Real Estate Trends in Las Terrenas:
Post-COVID Market Insights
Las Terrenas has experienced a surge in real estate demand in the post-COVID era, paralleling the Dominican Republic’s consistent annual tourism growth of 10% from 2020 to 2023. Notably, 40% of visitors were from the USA, and 15% from Canada, underscoring North Americans’ keen interest in exploring and investing in the Dominican Republic.
The heightened demand since 2020 has driven property values up and spurred the development of new residential projects, not only within Las Terrenas but also in its outskirts. Over the period 2020-2023, real estate prices appreciated by an average of 10% annually.
2023 Real Estate Review:
Low Inventory and Higher Interest Rates
Despite the upward trend continuing at the start 2023, a decrease in real estate transactions was observed, primarily due to a low inventory. In a low inventory market, buyers must act swiftly, as homes don’t linger on the market for long.
Another contributing factor to the sales slowdown in 2023 was the overall higher price tags and increased mortgage interest rates, impacting non-cash buyers and those with limited budgets.
The second half of 2023 has seen prices stabilize and the real estate offer catching up with the demand.
So what can we expect in 2024?
Real Estate Trends in 2024:
Stability and Luxury Development
In 2024, the real estate market in Las Terrenas will regain balance, with supply catching up to demand. Prices already stabilized on new constructions, and a decrease of 5% to 10% was observed in older buildings in the second half of 2023.
Notably, large investments are occurring in the outskirts of Las Terrenas and in emerging areas like El Limon and Las Galeras.
Another significant trend in Las Terrenas is the rise of luxury real estate, attracting ultra-high-net-worth individuals and real estate groups seeking high-end properties to park cash as a hedge against inflation and with strong appreciation potential. Waterfront and first-line hills properties are the go-to investment targets.
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Tips for Buyers in 2024
1. Secure a good location, whether near the beach or town amenities, for optimal rental returns and quicker resale.
2. Look for properties with potential:
- in upcoming areas,
- new projects at entry prices below market,
- or flipping opportunitites, renovate and refurbish
3. Consider buying land and building, as construction remains an effective way to capitalize on real estate with the potential for substantial gains.
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Market values in 2024
1- Land Values
– Developed areas near the beach average $200 per square meter.
– Beachfront land is scarce, priced at a minimum of $500 per square meter.
– Large beachfront parcels for tourism development range from $150 to $200 per square meter.
– Hilltop land with ocean views in 2024 ranges from $50 to $100 per square meter.
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2- Real Estate Price per m2
– Resale price: $1,300 to $1,500 per m2 for older buildings, $2,000 to $2,500 per m2 for new constructions.
– Construction costs: $900 to $1,200 per square meter.
3- Rental Rates
– 1-bedroom apartments: $60-100 per night, yielding $1,200 monthly net return.
– 2-bedroom apartments: $100-150 per night, yielding $1,500-2,000 monthly net return.
– 3-bedroom villas: $250-350 per night, yielding $4,000-5,000 monthly net return.
Consider Purchasing on Plans in New Projects
For medium to long-term investments, buying on plans offers the following benefits:
- attractive entry prices
- tax incentives
- immediate capital gains
- better building standards
- payment installments
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Conclusion
In the post-COVID era, Las Terrenas’ real estate demand surged alongside a 10% annual tourism growth from 2020 to 2023. Despite 2023’s challenges, the market stabilized in late 2023. Anticipating 2024, luxury real estate is rising and overall home prices are steadier. Opportunities lie in real estate with POTENTIAL. Strategic buyers focus on well-located properties, emerging areas, and land for construction.
Contact Ocean Edge Agency for personalized advice and explore the latest opportunities in Las Terrenas.
Kind greetings from the Ocean Edge Team!
