The price of one living place It can vary, depending on the place where it is located, the distribution spaces and the quality of the finishing materials, among other factors. The only variable that guarantees a “Best offer” is to buy it in blueprints versus acquiring the unit finished.
After analyzing the market options, Carlos Hiraldo and his wife they made the decision to buy your apartment on plans because it was more economic and because they wanted to have a space designed for them. For 2019, the spouses paid the initial of their home, which had a cost of 3,075,000 pesos.
The difference between paying finished propertywith the same characteristics as the one they have: three bedrooms, two and a half bathrooms, living room, dining room, balcony and a parking space, built in 131 square meters, both located in Alameda, Santo Domingo Oeste, is that they it would cost 600,000 pesos more, approx.
To buy houses and apartments in plans or construction is a trend in the Dominican Republic, which increased since mid-2020. In fact, 95% of the units are being sold before the start of the work, he revealed to Free Daily the president of the Association of Real Estate Agents and Companies (IEA), Alberto Bogaert.
According to the real estate expert, buying in the pre-construction phase is more economical to purchase finished units. However, said economy could vary depending on several factors in which they are found:
- The area in which the project is located
- The builder and promoter of the property
- The method of payment, whether by financing, project fees or payment in full
These characteristics are the ones that mark the Pattern of construction and sale of real estate in the country, which has had a variation in the last three years, which responds to three factors that they “hit him hard” real estate: pandemic of COVID-19, scale inflationary and the decrease in purchasing power of the acquirers.
That is why he real estate continues to expand the trend to sell units in plans or constructionwith smaller spaces and new household dependencies to be able to meet the needs of buyers, whose purchasing power has decreased due to inflation and other factors external to the local economy.
Impacted the cost index
Between 2020 and 2021 the construction cost of the square meter came to shoot up in a 40%due to the consequences of the coronavirus, which led some developers to increase the price of the units that had already been reserved for pre-sale, explained the president of the Association of Housing Builders and Promoters (Acoprovi), Jorge Montalvo.
Due to the increase of up to 400,000 pesos in the final cost of homesthe National Institute for the Protection of Consumer Rights (proconsumer), Eddy Alcántara, reported that the institution received up to 100 claims for conflicts between acquirers and construction companies. Last year, in four months they resolved more than 500 cases.
4.8 million pesos, is the value of a low-cost home, a ceiling that was increased by 7.82% by the General Directorate of Internal Taxes (DGII), on January 20, 2023.
RD$4,852,211
In the case of Hiraldo and his wife, the company with which they set aside their home informed them that the value of the apartment would increase by 17% by inflationto 525,000 pesos more than they had contracted for.
In December 2022, the Home Construction Direct Cost Index (ICDV) in the metropolitan region was 224.41 on average, registering a decrease of -0.71 points, compared to the previous month which was 225.12. However, when compared to the previous year, there was an increase of 20.53 points.
The information, registered in the monthly bulletin of National Statistics Office (ONE), highlights that the ICVD was located in 203.88 in December 2021 and went to 224.41 in the same month last year. The subgroups with the highest increase were accessories, electric generators and elevators at 8.25%, 3.7% and 2.96%, respectively.
Due to variations in the cost of construction per square meter, Montalvo specified that the developers and builders Have had to innovate with the spaces, building apartments with their general characteristics, but smaller.
“The trend is to build less footage to be able to give a better price. We are talking about the same apartment, with its three rooms and dependencies, but a little smaller.”President of Acoprovi
Advantages and disadvantages of buying on plans
“Whoever buys in advance, buys more economically, selects the space that he likes the most and has the opportunity to choose the materials for finishing to his liking”, with these words, Regis Jimenez synthesizes the advantages of buying plans or construction.
The real estate sales expert considered that there is few disadvantagesciting construction defects (leaks, cracking of walls, deterioration of ceramics and, among other problems, defects in cabinets and electrical accessories) as a topic that occupies less than 8% of the probabilities of physical defects.
He assured that, when talking about negative things in real estate, they can be foresee when choosing one construction company responsible that grants them the rights and guarantees stipulated by law and with the advice prior to any investment.
Jiménez has more than 20 years of experience, acting as a consultant, in his opinion sales are slowed down in 2022 due to internal and external factors of the economy, including the decrease in the purchasing power of workers and variations in financing rates.
He explained that, despite the increase in housing due to the variation in the prices of construction materials, people are still looking for fulfill your dreams owning your own home or investing in real estate as a rental business.
Experts in the construction and real estate sector agree that the shielding for the purchase and sale of real estate is granted by the contract, in which the risk of price adjustment due to inflation must be specified. They also explained that the legal terms could be a bit technical, so buyers are recommended to seek the assistance of a person specialized in the area to advise them before making the investment. One of the aspects that should not be missing in the contract are the specifications for the increase in construction cost, delivery date, time and strategy for guarantees for construction defects. Regarding the construction footage, it is estimated that the contract specifies the number of meters to be built and the extension of the land in its entirety.
In recent years the zones more dynamics for sales have been:
Demarcations where properties are also registered that are compatible with the method of short rentalsthrough digital platforms.
Added value, surplus value
It is the increase in the value of the property acquired as a result of the development that is being carried out in the apartment project under construction, from the beginning of the pre-sale phase until it ends with the delivery of the project. Said increase is generated over time for the benefit or profit of the buyer and the agent, whose payment commission for the sale is generated with 5% of the value of the home.
Jimenez explained that the purchase under construction It allows the buyer to make a first deposit and, from then on, pay the property in installments, which becomes a saving that generates value over time and increases the capital gain of the separate unit.
He explained that, before the pandemic, the surplus value of flat properties in the country was around a 8% and 15% on average.
