What is the Punta Cana Real Estate Market Like?
The Punta Cana and Bavaro areas on the East Coast of the DR are considered one of the fastest growing markets in the Caribbean! Post-construction property rates are still appreciating better than the entire international market averages. Pre-construction/ or under-construction properties are appreciating even faster due to the nice "early-bird" discounts the Developers often provide. Higher for a larger upfront payment (more than 20% down). Some investors buy 2 or more properties for additional discounts. One to own personally, and a 2nd to leverage as a vacation rental, or flip for a higher price a few months later. Recently 2020 – current, several well-funded investors are buying complete condo buildings (or blocks) from the builders and “flipping” for a modest, but quick gain once the builder’s inventory is sold out. Around 12% - 20% ROI in a short period of time; 12 – 18 months.
Migration to Punta Cana has been incredible! The worldwide frustrations caused by the pandemic, government control, wars, and economic inflation have contributed to worldwide migration since early 2021. Considering Punta Cana has less Covid cases, a stable government, near perfect weather year-round, Punta Cana and Bavaro have become a key destinations in the Caribbean... evidenced through record-breaking sales and new construction. Some owners have taken their properties off the market, with a new decision to keep their "landing pad" in case they need to relocate here on a more permanent basis, many sellers increased their prices... "Owner Financing Properties sold first, and other owners took away this “flat market” Incentive. Even pre and under-construction properties a walk to the beach are now nearly SOLD OUT!
Owners leveraging their properties as a vacation rental, are now forced to lower their prices to due to all the completed New Construction competition, however, the tourist demand continues to increase to offset this variable. 2022 has shown record-breaking sales by all agencies, and 2023 looks even more promising for even rental occupancies.
How Big Is the Dominican Republic? And why the fuss in the Punta Cana an Bavaro areas?
The Dominican Republic (recorded) population as of 2021 is nearly 11,300,000. Punta Cana and Bavaro are growing rapidly. Today, the area has an estimated population of 110,000. The region covers approximately 1,100 acres and is more like a collection of small communities rather than a city. Currently from Punta Cana, to Bavaro and Uvero Alto, there are over 52 all-inclusive resorts and numerous residential communities stretched over 30 miles of beautiful beaches.
Reliable Realty DR primarily promotes properties in the most popular and reputable beach-town communities within Bavaro called Los Corales and El Cortecito. More HGTV episodes have been filmed in these safe and friendly neighborhoods. Properties are considered “in the beach-town areas” if they are located within a 6–15-minute walk to the various public beach accesses, and within a 2–18-minute walk to the beach-town commercial centers These commercial centers offer an array of excellent international dining options, bars, grocery stores, ATM’s, pharmacies, cute boutique shops, salons-massage places, cash exchanges, Dentists, small medical clinics, and other needed services.
We also represent residential communities within Championship golf courses of Cocotal Golf and Country Club, Punta Cana Village and Resort, Cap Cana, and Cana Bay / Hard Rock Hotel (golf and beach). As well as the impressive Downtown Punta Cana area, ideally located between Bavaro and Punta Cana known for its malls and outstanding restaurants. Several new residential communities (houses and condos) have been constructed from 2018 to current, with more under construction now. Downtown Punta Cana has been a top selling area since 2019, despite the fact it is located about a 15-minute drive to the closest beach in Cabezza del Toro.
Other expanding areas of Bavaro include White Sands, with its beautiful beaches, and Macao (between Bavaro and Uvero Alto). Due to the new Dreams Resort in Macao, the agricultural land directly behind Macao beach has doubled in price from 2021 - 2022, with several new construction developments emerging (2022).
La Romana, located a 45-minute drive from Punta Cana, has become a favorite destination as well for executive homes in luxury communities like Casa de Campo. We are slowly expanding our interest and expertise into the Constanza and Jarabacoa area mountainous areas as well. Please see all our listings.
What’s the average cost of properties in Punta Cana and Bavaro?
We have and can assist in all price ranges (or budgets) from $55,000 U.S. to in the $$$millions. The average price really depends on what the prospective buyer is looking for and can spend. Our top selling properties are located on or near the beach. Ocean view condos are more expensive than those condos situated across the street from the beach with no ocean view, but a short walk to the beach.
As of 2022, prospective Buyers can currently anticipate a furnished, 2BR/ 2Bathroom condo, around 1250 sq. ft. (average) will now cost around $165,000. Bavaro and Punta Cana no longer have a flat market, therefore, Sellers are not as eager to offer direct owner financing as a buying incentive; although we do have a hand full of condos priced over $290,000 properties with owner financing. Typical terms are 50% down, for 5 years, at 5% - but can be negotiated slightly to meet the Purchasers abilities and the Seller’s needs.
Most of our Buyers purchase condos as vacation homes which they leverage as a short-term vacation rental until they can retire here more on a full-time basis. You cannot buy a 2-bedroom condo a walk to the beach for under $127,000 anymore! $55,000 - $120,000 prices are for properties further from the beach like in Veron, or Ejecutivo. Communities located a 8-20 minute drive away.
