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]

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]

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-Pr?sident 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]

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]

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.]

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 .

 

[liam1]

DR RE market could see a decline in prices once international owners are forced to sell their retirement/vacation condos to offset the rising costs of living in their own countries, or once foreclosures start knocking on the doors of their main residences, and they will have to make a choice whether to save that residence by selling fast what they own overseas or let the main residence go and hold onto the vacation property. when money is in short supply people tend to sell everything they can do without.

also not to forget, Florida is becoming more and more attractive to international buyers because of the RE bubble burst there (Miami especially), and weak USD/strong EURO which favors European and Russian buyers.

the other thing that i question alot, how many baby-boomers will actually decide to retire here once they find out that 911 emergency system is not what it is in the US, and cost of living is equal, if not more.

 

[Rocky]

the other thing that i question alot, how many baby-boomers will actually decide to retire here once they find out that 911 emergency system is not what it is in the US, and cost of living is equal, if not more.

Tell Megabiteme that, as he lives here, despite hating it, but he has no choice, because he can't live in the US with his monthly revenue.
That aside, we're in the Caribbean here and there's a price to pay for ideal weather and it's usually double the US and more.
If the lack of 911 emergency service were the deal breaker for US residents or any other nationals, then why have so many of them been moving here in wholesale proportions in the last 10 years?
I would guess that most US citizens would be glad to part with the 911 service, in exchange for not having "the other 911".

 

[liam1]

we are talking about RE buyers, and with all due respect, if Megabiteme is struggling to met the ends meet, i doubt he's looking to buy RE here.

the 911 system is VERY important to people of age, and the older they get the more they depend on it, so once they find out that in a case of an emergency an ambulance, a police car and a fire dept won't show up within any reasonable time-frame, if they show up at all, many people will get turned off, and will not trade that security for a few more shiny days a year. and as i mention there is south Florida, which is practically Caribbean.

 

[Rocky]

we are talking about RE buyers, and with all due respect, if Megabiteme is struggling to met the ends meet, i doubt he's looking to buy RE here.

It was in response to you saying that it costs as much if not more to live here than the US, which is false.
I used him as an example, but anyone who has lived here for a long time will tell you that is so.
I made no mention or insinuation bout him buying RE.
He was just part of the evidence that your statement was incorrect.

the 911 system is VERY important to people of age, and the older they get the more they depend on it, so once they find out that in a case of an emergency an ambulance, a police car and a fire dept won't show up within any reasonable time-frame, if they show up at all, many people will get turned off, and will not trade that security for a few more shiny days a year. and as i mention there is south Florida, which is practically Caribbean. [/quote]
Nobody's expecting the DR to replace FLA.
It's been the NA capital of retired nearly deads for eons.
But you're a bit too concerned about what's happening in FLA.
When someone wants out, you know, real bad, when he's had it up to his ears with the NA way (or European for that matter) with all the controls and taxes and laws and bad weather and blah blah blah, he ain't gonna be going to FLA, he'll be looking here, so the only balloon that will burst is yours, as your deductions and evaluations are out in left field.
It's nothing personal.
You simply haven't fully understood what drives folks to come here and those who really want it, will pay.
The bonus is, IT"S CHEAP... REAL CHEAP as compared to the rest of the Caribbean.

 

[liam1]

...When someone wants out, you know, real bad, when he's had it up to his ears with the NA way (or European for that matter) with all the controls and taxes and laws...

not sure about your statement here. there are many posts here where people complain about the lack of the controls and the laws that NA offers.

also, unless i want to eat rice and beans every day, my wife and i can't get by without at least 2.000 USD a month, plus the rent.

and when i say "retirees", i would not put you and most of the posters here in that category. to me a retired person is someone who does not work any more, and is living off of the pension or the savings, as majority of the baby-boomers will be doing once they retire, and i question how many of them will come here to run the clock out.

 

[liam1]

double post.

 

[Rocky]

and i question how many of them will come here to run the clock out.

Does it matter?
Does the DR have to keep them 'till death do us part?
I don't understandf any of your logic.
None of it at all, and apparently when I explain something to you, you don't understand a word either, and go off on a tangent about other issues, like as if to distract away from the pont of the thread.
Like trying to invalidate Megabiteme's assesment about living here cheaper than the US, by talking about him not buying RE.
What possible difference would that make?
We were talking about cost of living and your erroneaous statement that it costs more here than the US.
I don't care if you want to delude yourself with the RE perceptions you have.
It makes no difference to me.
I was trying to help you understand, but if you don't want to, that's fine to.
Do what you want with the info.
It's free and accurate.

 

[liam1]

someone implied that an influx of retired baby-boomers will have a significant impact on the RE here, and i said i question how many of them will actually come here to retire.

as far as the cost of living goes, there are many threads here on that topic, and general agreement is that it is as much as the US, if not more, unless you want rice and beans every day. the shampoo i buy is $5.5, toilet paper $4, coke $1.5, gas $5.5 a gallon, grapes almost $3 for a little package, watermelon $4, nutella $4.5... maybe you get a special discount at the Playero, i don't, i those are the prices i pay.

 

[catcherintherye]

Liam and Rocky, as one of those people you are speaking of, please allow me to explain the reasoning behind my decision.

As is the case with any commodity,when looking for a place to live after leaving the formal workforce (I say formal workforce since most retirees do some form of work after retirement, in fact close to 75% do some type of work) most people consider many factors.

One is the weather, or perhaps climate is a more appropriate word, and its association with the ease of lifestyle. For those relocating from the north and particularly the northeastern US, the warm weather and no snow to shovel are very appealing concepts.

Cost of living is another. That is particularly true with regard to housing costs. While living in the DR is not cheap, it is considerably cheaper than most eastern seaboard states. When everything is taken into consideration, including the price of heating oil, the cost of living is perhaps a quarter to a third less expensive than in the those states. Of course, that all depends on how one chooses to live.

A certain percentage of retirees also seek a community of people who they feel comfortable living with. This factor is very subjective, obviously, so each individual, given the opprtunity, will "try out" an area before making the decision to move. For me, the people I met while "trying out" the DR were the right fit, and a very important determinant. However, I know different people respond differently.

The aspect of community is probable the most important intangible variable. If there is no sense of connection to the people within the community it is unlikely a person would decide to live there. This is reason why forums such as DR1 are so important. If the first glimpse of a community is negative, there is little chance that community will attract new people.

The other factors include safety and security, health care and other services, and intrastructure.

Speaking only for myself, of all those factors to consider, I would rate the top three as, 1) the sense of community, 2) price / value of housing ratio 3) weather and a comfortable environment.

But that's just me.

 

[AK74]

Frankly speaking I experience some serious moral concerns when I hear statements that for a person (especially for an expat)of 70 y.o. and older living in DR is safe,healthy and economically beneficial.

Especially when I hear it not from an excited, idealistic, unaware and naive fresh expat baby-boomer from Boston, London or New Jersey, but from Dominican long-timers who know the country very well.

The R E A L country.