When blows out the "Condominium-bubble" in the area of Cabarete ?

[moonzulu]

The original post was correct, in my opinion. Condos in Cabarete have been overbuilt. Moreover, once a project is approved and has financing, no builder ever stops, so more condos are being piled onto an overbuilt market.

Proof? Well, nothing is every "provable" without perfect information, but when you consider that 100% of Ocean Dream, Harmony and One are sold, but the majority of apartments are unfurnished, unrented and un-lived in, it is a fair guess that they were bought on spec.

At the same time, the single family house market, particular near decent beaches, is quite strong.

There is truth in most of the posts. The hotel/all inclusive market is declining, while the residential market is very healthy. Restaurants, bars and Sosua in general is suffering economically, while Playero and the ferreterias are full -- people who have moved here, full or part-time, cook at home and fix things.

Lots of markets get temporarily overbuilt. The condos will suffer a substantial drop in price, but will be purchased at those lower prices over time. Those who bought to live in them don't care; those who bought to flip will get flipped out of them at a loss.

Long term, the DR is cheaper and arguably not much less safe than most other Caribbean islands, and certainly much friendlier than most. Real estate island-wide is in a long term uptrend that will continue as the U.S. and Europe become more expensive and people live longer, many without pension funds to live comfortably in their native countries when they stop workings. Its a structural trend that will go on for a generation, and only the really short term investors need to worry about getting burned. In the next two years or so, some of the weak hands will definitely get forced out at a loss.

My 2 cents.

[bart6]

not sure why people arent mentioning the simple facts that the higher prices are based on the higher standard of the new developments being built and that when there is a critical mass of wealthier people in town the services will simply follow. ie hospital coming to sosua,

for instance it wont be long after the new developments get built in cabarete east before someone adds a big supermarket out that direction.

cabarete will be good for the duration if it gets the bypass.

[Rocky]

Extreme taxation and losses of liberty are driving folks to reside in the Caribbean. The DR is still one of the cheapest options, and it is a lot more attractive than most other islands for a myriad of reasons.
Coastal real estate will continue to rise until it approaches Caribbean standards.
As little as 17 years ago, we didn't have cablevision, cellphones, internet and the cars/trucks were so expensive that there was less than 5% of the vehicles that we now have on the road.
The DR is coming into the 20th/21st century and it's progressing in leaps and bounds, and RE is following along with it.

[cobraboy]

Originally Posted by Rocky

Extreme taxation and losses of liberty are driving folks to reside in the Caribbean. The DR is still one of the cheapest options, and it is a lot more attractive than most other islands for a myriad of reasons.
Coastal real estate will continue to rise until it approaches Caribbean standards.
As little as 17 years ago, we didn't have cablevision, cellphones, internet and the cars/trucks were so expensive that there was less than 5% of the vehicles that we now have on the road.
The DR is coming into the 20th/21st century and it's progressing in leaps and bounds, and RE is following along with it.

I agree fully. The DR is growing up.

[PICHARDO]

Originally Posted by financial analyst

The US real estate bubble blows out with a big bang the last months. The buildings of private houses crashes since around one year. The old FED-Präsident Mr Greenspan said 2 times in the last weeks that he fears also an economic recession.

In the area of Cabarete also are many signs for a Condominium-bubble:
1. The last 1 or 2 Jahr were built around 5 times more Condos than the hole 10 years before.
2. On around every second corner starts a new Condo-project.
3. Around 99% of all new buildings are Condos.
4. The prices have grown around 4-5 time higher then before 10 years and are for an developing country of the lower level like the D.R. very high.
5. Many speculators are in the market and buying with credits, the think they can make the fast money.
6. Cabarete has now more real estate brokers then supermarkets
7. Many Investors think that they can rent the Condos easy on the other side big hotels like the Barcelo are closing and were distroyed because the have no guests.

For me the question is only when the bubble blows out.

Let me dispel all your "like USA burst" notions regarding the co-op market of the DR...

Unlike in the USA the DR's RE market is driven by cold hard cash "currency" not the other way around...

The deposit most developers require from would be owners to get a first dibs on the unit, is pretty much their bottom line to pull together enough liquid to bring the rough structure to life...

Forget flooring tiles, paint, stucco, light fixtures, rails, cabinets, doors, etc... We're talking cinder blocks and mortar fixed as one...

The buyers who can't close the deal just paid for the main frame (so to speak) for the builder/developer. Who in that case will be able to profit even more from the unsold units unlike before!

