The New Reality of Dominican Republic Real Estate
Just my observation, giving you a rough idea of the rental market and buying real estate in the Dominican Republic.
I'm always keeping a close eye on the local real estate market to stay on top of any new changes. In the Dominican Republic, real estate prices are constantly in flux.
Recently, there's been some new policy changes in the rental market, and it looks like things are about to get shaken up.
Dominican Republic new rental rules
The Dominican Republic is currently in the process of implementing new proposed legislation that will affect the rental market and landlord-tenant relationships.
Eviction Process: A new specialized Justice of the Peace Court will handle rental and eviction cases, issuing rulings within a maximum of 30 business days.
Goodbye and good riddance to squatters. The new system provides a much faster process for property owners to regain possession.
Rental Contracts: Rental agreements must now be in writing and include details like the identity of the parties, property description, and payment terms.
It also prohibits discriminatory language in rental listings, such as “no children” or “I don’t rent to foreigners”
Deposits: Rental security deposits must now be paid directly into a designated account at the Banco de Reservas (Reserve Bank)
Tenants no longer pay more than two months rent (deposits) and landlords are responsible for depositing the funds.
Short Term Rentals: The government will begin to regulate and tax platforms like Airbnb
Annual Rent Increase Cap: Landlords cannot increase rent by more than 10% of the previous amount, unless otherwise agreed upon by both parties.
Rising Rent, Rising Tensions
In most of the more affluent areas of the Dominican Republic, rental prices have been slowly climbing over the last few years. The good news is, for the most part, the rent spikes haven't been too significant.
I noticed a handful of sizable two-bedroom apartments that were a cool $500 per month (USD) the year before, and now they're listed at $550 (USD). From what I'm seeing, rent across the board has gone up an extra $50 - $150 (USD).
Not everyone sees this the same way. Some people won't care, while others will see it as a serious problem. Change is never easy.
A big reason for this is the competition from Airbnb. Many landlords are now listing their properties on these short-term platforms instead, looking for bigger profit margins. If this trend gets out of hand, it could lead to higher rents and gentrification.
The Land vs. The House Paradox
While I can't speak for the entire island, what I've been seeing on the North Coast is a bit confusing. Land prices are climbing up, while house prices are trending down.
I imagine land prices are climbing because all the new projects being built are making prime land more scarce. In turn, there might be too many homes being built and not enough buyers, pushing owners to lower their asking prices.
Another factor could be the fact that interest rates remain high in North America, which is keeping potential buyers on the sidelines.
From my observation, land is selling pretty quickly, while houses are moving much slower. It's really becoming a buyer's market for homes.
It's a dynamic and evolving market, and I'll be keeping a close eye on it to see how these changes unfold.
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