Dominican Republic, favorite destination of new real estate and hotel investments

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Dominican Republic, favorite destination of new real estate and hotel investments
Mon May 13, 2019

The constant increase in tourist arrivals, the positive performance of the economy, the incentives and the wide portfolio of real estate investment options attract local and foreign investors


Due to its strategic location, favorable economic expectations and the dynamism of the tourism sector, the Dominican Republic continues to consolidate itself as the favorite destination for real estate investments in the Caribbean, as reflected by the concentration of both residential real estate and hotel projects.

"Foreign investors are attracted by the country's growth, legal security and good levels of profitability," says Magaly Toribio, Marketing Advisor of the Ministry of Tourism of the Dominican Republic (MITUR). "In addition to the attractiveness of its beaches and natural beauty, the positioning of the Dominican Republic as a destination for culture and history has multiplied the arrival of visitors and, with it, the opportunities for investors in different parts of the country due to the greater demand for lodging. "

The latest report of the World Bank notes that "the Dominican Republic has experienced strong economic growth in recent years, with an average of 5.1% per year between 2008 and 2018, the second highest in Latin America." He adds that this rhythm "accelerated to an average of 6.6% per year between 2014 and 2018", which made the Dominican Republic the economy of the fastest growing region in that period.

Both the developers of residential properties and the large hotel companies have taken note of the increasing arrival of foreign tourists -reflected in the expansion of direct international flights- and of the important public investments that have been made to improve the support infrastructure in the different tourist destinations, especially in terms of roads and sanitation.

In 2018, the arrival of foreign visitors by air registered an increase of 6.2%, reaching the record figure of 6.6 million, while the income in foreign currency generated by tourism increased 5.3% with respect to 2017, standing at around US $ 7,560 million. In the first quarter of this year, meanwhile, the country has already received 1,876,177 tourists, which represents an interannual increase of 4.6%.

These favorable perspectives have translated into an increase in the inflow of capital into the real estate market to expand and improve the offer of accommodation services. According to official figures, between 2007 and 2018 the hotel beds registered an average annual growth of 2.3%, with an occupancy level of over 83% in 2017.

According to the Tourist Barometer data elaborated by MITUR, only in 2018, the Tourism Promotion Council (CONFOTUR) approved the classification of 65 tourist projects with an investment that

around US $ 3,057 million, which will provide some 15,458 new rooms. In addition, nine hotel facilities, six extensions and ten real estate-tourism projects were inaugurated last year.

In addition to national capitals, the interest of foreigners to invest in the Dominican real estate sector is growing, with investments from Spanish, US, Venezuelan, Panamanian, Canadian and Italian origin, among others.

One of the most popular real estate investments for foreign buyers is to acquire - and rent while not in use - a villa, apartment or condominium in the tourist area that best suits your interests, whether you are looking for a quiet place by the sea or a with easy access to downtown areas. Surrounded by the best golf courses and some of the best beaches in the world, Punta Cana is the preferred destination for investors, although there are excellent profitable developments in La Romana, Bayahibe, Samana, Puerto Plata, Juan Dolio, Jarabacoa, Miches and Santo Sunday. The profitability of renting a villa or apartment ranges between 7 and 11%, and even more, depending on the occupation.

The Dominican legal framework also attracts attractiveness. The Law for the Promotion of Tourism Development (Number 158-01), for example, establishes incentives and tax benefits, including the exemption of municipal and national taxes for 15 years, to individuals or corporations domiciled in the country they undertake, promote or invest capital in certain tourist poles with great potential, among them Barahona, Samaná, Pedernales, Constanza and Jarabacoa. For its part, the Foreign Investment Law (Number 16-95), grants equal rights and obligations in investment matters to Dominicans and foreigners.


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