The RE Market of the DR is CASH not IOYs like in the USA...

If you have a strong heart and do get a mortgage in the DR for buying property, paying over 23% and more yearly rates is not biz smarts...

The real problem with the explosive co-op developments in the area is nothing more than the same obsolete phenomena that hurt the PC industry at the peak of the market.

New buildings are coming up that put the just recently built to shame in comparison, taking the designs under account.

Most buildings erected just some 5 years ago, look like they were part of the Tony Montana's movie extras when compared to the new ones just around the corners...

The RE market of the DR is solid until the Banks start to lend money as in the USA. Sub prime mortgages, no down payments, little proof of income, etc... Until then, the RE market is flourishing and continues to be stronger as more and more foreign investors realize that no matter the odds, in the DR, RE property NEVER devaluates at all...

For most foreigners that come to the DR and see how much they can extend their currency here, making the move is common sense once income can be assured in the DR.

The main problem of 90% of foreigners that make the move to the DR is that they tend to settle in the coastal cities (campos) instead of heading to the interior (best services/value) for their money. They end up paying 5 times the going rate of the equivalent in the interior cities, just to live too close to the beach...

In the DR there's no bubble to burst, unless of course, is the one you'll blow after chewing "Chicles Adams"...

[PICHARDO]

Originally Posted by moonzulu

The original post was correct, in my opinion. Condos in Cabarete have been overbuilt. Moreover, once a project is approved and has financing, no builder ever stops, so more condos are being piled onto an overbuilt market.

Proof? Well, nothing is every "provable" without perfect information, but when you consider that 100% of Ocean Dream, Harmony and One are sold, but the majority of apartments are unfurnished, unrented and un-lived in, it is a fair guess that they were bought on spec.

I own apartments in several locations of the DR and only visit there when to the beach with family or friends...

Your point is?

At the same time, the single family house market, particular near decent beaches, is quite strong.

Always been!

There is truth in most of the posts. The hotel/all inclusive market is declining, while the residential market is very healthy. Restaurants, bars and Sosua in general is suffering economically, while Playero and the ferreterias are full -- people who have moved here, full or part-time, cook at home and fix things.

Lots of markets get temporarily overbuilt. The condos will suffer a substantial drop in price, but will be purchased at those lower prices over time. Those who bought to live in them don't care; those who bought to flip will get flipped out of them at a loss.

Let me know when this happens so that I could pay below market and then some for some of them!!! Never gonna happen!!!!

Long term, the DR is cheaper and arguably not much less safe than most other Caribbean islands, and certainly much friendlier than most. Real estate island-wide is in a long term uptrend that will continue as the U.S. and Europe become more expensive and people live longer, many without pension funds to live comfortably in their native countries when they stop workings. Its a structural trend that will go on for a generation, and only the really short term investors need to worry about getting burned. In the next two years or so, some of the weak hands will definitely get forced out at a loss.

My 2 cents.

Check my two Dominican cents in RED...

[liam1]

i rent an oceanfront/ocean view, everything 1st class apartment and have been here for 5-6 months, when i signed the rental contract i was told if there are any interested buyers i would be obligated to let them in to see the place. so far (5-6 months) not one interested buyer came, and the place is heavily advertised all over the DR RE websites.

[Rocky]

Originally Posted by liam1

i rent an oceanfront/ocean view apartment and have been here for 5-6 months, when i signed the rental contract i was told if there are any interested buyers i would be obligated to let them in to see the place. so far (5-6 months) not one interested buyer came, and the place is heavily advertised all over the DR RE websites.

One individual condo or complex, is not representative of the whole market.
It also depends on how good a deal you got.
If it was a screamer of a deal, you'd have folks beating a path down to your door, but if you paid a wee bit too much, then it will take time to reap the benefits.

[John Evans]

people dont want sea front these days- after seeing tsunamis.some of the new developments seem to be built almost on the sand in cabarete and they already have sandbags out to stop the land being washed away- i should imagine these would be difficult to sell

[STEVE G.]

Originally Posted by PICHARDO

Let me dispel all your "like USA burst" notions regarding the co-op market of the DR...
Unlike in the USA the DR's RE market is driven by cold hard cash "currency" not the other way around...
...In the DR there's no bubble to burst, unless of course, is the one you'll blow after chewing "Chicles Adams"...

Good post PICHARDO , answers everything ... so
Q : When blows out the "Condominium-bubble" in the area of Cabarete ? ... A : Never , as there is no bubble to blow .