By Hugo Espinal
Special for El Inmobiliario
In December 2020, in the midst of the pandemic, I was contacted by a client who owned a property that exactly XX years earlier had purchased a beautiful and spacious 2-bedroom apartment in the La Esperilla sector, under construction, from one of our most sought-after construction companies.
He tells me: “Hugo, I can’t take it anymore and I need to sell my apartment and rent for a while until I buy somewhere else in a more residential area.”.
My astonishment that she wanted to sell so soon, despite having added value in decoration, apart from the fact that she really liked her apartment as such, vanished when she told me that the reason for all this was the short-term rentals that were causing headaches in her building and especially because of the misuse of the social areas and parking lots by the condominium owners.
This client, a property owner, noticed what would become a trend in the Santo Domingo real estate market and quickly began to take concrete actions, such as selling her property and opting to move to a more family-friendly residential area temporarily.
Today, in 2024, the shift in buyer demand in Santo Domingo is noticeable: "I'm looking for an apartment where short-term rentals aren't allowed." This has led real estate developers to change their offerings, making each project's purpose much clearer and less mixed than in the past. Nowadays, projects are either exclusively for residential use or for investment purposes (on large lots, developers build two buildings, each with a different purpose), where short-term rentals are permitted.
Mixed-use projects, like those in major cities around the world, are currently being developed and have already been completed and delivered. These projects feature street-level commercial spaces, such as restaurants or small shopping plazas, investment apartments in the middle, and social areas and/or more restaurants on the upper levels.
Just as that client owner decided to move, many other clients who own apartments for short-term rental investment constantly call me to say they want to put their apartments up for long-term rental; this creates a large supply of apartments for long-term rental, resulting in longer rental periods for these apartments and prices gradually decreasing, especially for 3-bedroom apartments with ample square footage.
But be aware, this renewed oversupply of apartments for long-term rentals doesn't mean that the demand for short-term rental apartments has decreased; on the contrary, it has remained steady. Short-term rentals continue to thrive, but only where apartment owners have established rules for coexistence with guests and residents in their buildings. And that should be the focus: regulating and standardizing what guests can and cannot do in buildings.
Since January 2024, at Plusval Inmobiliaria, the sales trend for 3-bedroom apartments has been steadily increasing month after month, according to our business intelligence data; this confirms that the demand for residential and family apartments is what buyers are currently looking for, leaving behind the Santo Domingo skyline of 1 and 2-bedroom buildings that had been developing for several years.
The real estate market in the Dominican Republic, especially in Santo Domingo, is very dynamic, and we must keep our eyes wide open to know what to buy and where to invest intelligently and as safely as possible.
I'm here to advise you on anything within my reach, just a click away, as a great colleague and friend in the industry says.
