SANTO DOMINGO – Economist Raúl Ovalles believes the private sector must adapt to the new cost realities of the construction market in the country. “We can’t keep building low-cost apartments of 100 or 110 square meters expecting the same demand as before. With this cost shock, we need more efficient housing. Ninety-square-meter apartments that function like 110-square-meter ones,” he stated.
According to the specialist, the concrete block and cement sector requires a profound reconfiguration to recover, warning that if measures are not taken to improve access to housing and stimulate investment, the recovery could take longer than expected. “The sector is not collapsed, but it does require a profound reconfiguration. 2026 will be a year for stabilization, not for celebration,” he said while participating in the program Media Group El Inmobiliario.
He also emphasized the need for greater public investment, which he described as historically low in recent years. “Public investment increases land values, attracts private capital, and revitalizes the sector. Without the Coral Highway, we wouldn't have the second-home boom we're seeing today. The same will happen with the Amber Highway when it's completed,” he stated.
Raúl Ovalle stated that the construction sector closed 2025 with its worst performance in over a decade and that 2026 will not be a year of recovery, but rather a period of stabilization without dynamism. “The sector hit rock bottom. It didn't collapse, but it's not ready to run a marathon either,” he said.
He explained that although the Central Bank has not yet published the final figure, the accumulated data between November 2024 and November 2025 already showed negative growth. “Everything indicates that the sector closed between -2% and -4%. This is the first time since 2013, excluding the pandemic, that we have seen a decline of this magnitude,” he noted.
He also noted that construction is one of the sectors with the strongest production linkages and that its decline affects hardware stores, retail, manufacturing, transportation, employment, and professional services. “When construction slows down, a significant part of the economy slows down. It's a barometer of overall performance,” he stated.
He also argued that the sector's decline is not due to a single factor, but to a combination of elements that created a "perfect storm".
Factors
Among these factors, Ovalles highlighted the accumulated increase in housing costs, which have risen by around 50% since 2019, while household incomes have only grown by about 40%. “That 10% gap represents a loss of purchasing power. And that directly impacts the low-cost housing segment,” he explained.
Added to this are the interest rates, which remain high and limit families' purchasing power. “With high rates and wages that aren't keeping pace with inflation, the pool of potential buyers is shrinking. The local market is under a lot of pressure,” he stated. He noted that, although the diaspora has maintained its demand, this could change if mortgage rates in the United States begin to fall in the coming months.
The economist also mentioned the reputational impact of real estate scams in recent years. Although isolated, he said they have created unease and distrust, especially among foreign buyers. “The diaspora is a key segment. When trust is affected, investment is affected,” he pointed out.
2026, a year of transition
Ovalles insisted that 2026 will be a year of recovery, not expansion. “We won't see a boom, but we will see a sector that stops declining. By mid-year, we could begin to see moderate growth, and by 2027 we could return to previous levels,” he estimated.
