I have been looking at housing here in Santo Domingo for a few months now and I am getting the impression that the artificially low interest rate environment is creating a construction-housing bubble similar to the United States and China. Many, many different apartment complexes and retail construction going up all over the city and it appears there are many apartments left empty that are owned by "investors". This doesn't pass the smell test and looks-feels like another significant construction-housing bubble. The prices are also something to question, but at least are not as absurd as those in Shanghai or parts of the U.S. Does anyone have any thoughts on this matter?
- Thread starter AndyGriffith
- Start date
Is There A Housing Bubble In Santo Domingo?
newsflash!
Most of the "investors" in these new construction projects are not financing!
Most of the "investors" in these new construction projects are not financing!
That is true, but I went by the Remax Metropolitana fair and they were really pumping this 9% BP financing...which got me curious to what is going on there...But even paying cash for these apartments, the question is whether the low interest rate environment is creating once again an artificially oversupplied housing market.
You gotta launder your drug money somewhere right? They build the units which then compete with other units already finished and underoccupied and those still under construction. The development is finished now it needs tenants. I see these al over Santiago and I declare not one has 100% occupancy. I think these are mostly meant for US, Euro and Dominicans that live abroad that want a secure place to crash when they come to visit their less successful familial relations.
But overall you d expect a reduction in price but no...I havent seen much of that. But then again I m not too interested in negotiating, so when I read the brochure or talk to the agent, I dont offer much resistance to the sales pitch.
But overall you d expect a reduction in price but no...I havent seen much of that. But then again I m not too interested in negotiating, so when I read the brochure or talk to the agent, I dont offer much resistance to the sales pitch.
Absolutely. Not all the money in the DR is drug money. However, it is safe to venture that there is a substantial amount of drug money being injected into the DR economy, and that money does requires laundering.
We do understand that not all of the money for this construction is drug money but Nal's, Pichardo, others keep insisting that oh its dominicans and they are paying cash and there is no narco effect. That flies in the face of reality.
http://www.dominicantoday.com/dr/lo...ders-luxury-condo-building-confiscated:bunny:
Arturo del Tiempo Marques, one of the developers of the Torre Atiemar (Pedro Henriquez Urena & Mexico) and Torre Margot in Santo Domingo (Anacaona) is under arrest in Barcelona. Now local news sources indicate that the luxury high rise developer, who was arrested on 2 March as a suspect in a cocaine shipment to Spain, was a fugitive of Spainish justice for his past involvement in a EUR40 million fraud regarding a municipal farming and mining company, according to Diario Libre. Del Tiempo Marques is now in jail in Barcelona with one of his partners, Antonio Nunez Sebria for a shipment of 1,200 kilos of cocaine that arrived from the DR on 2 March.
President Leonel Fernandez himself had praised the investment of the Spaniard in the tower, when participating in October 2005 in the groundbreaking ceremony for the highw rise.
News portal 7dias.com.do asks whether at the time Del Tiempo's background was checked by government security and by the Banco de Reservas, the financier of the tower. A check carried out by the news portal showed the Spaniard did not have a substantial business background for the mega investment in the Atiemar or Margot towers promoted by Del Tiempo in the DR.
Yesterday, the drug advisor to the President, lawyer Marino (Vincho) Castillo told the press that he had reports that the father of the chief of the Police, Guillermo Guzman Acosta was the owner of an apartment at the tower. Earlier, 7dias.com.do had reported the chief of the police had an apartment at the tower. News reports now indicate that Guzman Acosta financed the apartment by selling a US$1.7 million apartment he owned at the Anacaona Avenue. Guzman Acosta is a former chief of the Police.
The Atiemar apartments' selling price was US$1.3 million, or approximately RD$46 million.
In a statement responding to questions as to why the Banco de Reservas took up the financing of the tower, the bank issued a statement saying that to approve a financing a client check is done and proof of economic solvency needs to be presented. 7dias.com.do had reported private banks rejected the financing.
Presidencia de la Repblica
Peridico 7 Das - Empresa que construy? Atiemar nunca ha existido
Then you have the Cristal Tower on Lopa De Vega, that was part of the BanInter scandel. No drug money there either, although it was all wrapped up with Hippo.
President Leonel Fernandez himself had praised the investment of the Spaniard in the tower, when participating in October 2005 in the groundbreaking ceremony for the highw rise.
News portal 7dias.com.do asks whether at the time Del Tiempo's background was checked by government security and by the Banco de Reservas, the financier of the tower. A check carried out by the news portal showed the Spaniard did not have a substantial business background for the mega investment in the Atiemar or Margot towers promoted by Del Tiempo in the DR.
Yesterday, the drug advisor to the President, lawyer Marino (Vincho) Castillo told the press that he had reports that the father of the chief of the Police, Guillermo Guzman Acosta was the owner of an apartment at the tower. Earlier, 7dias.com.do had reported the chief of the police had an apartment at the tower. News reports now indicate that Guzman Acosta financed the apartment by selling a US$1.7 million apartment he owned at the Anacaona Avenue. Guzman Acosta is a former chief of the Police.
The Atiemar apartments' selling price was US$1.3 million, or approximately RD$46 million.
In a statement responding to questions as to why the Banco de Reservas took up the financing of the tower, the bank issued a statement saying that to approve a financing a client check is done and proof of economic solvency needs to be presented. 7dias.com.do had reported private banks rejected the financing.
