Find out what the real estate market is, its characteristics, and how it works. Learn what real estate analysis is and how it performs in the Dominican Republic.
What is the real estate market?
The real estate market is all economic operations carried out with the aim of acquiring a property and making a profit.
Similarly, the real estate market is influenced by a variety of factors, like geographic location.
Land and anything physically or legally related to it are referred to as real estate or real property.
The deed to the property proves ownership when the property is recorded in the Deeds registry.
The real estate market features or investment keys are:
- Property value.
The supply is the number of homes for sale available to the investor for acquisition.
The Commodity Futures Trading Commission (CFTC) defines the supply as follows:
“An indication of willingness to sell at a given price; opposite of bid, the price level of the offer may be referred to as the ask”.
Demand refers to the amount of housing required on the market at a given price.
The demand driving factors are property structure, income, and population growth.
The land and building market are a key to understanding the development of a country.
Land value is a geographical determinant of real estate market value.
The housing market can be divided into:
- Cold market: a market with a large number of homes for sale. It is ideal for those interested in acquiring property because the offer is broad. And, as a result, it helps with price negotiations.
- Neutral market: it is a market with a balanced offer and demand.
- Hot market: it is a good place for selling properties because of the high concentration of buyers. Indeed, acquirers are willing to pay a higher price than the appraised value.
We can divide the real estate market into the following types:
- Commercial real estate: property used solely for business purposes, like shopping malls, public services, offices, etc.
- Industrial real estate: areas where factories, assembly, distribution, logistics, and other activities are carried out.
- Tourism real estate: homes and hotels.
- Residential real estate: it is the most common type of estate that consists of housing for people. This segment includes homes, apartments, chalets, etc.
Investments of WLHRE in the Dominican Republic mainly focus on the Residential and Tourism market.
The five projects of WLH RE are residential complexes of villas with all the amenities that tenants look for in a property.
WLHRE returns range from 5% (fixed) to 7% (variable).
Foreign investors benefit from returns that are hard to find in other countries, such as customs tax exemptions for some sectors.
Investment facilities make the Dominican Republic an attractive, low-cost destination.
The real estate industry plays a very significant economic role and is becoming increasingly international.
It has a great influence on other sectors, such as construction, especially in new construction areas.
It also indirectly affects other industries, like furniture, decoration, services, etc.
Real estate investment is one of the actions taken relating to the functioning of the real estate market.
It is the option that investors choose to generate financial gain in the long term.
Location is a key factor in real estate transactions.
They have grown exponentially in the Dominican Republic in recent years. This is mainly due to the increase in the country’s wealth.
The International Monetary Fund (IMF) indicates that the average GDP per capita of the Dominican Republic has increased three times, from $2,460 in 2003 to $7,740 in 2021.
The following infographic shows the growth year after year.
It highlights the decline in GDP because of the Covid-19 crisis in 2020.
However, the country has begun to re-float its economy.
A real estate analysis is a detailed investigation that studies the market values.
The data is compared with a particular property that an individual is willing to buy or sell.
Market analysis is different from an appraisal, which is conducted by a professional.
In 2021, housing in Europe will vary in price depending on the country.
The European Housing report for 2021 performed by RE/MAX indicates that it will fall by 5% in Spain and Turkey.
Instead, it will grow by 5% in Norway, Ireland, Germany, Romania, Finland, and the Czech Republic.
As for European territory, the Coronavirus has begun to reduce its impact on housing.
Generally, the real estate sector is experiencing growth. However, it is not homogeneous in European countries.
The Global Report Guide points out that, in 2020, Asia-Pacific gained momentum with New Zealand (+ 16.77%), Sri Lanka (+ 15.45%), and South Korea (+ 8.51%).
The most consistent drops were in the Philippines (-16.11%), Egypt (-14.38%), and Montenegro (-10.45%).
All economic indicators agree that the Dominican Republic is growing in more sectors.
Real estate encouraging data confirms the boosting trend in recent years, ranking as one of the best industries in Central America.
Tourism is one of the key sectors that makes this country an excellent destination for vacations, and also for investments.
This data represents 17% of all visitors from the Caribbean Islands and Central America, positioning the country as a leader in the region.
Strong private investments predict an increase of ten million tourists in the coming years, with a slight downtrend because of the pandemic’s effects on the economy.
On the one hand, Mar e Lago: 28 villas overlooking one of the best golf courses in the country.
On the other hand, Boca Paraiso Beach is located in a very quiet area. It consists of 124 villas and apartments. The complex includes a spa, a swimming pool, and a gym.
The other three projects in process are: Wave, Unique and Portofino.
Wave is located in Punta Cana and consists of 148 houses and apartments.
The Unique complex, with an avant-garde design, is located next to the most beautiful beaches in the Caribbean.
The Portofino project, in Las Terrenas, is made up of 152 buildings.
Boca Paraiso RE includes an international vacation exchange program that enables investors to spend their holidays in resorts around the world.
This initiative allows investors to have a really attractive return on investment.
We can draw the following conclusions from this article about the real estate market:
- Real estate or real property includes land and anything attached to it, physically or legally.
- The supply, demand, and value of the property are the real estate market’s key features.
- The real estate market can be divided into three areas: commercial, industrial, and residential.
- Real estate is a leading indicator in the international economy.
- A real estate analysis is a detailed investigation that studies the market values.