The external context combines a global slowdown and restrictive credit conditions, in contrast to an expanding Dominican economy, according to data from the Central Bank, with a direct impact on the performance of the construction and housing sector
SANTO DOMINGO – The economy of Latin America and the Caribbean will grow by only 2.3% in 2026, in a context of global slowdown marked by geopolitical tensions, persistent inflation and restrictive financial conditions, according to the most recent outlook report from the International Monetary Fund (IMF).
However, the Dominican Republic continues to expand above the regional average, which sustains the dynamism of the real estate sector, albeit under an increasingly challenging external environment.
The IMF warned that global growth is hovering around 3% and could deteriorate if international conflicts intensify, with direct impacts on oil prices, inflation, and the cost of financing.
In that scenario, Reuters reported that the organization warned of a possible shift towards more adverse economic conditions, especially for open economies dependent on external flows.
In contrast, the Dominican economy closed 2025 with growth close to 5%, according to figures from the Central Bank, maintaining one of the strongest performances in the region.
Impact on the real estate sector
By the beginning of 2026, the Central Bank of the Dominican Republic (BCRD) reported that economic activity continued to show expansion, supported by tourism, free trade zones and services, while inflation remained within the target range, around 4%.
This growth differential has been a key support for the local real estate market.
Demand for housing, particularly in the middle and tourist segments, has remained strong, driven by employment, remittances, and foreign investment. However, the new global environment is introducing variables that are beginning to alter the sector's conditions.
The main transmission channel is the cost of money: international interest rates remain high, which makes external financing more expensive and puts upward pressure on local rates, directly impacting mortgage lending and project development, reducing margins and slowing down investment decisions.
Added to this is the sensitivity of the Dominican real estate sector to the external cycle. Any slowdown in the United States or Europe can affect both tourist arrivals and remittances, two factors that influence property demand, especially in destinations like Punta Cana and other coastal areas geared towards foreign investment.
The IMF also warns about financial volatility and the strength of the dollar as risks for emerging markets, and in the Dominican case, this can translate into pressures on the exchange rate and higher costs for imported inputs for construction, from materials to equipment.
Despite these risks, the local real estate market starts from a relatively solid position, supported by macroeconomic stability, above-average regional growth, and a steady flow of foreign investment.
However, the new global cycle suggests a shift in phase: from expansion fueled by abundant liquidity to an environment where selectivity and financial efficiency will be key.
The scenario described by the International Monetary Fund does not anticipate an immediate contraction of economic activity, but it does foresee an environment of lower global growth and tighter financial conditions.
In this context, factors such as high interest rates, greater external volatility, and potential cost pressures could affect the pace of expansion of the Dominican real estate market.
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