NOTE: By mid-2022, nearly all resale properties, as well as new construction properties located in the beach-towns SOLD, with prices of remaining inventory rising quickly. We are slowly picking up more property listings now (late 2022), however, due to supply and demand, the list prices have increased from 2019 to current by an average of 15%.
Later, several of our owner clients decide to sell their condos near the beach, and if they then plan to live here on a more full-time basis, this is when they buy or have built a single-family home (villa), even if it is located a further distance to the beach. They can do this because they will have a vehicle once they live here longer. Single family homes (or villas as the call them here) vary in price and the residential community. A villa community within a championship golf course, offering a private beach club will obviously be more expensive than a villa built in a residential community with a single community shared swimming pool. If you plan to reside here more than 6 months a year, please ask us for our advice on the best neighborhood for you.
What Can New Owners Expect with New Construction?
Purchasers receive a well-constructed, solid concrete block construction, with all the fixtures. Some developers offer a basic appliance package. Many builders offer split air conditioners. Others charge extra for this, but the walls are prepped / plumbed to easily add air conditioners. Split air conditioners are more common, as they are more affordable to replace or repair than central air conditioning. All light fixtures, ceiling fans are the purchaser’s decision and at their cost. All condos are situated within beautiful, gated condo communities with a pool and often other onsite bonus amenities. Whereas most resale properties for sale in the beach-towns come furnished. Mid-priced furnishings run around $25,000 for a 1200 sq. ft. condo, including décor, linens, window treatments and home accessories.
Aren't all Real Estate Agencies similar? Aren't they all licensed and regulated like in North America?
Real estate agents in the Dominican Republic are not yet required to be licensed and their activities are not always regulated by the government if they do not have a legal Registered tax-paying Corporation here. Always ask your agent or agency if they have an RNC (taxpayer identification). It is best to seek the assistance of a reputable and well-established real estate agency who is legally registered, knowledgeable about the current real estate market and trends, who understand the Dominican Republic Real Estate Laws, and who has a network of reputable legal attorneys who specialize in Real Estate, Residency, and Tax laws, to assure prompt and seamless sales transaction, all the way to the property title in your name. Those attempting to buy real estate on their own to save costs, often end up paying more for the property, with a much longer sales process, and numerous headaches. It is always advisable to work through a trusted agency.
Do foreigners need to be residents of the DR to buy properties?
There are no restrictions for foreigners buying properties in the Dominican Republic. You receive a freehold title in your name and have the same rights as any landowner in the Dominican Republic. Foreigners do not need to be residents, although there are government incentives for being one. Because this area has grown so fast, the Register of Deeds is taking longer to process the titles, around 2-3 months. Titles always come to our purchasers. In the interim, no worries...your legalized / notarized Definitive Purchase Contract is honored as proof of ownership until your actual individual title is processed and received.
What is the procedure for buying properties in the DR if you are North American (English speaking only)?
The process isn't difficult when you use a reputable Realtor / Broker and Attorney. Your agency must be experienced and knowledgeable about Real Estate here. Responsive, trustworthy, and should obviously speak English, but also Spanish. A reputable and legal Real Estate Agency can refer a good Attorney versed in Real Estate; and if you are planning to operate or open a business, your agency should assist in referring a reputable and experienced Accountant. English speaking professionals who possess an understanding of the North American culture and expectations are who we work with and can refer. For our Agencies Step-by-Step Sales Process please contact us. Sorry, we no longer provide free online education from our website to other newbie piggy-back agencies.
What if I want to rent out my property? Can I make enough income to cover my cost of ownership?
Many buyers rent out their properties to vacationers and long-term renters. This income will cover all, or at least a good portion of your costs of ownership (assuming there are no worldwide events... like a pandemic) that affect the average booking stats, due to other countries imposing challenges for vacationers to travel here with ease.
What can I expect to pay in property taxes?
One of the best incentives offered by the Dominican Government to foreign investors is Tax Abatement law #151, which basically states that you are exempt from paying property taxes for 15 years on property purchases that fall under 7.4 million pesos. The peso to U.S. Dollar exchange rate over the past 7 years has remained consistent, meaning property assessed values (or IPI Valuations) equating to approximately $126,000 -$147,000. IPI values have been rising over the past few years, but on an average equate to around 60% - 75% of the properties actual Selling Price. Meaning you could buy a property for around $240,000 (as of 2021) and you MAY still qualify for this property tax exemption for up to 15 years. The representing Attorney will find out what the IPI (or assessed) valuation is once the Purchase Offer is signed by the Parties. This report takes around 2-5 days to receive.
If the property IPI valuation is over the approx. 9 million pesos, the annual property tax is only 1% of the IPI valuation. Very affordable.
