Customers who refuse to accept the price increases are being given refunds, which is generating discontent and, in some cases, threats of lawsuits
SANTO DOMINGO– The price increases in the construction sector are not only a concern for developers and suppliers of industry materials. Real estate agents, as intermediaries in these projects, are also worried.
And when it comes to price increases, especially in the housing sector, many clients don't consider the arguments put forward about the consequences of COVID-19, because buying a house is not a casual step, it's a planned act that demands a high level of commitment from the parties involved.
The current situation has tested the skills of real estate brokers in the face of the price instability that has plagued the construction sector and threatens not to end, given that the slowdown does not depend on the national market.
“There is a delicate situation because it mainly affects buyers and builders, especially those involved in affordable housing projects. The middle class and tourists can better handle price increases and adjustments,” explains Claudia Castillo, former president of the Association of Real Estate Agencies and Companies (AEI), and general manager of Top Inmobiliario.
He is saddened by the situation, knowing that Dominicans do their best to buy a house and have security, for which they plan and organize. "And in many cases, I've seen their concern about not having the resources and their chances slipping away if they can't reach an agreement, and that's where the complexity arises.".
Undoubtedly, the most vulnerable sector is where the rope breaks. And the testimony of Yaneisy Rosso, from Time Home, makes this clear. “The situation I’ve experienced is that I work in the low-cost housing trust sector, and what has happened is that a person used to need an income of between 50,000 and 60,000 pesos to qualify. With the excessive increases that have occurred, that same client now has to earn between 80,000 and 100,000 pesos to be able to finance the cost.”.
It understands that both agents and acquirers go through a tedious process, faced with the reality of the market, whose responsibility escapes the national sphere.
A different situation has occurred in the tourist real estate market, where there has been a significant increase in demand, from simple apartments to desirable villas. This is explained by the fact that the coronavirus pandemic led many people to prefer larger spaces where they can be in contact with nature.
Victor Garcia, from VG Inmobiliaria, describes his experience during the COVID-19 era.
“Some construction companies have stopped selling while they conduct cost studies given the situation, others have increased prices by 10 to 15% and customers who have already bought are adding an increase.”.
Some who refuse to accept the increase are returning their money; these are the ones who present the most problems with dissatisfaction and lawsuits. The experienced agent, with 15 years in the business, explains that although the increase is justified, not all clients understand it because they claim they already have a signed contract.
The reflection of the executive at Top Inmobiliaria, an architect and appraiser with 25 years of experience, is that the government must take measures, even if only temporary, until the market stabilizes. She suggests making ITBIS (Value Added Tax) and fee payments more flexible for a few months, and suspending or lowering the property transfer tax, or setting a lower amount, at least for a year.
“We represent both construction companies and clients, and we mediate in the best way possible to ensure projects don't stall. Therefore, we must motivate clients and find solutions. We understand the situation of the construction companies, but we are a sector that values compromise, and our association is available to attend meetings to find solutions.”.
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