I'm really intrigued by the recent debate thread on the existence of Dominican middle class and thought I'd branch out and add some relevant oberservations and pose relevant questions as well.
Now, as a foreigner living in DR for years, there are many phenomenon that continue to puzzle me. For example:
A. We all know the prices go up every year. Yet supermarkets are perpetually crowded. Especially on weekends. And if look around check-out lines, almost eveybody has their shopping cart and even carts filled to the top. Doesn't matter it's Nacional, Plaza Lama, Carrefour PriceMart...etc, all the same.
Now take a closer look. There people aren't necessarily rich. (sure, looks can be deceiving, but judging from their attire and demeanor, they appear very middle-class (some not even that). to me )
Talking pesos and centavos, those filles carts often amount to RD$2000 + plus per check-out. And I assume they make weekly trips. So just on supermarket purchases along, those folks spend upward of RD$8,000 a month. And we all know that most middle-class Dominicans don't make over RD$10,000 a month.
So, could it be that:
1. These people are actually housekeepers shopping on behalf of their rich due?o de la casa.
2. They are a bunch of perpetually over-indebted middle-class folks maxing buying thing on credit cards and paying through the nose on APR charges.
3. They are just regular but lucky folks who receive sizable "remesas" from Dominican York relatives.
Your take ?
B. The high real esate prices in Santo Domingo.
Rental prices are amazingly close to Manhattan level. There are "torre" condos renting for US$2,000 and upward a month. I know somebody paying US$4,000 for a high-floor (2-bedroom) apartment in Torre Del Sol. Of course he is not complaining as his multinational employer picks up the tab as part of his pay & compensation package. Sales prices aren't that cheap either. Most torre condos go for RD$5 million a piece.
Using the classic supply-and-demand logic, I fail to see how the high prices are sustainable. Yet, for the years I've lived here, I've never seen housing prices dive. If anything, it's going up every year, regarding of the DR state of economy.
In all major world cites, housing prices have boom-and-bust cycles. But in Santo Domingo, it seems not the case.
I've been told by locals that despite the mushrooming of torre constructions, there is still not enough housing to meet demand as people flock in to SD from "interior" and abroad.
But if you actually live in Santo Domingo and look around, you'll find noticeable vacancy rates in all sorts of apartments.
So what justifies and sustains the high housing prices ?
My guesses are:
1. Many foreigners come here for a predetermined period of time so opt for rentals rather than outright purchase. This is the case with missionaries, teachers (Carol Morgan and other English-speaking schools), company executives and managers and diplomats. The landlords can thus exact high rentals knowing they (or their employers) would rather pay up than buying outright.
2. Some wealthy foreigners and overseas Dominicans alike buy up condos but spend little time in here (for vacation only). Leery of deadbeat tenants, they much rather leave the condo vacant during their absence than renting out, thus creating an artificial housing shortage.
3. From what I heard, real estate purchase is a favorite way for ill-begotten fortunes (ie. drug and corruption) to be laundered. These people are indifferent to high pricing as they are chiefly concerned with funneling their fortune. Hence the inflated pricing.
But if you look around, non-luxury apartments aren't cheap either. Few decent two-bedroom apartment anywhere in SD go for less than RD$5,000 a month. Surely, these aren't the types of units of interest to the wealthy and the connected, but somehow the trick-down price effect still holds.
So what gives ?
Again, I'm not convinced that these apartment or estate owners are actually middle-class folks with monthly income around RD$10,000. So who are they ? If the rich still account for a small sliver of DR polulation, they sure are as ubiquitous as the torres.
So who are these home owners/renters ?
Now, as a foreigner living in DR for years, there are many phenomenon that continue to puzzle me. For example:
A. We all know the prices go up every year. Yet supermarkets are perpetually crowded. Especially on weekends. And if look around check-out lines, almost eveybody has their shopping cart and even carts filled to the top. Doesn't matter it's Nacional, Plaza Lama, Carrefour PriceMart...etc, all the same.
Now take a closer look. There people aren't necessarily rich. (sure, looks can be deceiving, but judging from their attire and demeanor, they appear very middle-class (some not even that). to me )
Talking pesos and centavos, those filles carts often amount to RD$2000 + plus per check-out. And I assume they make weekly trips. So just on supermarket purchases along, those folks spend upward of RD$8,000 a month. And we all know that most middle-class Dominicans don't make over RD$10,000 a month.
So, could it be that:
1. These people are actually housekeepers shopping on behalf of their rich due?o de la casa.
2. They are a bunch of perpetually over-indebted middle-class folks maxing buying thing on credit cards and paying through the nose on APR charges.
3. They are just regular but lucky folks who receive sizable "remesas" from Dominican York relatives.
Your take ?
B. The high real esate prices in Santo Domingo.
Rental prices are amazingly close to Manhattan level. There are "torre" condos renting for US$2,000 and upward a month. I know somebody paying US$4,000 for a high-floor (2-bedroom) apartment in Torre Del Sol. Of course he is not complaining as his multinational employer picks up the tab as part of his pay & compensation package. Sales prices aren't that cheap either. Most torre condos go for RD$5 million a piece.
Using the classic supply-and-demand logic, I fail to see how the high prices are sustainable. Yet, for the years I've lived here, I've never seen housing prices dive. If anything, it's going up every year, regarding of the DR state of economy.
In all major world cites, housing prices have boom-and-bust cycles. But in Santo Domingo, it seems not the case.
I've been told by locals that despite the mushrooming of torre constructions, there is still not enough housing to meet demand as people flock in to SD from "interior" and abroad.
But if you actually live in Santo Domingo and look around, you'll find noticeable vacancy rates in all sorts of apartments.
So what justifies and sustains the high housing prices ?
My guesses are:
1. Many foreigners come here for a predetermined period of time so opt for rentals rather than outright purchase. This is the case with missionaries, teachers (Carol Morgan and other English-speaking schools), company executives and managers and diplomats. The landlords can thus exact high rentals knowing they (or their employers) would rather pay up than buying outright.
2. Some wealthy foreigners and overseas Dominicans alike buy up condos but spend little time in here (for vacation only). Leery of deadbeat tenants, they much rather leave the condo vacant during their absence than renting out, thus creating an artificial housing shortage.
3. From what I heard, real estate purchase is a favorite way for ill-begotten fortunes (ie. drug and corruption) to be laundered. These people are indifferent to high pricing as they are chiefly concerned with funneling their fortune. Hence the inflated pricing.
But if you look around, non-luxury apartments aren't cheap either. Few decent two-bedroom apartment anywhere in SD go for less than RD$5,000 a month. Surely, these aren't the types of units of interest to the wealthy and the connected, but somehow the trick-down price effect still holds.
So what gives ?
Again, I'm not convinced that these apartment or estate owners are actually middle-class folks with monthly income around RD$10,000. So who are they ? If the rich still account for a small sliver of DR polulation, they sure are as ubiquitous as the torres.
So who are these home owners/renters ?