The newest Tax incentive offered by the government is called CONFORTUR. Many New Construction Developments have qualified for this new tax incentive. In a nutshell, the development must be in a touristic designated zone (near the resorts). Numerous requirements: i.e. (short list) the buildings must be built to withstand hurricanes, and up to a #7 earthquake, they must have elevators and steps, ADA compliant for the disabled, there must be an onsite lobby and full-time security and Administration onsite for all incoming and outgoing personnel, additional Safety, hazard inspections, additional parking spaces, a swimming pool, and other onsite bonus amenities, beach access, health, and safety certifications. In general, the New Development must operate like a resort. Those New Construction Developments that do qualify (check with our agency first) are exempt from the onetime 3% title transfer tax, and are guaranteed the 15-year Property Tax Exemption, regardless if the IPI (or Assessed value) is higher than 9.4 million pesos. This tax exemption status is not transferrable to the second buyer (on a resale).
What taxes, fees and closing costs are involved when acquiring property in the DR?
There are very few fees involved with buying a property in the DR. On average, the legal fees and the onetime 3% title transfer tax could amount to around 3.5% - 4.5% of the property purchase price. Closing costs include all attorney fees, title registration, and the onetime 3% government title transfer tax.
What about Property Insurance?
Full Homeowners Insurance can be purchased for 1% of the purchase price (including tax). Homeowners insurance covers fire, earthquakes, hurricanes and flood damage, theft, furnishings, tenant liability and much more. You can purchase property insurance once the Definitive or Final contract is signed, and the Sellers have confirmed receipt of their proceeds from the sale. Our agency can provide 3 quotes from the top and most reputable insurance companies here.
Is there Title Insurance available, and is it recommended?
You can buy Title Insurance. Stewart Title is here in the DR. They have been established in the DR for many years and provide title and closing services, as well as dependable title insurance and escrow services. However, Title Insurance in most cases is redundant to what the Sales Contracts already guarantee, so we don't always recommend title insurance, as it is viewed as paying twice for the same guarantees. Please check with our agency if the property you are considering is one, we do recommend Title Insurance.
What about condo fees?
Condo fees vary by the complex or condo/ villa community. Generally (as of 2021) they average around $110.00 - $125.00 U.S. per month for a one (1) bedroom condo; $-160.00 - $225.00 U.S. per month for a two-bedroom condo... these are the average HOA fees for condos in communities located across the street from the beach (6–10-minute walk). Condo or HOA fees are about 2.5 times higher for a property located inside a beachfront condo community, and for an actual single-family house (or villa) within a golf course that also has an owner’s beach club, perhaps a 5–20-minute drive away.
The HOA fees include maintenance of the grounds and pool, 24-hour security, community lighting, and misc. exterior bldg. repairs, water, trash disposal, weekly fumigation (for mosquitos/ bugs), and sometimes propane gas for gas dryers and gas stove/ovens. For Beachfront condo communities, or properties within a golf-course community, there is an additional fee that includes maintenance of the golf course, private beach-club, costs to support an onsite restaurant, personal pool, and ground maintenance (for a yard), and perhaps a fitness center/ gym, etc.
What about bequeathing real estate to my children?
There are no restrictions on foreigners bequeathing titles of real estate property in the DR to their children. The property will automatically go to the children of the Owners, (covered in the Sales Contracts), unless there is a legalized WILL established in your country that names a different person. Legal married spouses must be included in all real estate purchases. If one partner passes on, the spouse will inherit the property. If both owners pass on, the property is passed to the children. No worries about the government here taking the property or probate courts. It is recommended all purchasers establish a WILL with inclusion of this property.
Inheritance taxes for beneficiaries who reside here have been lowered to 3% of the appraised value of the estate. If the beneficiary resides outside the DR, inheritance taxes are 4.5%.
How do I find the right property and community?
Complete our PROPERTY QUESTIONNAIRE so we can narrow down the very best options for you based on your budget, preferred location (if known), and other criteria’s.
ANSWERS TO OTHER COMMON QUESTIONS/ CONCERNS:
Can I become a resident of the DR and still retain citizenship in my home country? YES. You can have dual citizenship with little or no restrictions (check with your home country). The cost (as of 2020) is around $2,500 per person for an English- Spanish Speaking Attorney who will assist in all requirements. Per person discounts offered for couples and/ or families securing residency at the same time.
Is it safe there?
YES INDEED. See "The Low Crime Rates" in Why Buy in Punta Cana; Additionally the Bavaro beach-town areas and other gated golf course communities have become very nice "safe havens" eliminating the worldwide pandemic affects from the Covid-19 (i.e. riots, looting, government control - strict mask requirements, etc.). Yes, masks are required here for larger groups, and inside businesses (i.e. grocery stores). Quick electronic temperature ck's, and hand sanitizers are provided upon entrance. However, beaches, golf courses, tennis courts, and restaurants are open, inside and outside, with the required social distancing requirements.
Is Punta Cana very developed in terms of infrastructure, technology, etc?
Yes, for the past 5 years Punta Cana and Bavaro have been ranked in the top 3 as one of the fastest growing areas in the Caribbean (per the GDP). The newer DOWNTOWN PUNTA CANA area has helped bridge the infrastructure between the 2 main cities of Punta Cana and Bavaro and is considered another hot booming real estate area since 2016.
What are the Hospitals/ Clinics, and Healthcare like? Is Healthcare affordable?
Hospitals are very good and getting better annually. Hospitals (or Clinics) do have their specialties. Details coming soon!