Escarlin Pozo
El Inmobiliario
SANTO DOMINGO.-The decline in sales, delays in obtaining permits, and the increase in financial and labor costs are, according to engineer Rafael Durán, manager of Investments SBDS, the main causes that explain the current slowdown facing the construction sector in the Dominican Republic.
The latest report from the Central Bank of the Dominican Republic indicates that during the past month of March, Construction rebounded, changing the numbers positively, although when the first quarter is calculated as a whole, the numbers remain negative at -1.2.
In that context, Durán warned about the marked decline in public investment in infrastructure, a scenario he described as a "historical fact" of the last six decades.
“The public sector, which depends on public investment in state infrastructure, is at its lowest level in the last 60 years, 2.2% below the government of Salvador Jorge Blanco, which had been the government that invested the least,” he stated.
In conversation with El Inmobiliario, the businessman explained that the market faces pressures from different fronts, comparing the situation to a continuous hunt.
“We are certainly, let’s say, like elephants on the hunt. It’s not just one hunter, but hunters everywhere, chasing after an elephant and shooting at it. That’s how the construction sector is,” he explained, illustrating the current situation.
According to the most recent report from the Central Bank, this sector registered a year-on-year decrease of -7.7% between January and February 2025, reflecting a slowdown in its dynamism.
Speaking about the drop in sales, Durán indicated that factors such as economic uncertainty in the United States, the reputational effects of "real estate scams" and the decrease in internal payment capacity have directly impacted demand.
"The fear of buying by those abroad, the downturn in the economy there as well, and the fact that internally people do not have the ability to pay," he listed as the main reasons for this decline.
He also pointed out that another cause of this decline is due to delays in permits from institutions.
He noted that, although the Ministry of Housing, Habitat and Buildings (Mivhed) has improved response times in Santo Domingo, other institutions such as the Ministry of Environment and Natural Resources, the Ministry of Tourism (Mitur) and water and electricity service companies are experiencing considerable delays.
“There is a slowness that basically exists in those three institutions, in the waters, with what has to do with the environment and with what has to do with Mitur,” he specified.
As an example of these obstacles, the engineer recounted that he has had projects paralyzed by delays in responses from the drinking water entity.
“I’ve been trying to get approval from CAASD since January, and it took them two months and 20 days to respond in the operations department that they didn’t have water available,” he complained.
He added that, had he received the answer in time, he would have already been able to design the well system that he is now only beginning to structure.
“If they had told me in the first week, I would have already designed the well system I need, and now I am designing it because they responded to me five days ago,” he commented.
Rafael Durán. (EXTERNAL SOURCE).
He also noted that the Tourism Department exhibits very long response times for projects requiring its approval in the country's tourist areas.
“Mitur takes between six and ten months to respond,” he said, emphasizing that this slowness has led many developers to build projects with only the approval of the city council, without having the licenses from Mivhed.
Furthermore, he criticized the fact that the densities authorized by Mitur in areas such as Bávaro, Punta Cana, Puerto Plata and Samaná are "really very low", which further complicates the development of real estate projects in those areas.
In another sense, Durán warned that the migratory situation has impacted the availability of labor, especially in tourist areas such as Punta Cana and Bávaro.
“Four Haitians were taken from me during Holy Week, but they’re back now. However, the construction project has stopped, which creates instability. There’s a double standard surrounding repatriations because it’s a business; they take them away, but they’re back here a week later,” he revealed.
He also criticized the high cost of financing for home purchases, indicating that, despite the availability of funds in the banking sector, interest rates remain high.
“The average is around 14 or 15 percent. The rate for temporary workers is around 15.5 or 18 percent as well,” he said.
Given this situation, he raised the need to promote more favorable conditions for home purchases, such as extending financing terms and establishing lower rates.
Finally, he proposed that mortgages be granted for a term of 30 or 40 years, which would boost home purchases, facilitate access to property ownership, and revitalize the construction sector.
