Dominican Republic with endless potencial

Investment in real estate for tourism purposes can have an impressive multiplying effect on the national economy. However, in order to successfully achieve it, we must first overcome the short sighted idea that these constructions merely support tourism.

Our country’s tourism potential is well known. In fact, during the last few years we have witnessed aggressive advertising campaigns publicizing the many virtues of the Dominican Republic.

Countless media cable, television, magazines, airlines, documentaries, surround us with the paradise, like images of our country.

Without a doubt, the industry’s growth is known by even the most absent minded Dominican, since it is currently the motor behind our economy.

However, what happens with the tourism real estate potential?

In the beginning, Dominican businessmen in the home construction industry remained indifferent, even ignorant, to the potential of the real estate business linked to tourism. Undeniable proof of this is that the majority of the projects in the previous decades started with foreign capital.

Probably, the vast majority of these investors came for the first time as tourists and, once in the country, identified a market niche completely unexplored and decided to invest in modest residential projects. That demand grew as the Dominican Republic consolidated as a tourism destination.

Real estate takes off

After those first projects, came the planned communities, which responded to the great demand for rooms generated by the tourism explosion. This became known as the “tourism real estate boom” in many areas, most of them linked to the hotel industry.

The growth of the tourism industry and demand for real estate grew so impressively, that in many areas the price of real estate skyrocketed.

Although late, Dominican businessmen opened their eyes to tourism real estate investment, especially in the eastern part of the country. This alternative played
an important role for the local investor, in light of the economic crisis that the country experienced.

Dominican investment involved not only agents directly linked to the construction industry. Other professionals and experts (builders, carpenters, dentists, salesmen, doctors, bankers, etc.) also took advantage of the trend, creating a highly productive chain of economic benefits.


With time, and due to the profitability and continuous growth of real estate demand, other projects of high investment requirements were conceived and targeted towards a more sophisticated and demanding clientele.

These, in turn, helped modest residential projects increase their value and consolidate the market, for the benefit of the entire population.

The key: planning
The real estate boom is not necessarily 100% positive, since it also generated a rise in non planned constructions.

Unfortunately, today we can see these supposedly residential areas located next to a bar, disco, restaurant or entertainment venue.

This goes to show that the initiatives for zoning in certain communities or areas have failed. However, sectors that support the hotel industry feel these zoning efforts could be enough to mitigate the problems we currently face.

IT IS OUR OPPORTUNITY TO DIVERSIFY PRODUCTS AND INCOME!

The tourism real estate sector is an endless source for people who want to find a second home (not to mention that the Dominican Republic offers countless benefits for whoever chooses to live here).

The Law for Foreign Investment, for example, allows the attainment of fresh capital, which is why it’s important that they be placed not only in products, companies or hotels, for instance and be geared towards other interesting aspects of the business. In this sense, the tourism real estate sector not only offers the multiplying effect of tourism – income, jobs, products, trade, etc., but also moves other sectors, such as construction, exports and financial.

Multiplying effect

When a foreigner buys property in the country, his transaction has a positive effect in many ways. The builder and seller, for example, receive the income from the purchase; the government obtains tax money; the lawyer offers his professional services; home furniture stores sell their stock; jobs are created for maintenance personnel for the homes (gardeners, plumbers, maids); etc.

In addition, when these foreigners spend a season in the country, their stay usually extends for a few months, they shop in local stores, visit entertainment venues, open bank accounts to manage their money and invite friends and family to visit them (some of which may end up buying property too). In other words, if we add what remains in the national economy after just one transaction, we can reach the conclusion that its multiplying effect is vital for the entire population.

For that reason, we are all responsible for not limiting our potential. The tourism real estate sector should not be considered a mere support for tourism, or just construction and exports. This is one of the main motors behind national economy!

It is important to plan, because otherwise we are hindering our potential. If we plan to just support the tourism sector, we are focusing in the tree and loosing sight of the forest. When creating new laws, determining densities, permits, zoning, advertising, incentives, etc. we must take into consideration the needs of the real estate sector can both support tourism and developed on its own.
The sky is our limit! After all… we have endless potential!

Meeting with the communities of the Dominican Republic

President Leonel Fernandez proposed a strategic alliance between the State and the different sectors from the country to be able successfully to meet the communities social demands.

Speaking at the start of a meeting of his Cabinet gathered in the northern city, the chief executive said the solution to the current problems isn’t just the Government’s responsibility, in reference to the strikes staged in several provinces across country in the last few weeks.

The meeting with senior officials began at 11 a.m. in the Offices of Provincial Governor, where the ministers of the Economy, Temistocles Montas, and of Hacienda, Vicente Bengoa and Taxes director Juan Hernandez of the measures taken to face the affects of the world financial crisis of the country.

The Cabinet has sparked expectations among business leaders who expect the chief executive to announce the restart of construction on several currently stalled works.