTERNAL SOURCE).
With a combination of positive economic factors and public policies aligned with market needs, Francisco outlined 2025 as a year of growth and opportunity for the real estate market in the Dominican Republic.
However, the university professor urged caution regarding fluctuations in international markets and potential economic challenges that could impact housing costs and demand. Similarly, the real estate sector must adopt a flexible and adaptive approach to remain competitive and sustainable in an increasingly complex economic environment.
