Villa Azurée, a six-bedroom oceanfront estate in Cap Cana, is listed at US$29 million and comes with access to two private cenotes, including one on the property. (Photo: Engel & Völkers Dominican Republic)

The Industry Abroad is REM’s ongoing series looking at how real estate works in other parts of the world. Writer Susan Doran talks to agents, brokers and industry leaders about how their markets compare to ours, from licensing and commissions to listing systems and buyer trends. Past instalments have covered Europe, India, Australia, China, Greenland, New Zealand and Monaco. This time, we head to the Dominican Republic.

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The Dominican Republic wasn’t on the radar as a resort destination a couple of generations ago. There wasn’t a cruise ship in sight along its wild, white-sand shores.

The nation’s tourism industry was kick-started in the 1970s on the easternmost tip of the island when early developers, including Club Med, started clearing the tangled jungle to create the palm-fringed coastal strip of Punta Cana.

Thus began the D.R.’s climb from being a little-known Latin American nation to an all-inclusive global resort machine.

International air connectivity and strong buying power (due to high dollar-to-Dominican-peso exchange rates) continue to help keep foreign money pouring in, while real estate options have broadened.

Today this birthplace of baseball legends is among the Caribbean’s most visited and booming destinations — despite sharing the island of Hispaniola with Haiti, the poorest country in the Western Hemisphere. While Haiti inevitably affects global perceptions of the Dominican in various nuanced ways, they’re completely separate nations.

The border is reportedly so sharply contrasted that it’s visible from space, with lush rainforest on the Dominican side and bare, deforested land across in Haiti.

 

From jungle to property hub

 

The Dominican’s transformation to a popular and comparatively affordable international property hub and golf destination has grown, with development now scattered across the country. The pandemic and the rise of remote work accelerated this, attracting younger generations alongside vacationers, expats, investors and retirees.

The country is experiencing a major surge, driven by record-breaking foreign investment and infrastructure growth.

“Historically, real estate has grown together with tourism,” says Manuel Higuera, CEO of Engel & Völkers Dominican Republic.

The two are closely linked.

“What makes the Dominican Republic unique is that foreigners have the same ownership rights as Dominicans,” explains Higuera. “It’s one of the most open markets in the region.”

While affordability remains a big lure, the luxury segment has also taken off.

Over the past five decades, the country went from a few pioneering resorts to master-planned, premier gated communities like Casa de Campo (famous for its golf courses and megastar visitors like Beyoncé and Jay-Z) and Cap Cana, notes Higuera.

The real estate market is diverse, spanning the tourism hub of Punta Cana and urban centres such as the teeming, historic capital city of Santo Domingo, to less saturated markets like Puerto Plata, Sosúa and Cabarete on the north coast. On the previously unexploited southwest coast, new cruise ports are opening.

Outside the tourist bubble of the resort zones, a basic understanding of Spanish becomes more essential. Caution when driving is also advised. Motorcycles outnumber cars, and traffic signals are treated more like suggestions. Crime is another common tourist concern.

 

How the business works

 

There are no restrictions on foreign buyers, and no residency requirements. To attract investment, property purchased within a project approved by CONFOTUR — the tourism promotion council — is granted various tax exemptions.

“Government policy has been a key growth driver,” says Higuera. “Most foreign buyers pay in cash or through developer payment plans. And most resort transactions are in U.S. dollars.”

Ownership is freehold. Titles are registered with the government. There are increasingly strict anti-money laundering regulations. Agents are generally paid on commission by the seller, often between 3 and 5 per cent, according to Higuera. Commissions in popular tourist areas can be much higher.

There are many similarities to the industry in North America, with a big exception being that as yet there is no mandatory licensing or education for agents. The government is actively moving toward improved regulation.

“There are very professional international and local brokerages,” says Higuera. “At the same time, the lack of mandatory licensing has allowed some informal operators who do not follow proper practices, and they sometimes hurt the image of the industry.”

There’s no standardized multiple listing system. Open listings are common. Agents may find the market fragmented.

“Cooperation between agents is important, but the availability and accuracy of information can vary,” observes Yolanda Tejeda, with Sotheby’s International Realty Dominican Republic, partnering with Andy Taylor, a Sotheby’s vice-president in Canada.

Buyers should work with an independent Dominican lawyer to verify title, permits and so on. A good agent needs to coordinate effectively with various experts, Tejeda stresses.

“The role is not simply about showing properties.”

Contrary to popular belief, “the job is not necessarily more relaxed than in North America,” she continues. “In the luxury market especially, clients expect a high level of responsiveness and personal attention.”

The reality is that weekends and holidays can be the busiest days, with international clients often using their vacations to visit properties.

 

Not as cheap as you think

 

Another misconception is that the entire D.R. is dirt-cheap.

It can offer “considerably more space and lifestyle amenities for the money than many major North American markets,” Tejeda concedes. But “it’s misleading to describe the entire country as inexpensive.”

Sol Aufiero, CEO of Century 21 Sunsets in the Dominican, concurs that while buyers often get more bang for their buck than in North America, prices range dramatically.

“In areas like La Romana and Bayahibe, you can find investment opportunities starting at approximately US60,000toUS70,000. At the other end of the spectrum, exclusive communities such as Casa de Campo have villas worth several million dollars, with some properties exceeding US$30 million.”

Rentals are just as varied, he says, ranging from US400permonthtoUS20,000 or more.

The foreign buyer profile has evolved, he finds. Buyers are more analytical and more interested in long-term value.

“They’re no longer buying just for the sunshine, beaches and palm trees.”

It’s a market full of opportunity, says Aufiero, with clients from “North America, Europe, Latin America, the Dominican diaspora,” and elsewhere.

“We’ve made tremendous progress in development, infrastructure, and international visibility. Now I believe we face an equally important challenge matching that growth with higher professional standards.”