Presidencia de la Repblica
Peridico 7 Das - Empresa que construy? Atiemar nunca ha existido
Then you have the Cristal Tower on Lopa De Vega, that was part of the BanInter scandel. No drug money there either, although it was all wrapped up with Hippo.
Big time, some ugly barrio houses here cost more than some houses in Florida. It does not make any sense to me. In Florida at least they have an infrastructure in place and not to mention very good school system compare to DR standard. They must be smoking something very goo.
Your talking about two different things. One are commercial loans to build the projects and two are residential loans to buy the condos/apts. This 9% rate is no doubt for the latter.
As Tambo suggested, I would say that there is little commercial or residencial lending going on. One reason is that there is no such thing as a "fixed rate" here. Yes, the bank manager of BP will tell you the 9% is "fixed, but when you ask him what happens if the peso devalues more and then he will tell you that the rate will go up but that it is still fixed. Confused? Surprisingly to the bank managers it makes sense to them, jeje. However, if you have a business and are trying to create your proforma unkown variable rates can cause serious problems.
As far as the apartment goes, we have a lot of new ones here in Santiago but from what I've seen is that mostly the locals rent and the ones that buy are Dominicans that live abroad; either to live in them or rent them.
Listen man I m not all of it is drug money. Nor even half of it. What I am alluding to is that drug money has to make itself legitimate. Construction projects financed with drug money never had to do a market assessment or commercial appraisals or file a residential prospectus. It doesnt matter if the building will have tenants or not. The purpose is to launder the money from the narco operation. For example, a building has no tenants put pulls $120K annually in rents? Come on! P&Ls are all written into the real estate which masks the money from the other sources. No one anywhere is building anything right now but when the building you did is finished it has 26 apartments and 4 occupants for an entire year??? But you re going to start in on another phase of the development? You know what you re looking at man...
Here is another reality-where I live in NYC, the Dominican presence is very strong in two areas-taxis and bodegas. These taxis service communities that yellow cabs do not bother with, and operate with no meters. You pay whatever you and the driver decide on.
Bodegas in these same communities offer similar services that supermarkets do not-the basic necessities like bread, milk, juice, candy, hot sandwiches and coffee. They also dabble in other things, like slot machines in the back room, a numbers racket-whatever their clientele is into. All cash.
Both businesses can operate 24 hours a day. A guy who owns his own cab can rent it out to others and have it out on the streets all day and night. Bodegas only need one clerk to remain open from midnight until 6 in the morning. All they need is a little protective slot in the side window to collect the money and provide the goods to the customer.
So what happens to all that cash? Some of it finds it's way back to the island. You think those little bodegas don't make money? Just ask the owner to show you a picture of his house and jeepetas in the DR.
Life is good when you can avoid paying a large majority of the taxes you owe on an all-cash business.
I don't know about a bubble in DR. It seems to me that it is the only place where if a house doesn't sell, the seller actually raises the price.
I dont mean to belittle your point man, but where you live in NY that the supermarket doesnt carry bread, milk or juice? Bodegas are only good for crap sandwiches, lottery tickets and calling cards. Or when the supermarket in your area is closed.
And those non metered taxiz usually work with a base. The price for the fare is set by the base, as well as which driver/car is sent. Most guys dont take street hails because its a perfect way to get robbed. But then other do because its all cash in your pocket, nothing to share with the base. You own your own car? More money in your pocket, if not you gotta pay the base to lease theirs.
But you were right, when you dont pay taxes all that money is free to buy properties in DR.
Totally agree with you RacerX (and I live uptown!!!!!!!).
However, even if they don't pay taxes, it's hard to envision how these bodegas make money cause some of these Bodegas have no more than carnation milk on their shelves (lottery? that is if they're lucky to have the licence).
Plus, there is a bodega- sometime 2 or 3- every single block.
I was told more than once that a lot of them are just "front" to justify other income (if you know what I mean).
I d buy the front, on the male and female side of affairs. Between Fulton Street and Eastern Parkway, on Nostrand Avenue there are about 9 Dominican hair salons. That is roughly 2 on each block, sometimes on the same side of the street and sometimes opposing sides. I dont know how they survive with so much competition(not even considering the African hair braiding places and American barbershops).
I dont know how many bodegas probably 15 or so, varying ownership, Chinese, Arab, etc.
But this money I know is being used to buy homes in DR. Tax-free I dont know, but it is hard to fathom paying $2K a month for rent in NY plus $500+ in utilities and then more for supplies. Somethings has to give somewhere. Because cab drivers dont make that much money. I consider it this way: if it were a profitable enterprise then Americans would monopolize it. When you forgo an entire industry to foreigners then you ve conceded that there is not much money in it. I could be wrong though.
I dont know how many bodegas probably 15 or so, varying ownership, Chinese, Arab, etc.
But this money I know is being used to buy homes in DR. Tax-free I dont know, but it is hard to fathom paying $2K a month for rent in NY plus $500+ in utilities and then more for supplies. Somethings has to give somewhere. Because cab drivers dont make that much money. I consider it this way: if it were a profitable enterprise then Americans would monopolize it. When you forgo an entire industry to foreigners then you ve conceded that there is not much money in it. I could be wrong though.
Agree! It just doesn't add up.
On the other hand, usually cab drivers make between $600 and $1000 a week. Not bad but I don't see how it could buy Real Estate in Santo Domingo or Santiago, maybe in smaller towns ?
Again, it is really hard work driving 12-14 hours shift in NYC, I know quite a few drivers and they all have back problems after a few years. That's probably why it's a job mostly held by foreigners .