Inflation or devaluation of a currency by the politicians is nothing new.  The Roman Emperors starting clipping coins, or better said, slowly but surely reducing the gold content of the Denari until such a point that it was nothing more than base metal.  It took them 500 years before the coins became worthless or junk in other words (without the gold or silver content).  Paper money used to be backed by gold or exchangeable into gold, until it too was taken off the gold standard altogether, and now it is, quite frankly nothing more than paper with fancy engravings on it.  That too is on the path of the Denari.  And since we are talking about the US Dollar in this case, one dollar printed in 1913 has almost lost 100 percent of its value in 100 years - progress over the Romans to be sure.
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If you hold paper, or money, then you must get an interest rate or return on your funds to at least equal the inflation or devaluation rate.  At the moment, as of December 2007, many economists and number crushers put the current inflation rate at about 11 to 15 percent, despite the official line from government bureaucrats.  With the US Federal Reserve seemingly bent on keeping interest rates low, keeping pace or treading water in regards to inflation by using traditional bank or savings deposits does not look like the answer.   
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Regardless, this is not meant to provide a synopsis of how politicians and other leaders defrauded the citizenry over the centuries (although a fascinating study of human history indeed), but rather to discuss some ideas to convert the paper money into something of worth, that will hold onto its value over the long-term.  Certainly owning gold fits the bill (and we are fans of gold to be sure).  However, aside from gold's use in jewelry and some commercial applications, it does have a fairly limited utility value to us in our everyday lives.  Real Estate, on the other hand, is another matter.  Which is to say, you can live on it, you can grow tomatoes on it, you can rent it out to someone else to grow tomatoes on it, and so on.  In other words, a utility or use, while you wait or while you hold onto it as a store of value.
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Property or land has historically appreciated anywhere from about 2 to 5 percent annually, with some periods of slow growth or a stagnant market setting in from time to time, and some periods of double digit growth as well - sometimes to the point of bubbles being created.  But, the main point to be noted is that real estate usually holds it value and acts as a hedge against inflation (along with gold, of course).  We say usually, as there are exceptions to everything, such as the current sub-prime nonsense in the US at the moment, which is wrecking havoc with the US real estate market and probably will skew the traditional calculations because of all that debt and leverage that is out there (the market was driven up by debt and leverage, so it is no surprise that these same two factors will make a correction that is much more dramatic and painful as well).
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So, the question becomes - if you are going to swap your paper money for something else, and presumably real estate for some portion of it - then where?  Good question.  The answer has to do with if whether or not the market where you are looking to buy is over-valued, under-valued or fairly valued at the moment.  In addition, if there has been increases lately, what has caused it.  Is cheap money or debt to blame, or are properties being purchased for cash?  Is it a case of supply and demand or something else?
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Real estate in some parts of the Dominican Republic, such as on the North Coast, Semana and Punta Cana has seen price increases of 20 percent or more annually recently.  Will that continue to be the case?  If history is any guide, probably not or not indefinitely, at least not at that rate of appreciation indefinitely, but then again, much of that real estate has been purchased  for cash, so no debt bubble as the cause either.  However, there still are bargains and fairly valued real estate or properties out there - you just need to know where to look.  Often enough, that means not following the crowds and staying away from where the current boom is.  The idea is to be the investor with some common sense and long-term vision, buying for fair value and holding it.  For example, if your grand-father bought twenty-five acres on the beach in Punta Cana 30 years ago, when there was nothing but noisy seagulls and weeds, he probably would have gotten the land dirt cheap.  He also proably would have never stopped hearing his wife, your grand-mother, tell him what an imbecile he was for buying a property in some banana republic.  Of course you, one of his grandchilren would most likely be laughing all the way to the Mercedes dealership, telling everyone along the way what a genious your grand-father was.  And so it goes.
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The key point in all of this is of course to make your real estate purchases in such a way that you are not over paying, or at least getting current value.  In this regard, once again, the Dominican Republic on average is still about 25 to 30 percent less expensive when you compare similar properties in the rest of the Caribbean.  As just one example, The Global Property Guide (a real estate guide from the UK) says that prime beachside property in the Dominican Republic sells at an average of US$2,000 a square meter, compared with US$10,400 in Barbados.  There is nothing wrong with Barbados, but it is worth 5 times the cost of similar, beautiful beach front property in the Dominican Republic?  We think not.
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Looking even further, the Dominican Republic has a large number of luxury condo's, single family homes, rural or farm land and undeveloped beach lots at prices that most middle class Americans and Europeans can afford.  One area we have highlighted is the Barahona region, whereby you can still get beachfront or ocean view property for about US$35 per square meter, compared to about US$100 per square meter in more built up or otherwise, better known areas of the country.  In terms of luxury ocean front condos, while you can pay US$800,000 for a sea view apartment in some projects in Punta Cana, the point is you do not have to.  As an example, we found a very well done project of brand new 1100 square foot condos right on the beach in Juan Dolio, complete with swimming pool for US$195,000.  Looking for a single family home?  Some of our clients have recently purchased homes in middle and upper middle class sections of Santo Domingo for prices ranging from about US$120,000 to US$180,000.  And these are what you would call homes, not garaged sized shacks that some real estate brokers in California are trying to convince you are worth US$500,000 or more.
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In summary, is there value for money when it comes to real estate in the Dominican Republic?  The answer is YES.  In addition, adding some fairly priced Caribbean real estate to your investment portfolio could also help protect your assets from the eroding nature of inflation as well.

For more information about purchasing real estate on the south coast (Caribbean side), please contact our office at 809-334-5387 or 809-756-1917 or via email:  realestate@dominican-republic-info.com