By Joan Feliz Valoys
Special for El Inmobiliario
For over two years, I've been writing about a problem plaguing the Dominican Republic's real estate market: the lack of regulation and the informality that characterizes the sector. Despite warnings and growing concerns from investors and market professionals, little to nothing has changed. Meanwhile, the sector continues to grow, but it does so on a fragile foundation that jeopardizes its sustainability and the confidence of those who invest in this market.
Looking ahead to 2025, this inaction becomes a critical challenge. With a real estate market that moves billions of dollars annually, it is inconceivable that multimillion-dollar transactions, brokers, and real estate agents operate without proper oversight and regulation.
The persistent problem of lack of regulation
The lack of oversight and validation mechanisms for real estate agents and brokers remains a critical problem. Anyone can act as an intermediary in a real estate transaction without meeting minimum standards, without being registered with any official body, and without being held accountable. This creates an environment where informal practices prevail and buyers, both local and foreign, are exposed to unnecessary risks.
Since I first raised this issue over two years ago, I have consistently emphasized that the lack of regulation not only affects buyers but also damages the country's image as a reliable investment destination. However, the authorities have ignored calls to establish a robust regulatory framework to professionalize the sector.
A market of multi-million dollar transactions without oversight
According to the Central Bank, in 2022 foreign direct investment in real estate represented approximately 25% of total investment in the country, reaching figures exceeding one billion dollars. However, most of these transactions take place in an environment lacking clear regulations and effective oversight.
This informality not only creates uncertainty but also opens the door to illicit activities, such as money laundering, by handling large sums of money without adequate traceability mechanisms. The lack of a reliable registration system to verify property ownership and history further exacerbates the problem.
The critical role of brokers
Real estate brokers and agents should be a cornerstone of the market, but in the Dominican Republic they operate in a regulatory vacuum. In countries with developed real estate markets, agents must meet strict certification requirements and are subject to oversight by regulatory bodies. Here, anyone can enter the business without training, experience, or proven ethics.
This gap creates inequality in the market: informal agents compete unfairly with professionals who seek to operate ethically, and buyers have no guarantee that they are dealing with qualified people.
Risks to the future of the market
Looking ahead to 2025, the risks posed by the lack of regulation are numerous:
1. Loss of international confidence: Informality undermines the credibility of the Dominican market in the eyes of foreign investors, who could redirect their capital to countries with greater transparency.
2. Risk of stagnant growth: Without a regulatory framework that encourages formalization, the sector could face barriers to attracting financing and developing new projects.
3. Social impact: The lack of regulation also affects local buyers, especially those with lower incomes, who face greater risks of fraud and unequal conditions in access to housing.
The path to regulation
It is essential that authorities and industry stakeholders recognize that a lack of regulation can no longer be the norm. Some urgent measures include:
Creation of a regulatory body: This body should be responsible for certifying real estate agents, supervising their activities, and ensuring transparency in transactions.
Mandatory training: Establish training and certification programs for brokers and agents, ensuring they meet minimum standards of knowledge and professional ethics.
Digitization of property registration: Implement a modern, accessible and transparent system that allows verification of property ownership and history.
Clear rules for competition: Establish regulations that promote fair and responsible practices in the sector, penalizing informality and illicit activities.
Conclusion
I have insisted on this issue for years because I firmly believe that the Dominican Republic's real estate market has extraordinary potential. But for that potential to materialize, it is essential that the country decisively address the problems of informality and lack of regulation that plague it.
The time to act is now. The real estate market is not only a key economic driver, but also a reflection of the image the Dominican Republic projects to the world. Regulating it is not just a matter of protecting investors; it is a matter of ensuring a sustainable and fair future for all stakeholders.
At Constructora Incaribe, with over 30 years of experience, we have always prioritized ethics and a commitment to quality. Our constant effort has been to carry out responsible work on every project we develop, distinguishing ourselves as a benchmark of professionalism in the sector. We firmly believe that the sustainability and growth of the real estate market must be based on transparent and regulated practices, which motivates us to continue advocating for the formalization and strengthening of this important sector.
The author: He is MB, a Digital Marketing specialist, operations manager of the construction company Incaribe, with more than 10 years of experience in the construction and tourism sector.
