“Despite this promising outlook, the government faces challenges such as reducing the housing deficit, which currently stands at around 2 million homes. Furthermore, it must work to reduce bureaucracy in processing building permits, property titles, and documentation such as property taxes and other levies.”.
SANTO DOMINGO.- With a growth in the first half of this year of 36.5% of the economy and 15% of the Gross Domestic Product (GDP), the construction sector is positioned as one of the main protagonists of the Dominican economic rebound post-pandemic, declared Jorge Montalvo, president of the Dominican Association of Housing Builders and Promoters (ACOPROVI).
In 2012, data from the then National Housing Institute (INVI), now the Ministry of Housing, Habitat and Buildings (MIVHED), certified only one thousand low-cost housing units, while in the first six months of 2021, the country has secured the figure of 12,800 units, which shows that there has been a significant increase in the low-cost market.
“So it has been the fastest growing sector and it has largely been the result of the development of housing projects, both medium and low cost, and those with a tourist vocation,” the architect pointed out when presenting the topic “Property Titling in the Real Estate Market,” during the VII Inter-American Conference on Cadastre and Property Registry, held in the country from the second to the fourth of this month.
He argued that real estate development in the country over the past 10 years has been closely linked to the emergence of Law 189-11 for the Development of the Mortgage Market and Trusts in the Dominican Republic, because it has allowed access to low-cost housing for large segments of the population, significantly impacting all real estate development.
Montalvo assured that the guarantees for the titling process in the country are in place because seven out of every ten homes that are sold are done through bank financing, "which means that they have to have a title deed and all the appropriate legalities so that the operation can be carried out.".
“In that sense, even with that amount, our country still has significant room to grow in terms of mortgage financing, since the mortgage portfolio represents only 4.5% of GDP, but the average in Latin America is 8% and Chile, where there is high mortgage financing, has 17%, therefore there is still room to grow in housing,” noted the ACOPROVI representative.
Montalvo predicts high growth potential for the real estate sector with the approval of MIVHED, whose agency will allow the development of public policies on housing and will provide access to populations where the private sector alone had not been able to reach.
He said that the “effective demand” study, conducted in 2017 by the agency he heads, revealed that 90% of applications were concentrated in homes priced below 4 million pesos, a market the private sector could not supply. “Hence the importance of this housing law, which will allow us to develop social housing in which the State will act as a facilitator.”.
“These are two plans, ‘Happy Family’ and ‘My Home,’ which in their first phase aim to build 11,000 and 7,000 homes, respectively. The private sector will develop them, which ensures effective titling because we are tied to the financing and trust schemes that require all the appropriate regulations, specifically regarding mortgage financing,” he emphasized.
Challenges
The president of ACOPROVI understands that, despite the promising outlook, the government faces challenges such as reducing the housing deficit, which currently stands at around 2 million homes. Furthermore, it must work diligently to streamline the bureaucracy involved in processing building permits, property titles, and documentation such as property taxes and other levies.
