BY ANDREA LÓPEZ CRUZADO AT MANSION GLOBAL
With more storms forecast for Puerto Rico’s tumultuous economy, one spot on the island is still sunny. Dorado has seen a 15% increase in the median asking price of its properties from 2013 through February 2016.
In fact, this luxury destination on the northern coast of the U.S. commonwealth is the only city in Puerto Rico (of the island’s 13 largest) where asking prices have increased in the last three years, according to an analysis by Point2 Homes, a real estate search portal.
Point2 Homes analyzed price activity in cities with a population of over 13,000, including San Juan, Carolina, Ponce and Fajardo. In all but Dorado, prices went down from 2013 through 2016. Ponce suffered the biggest dip, at 35%; Guaynabo, another northern location popular with high-end buyers, saw the smallest drop, at 3%.
Puerto Rico is grappling with a 10-year recession and $70 billion in debt that is crippling growth. According to the Pew Hispanic Center, more Puerto Ricans are moving to the U.S. mainland than in any period since the Great Migration after World War II.
Still, the luxury real estate market continues to flourish.
Last year, Christie’s International Real Estate identified Puerto Rico as one of seven key real estate markets for “investment, exclusivity and getaways.” Sales of $1 million-plus properties— which represent 10% of the market—grew by 105% from 2013 to 2014, according to their 2015 “Luxury Defined” report.
The company attributes Puerto Rico’s flourishing prime property market to its status as a tax haven. Four years ago, significant property and corporate income tax exemptions were enacted to attract new residents.
“Residence in Puerto Rico means a shield from most federal income taxes, and prominent investors have been catching on rapidly since the law was passed in 2012,” the report noted.
For Leticia Brunet González of Trillion Realty Group, a San Juan-based Christie’s affiliate, Dorado owes its fortunes to the lifestyle it offers: beach, golf and tennis facilities, restaurants and spas, as well as security.“Those buying there are buying a lifestyle,” she said.
An early believer in Dorado was U.S. businessman and conservationist Laurance Rockefeller, who in the late 1950s built a hotel here that quickly became popular with A-listers including Joe DiMaggio, Ava Gardner, Gerald Ford and John F. Kennedy. Today, a Ritz-Carlton Reserve sits on the former Rockefeller estate. The hotel includes three 18-hole golf courses and the historic Rockefeller Nature Trail, an open-air sanctuary.
According to Brunet González, Dorado attracts a mix of families and business people. Foreign buyers come mostly from the U.S. and include several tech entrepreneurs said to be taking advantage of the affordable luxury prices (and tax incentives). While asking prices in Dorado went up in the last three years, they are still 13% lower than in 2010, according to Point2 Homes’ data. Luxury properties are available for as little as $2 million.