by With two decades of involvement in real estate spanning Dubai, Ukraine, and now Puerto Rico, I have witnessed firsthand the island’s evolving landscape. As we stand in 2025, it is crucial to approach Puerto Rico’s future with both optimism and caution—balancing opportunity with responsibility—to ensure sustainable growth that benefits all residents.
Puerto Rico’s journey toward recovery is steady but cautious. Following the pandemic’s sharp downturn in 2020, the economy gradually rebounded, with GDP growth reaching 3.6% in 2022, slowing to about 0.6% in 2023, and then rising again to 2.1% in 2024. These figures reflect resilience, driven by robust consumer spending, exports, and an improving job market. Unemployment has fallen to around 5–6%, supported by construction jobs from rebuilding efforts and an influx of residents and diaspora members returning to the island.
The government’s significant investments in infrastructure—overhauling the power grid, transportation, and telecommunications—often in partnership with federal funds, are key to this recovery. Billions still remain in disaster recovery and stimulus programs, with the potential to improve infrastructure, utilities, and public facilities if given access to by current administration in the White House. These enhancements can not only improve daily life but also will boost property values and investor confidence.
One of the most reassuring developments is the extension of Act 60’s tax incentives until 2055. This provides long-term certainty—an anchor for both local and international investors. Since its implementation, foreign investment has surged by over 30% in just the past two years, according to El Nuevo Día. This influx fuels demand, especially in residential real estate, where an estimated 50,000 new homes are needed to meet current demand. Currently, about 65 new residences are being built each month, with the average cost of a new unit reaching approximately $361,863 as of December 2024—up 16.5% from 2023.
Despite these promising trends, some neighborhoods—including Palmas, Dorado, Rincon, Condado, and Miramar—are experiencing longer market times—often six to nine months or more. It’s an increasingly noticeable tendency. Many properties are priced by the sellers arbitrarily, without considering current market shifts, leading to prolonged listings and price reductions of 10–15%. It’s vital that owners and developers adapt expectations to the evolving demand, supply, and economic realities.
Tourism remains a cornerstone of Puerto Rico’s economy with over 7-8% of its GDP. In San Juan, typical short-term rentals are booked for about 255 nights per year, with a 70% occupancy rate, generating an average daily rate (ADR) of roughly $138 in local currency. During June 2024–May 2025, the average annual rental revenue per property was approximately $33,000 in local currency. As of July 2025, there are over 5,300 active Airbnb listings in San Juan, and nearly 24,000 across the island—according to Estudios Técnicos Inc. Despite challenges in oversight and regulation, this sector remains the island’s most significant revenue generator, attracting both international and local visitors, even amid rising costs.
Recent assessments highlight tremendous growth potential in Puerto Rico’s pharmaceutical and medical device manufacturing sectors. Recognized by federal delegations as key pillars for the island’s recovery, these industries offer promising pathways for diversification and long-term resilience.
However, uncertainties around federal spending and trade policies pose risks. Puerto Rico’s heavy dependence on federal funds makes it vulnerable to potential cuts, while rising tariffs—particularly on construction materials—have already impacted ongoing projects. For example, a major retail development in the south faced cost overruns, delaying completion. Similarly, hotel and restaurant investments are being postponed or canceled altogether due to rising input costs.
Conversely, tariffs may incentivize the reshoring of industries like pharmaceuticals and aerospace, where Puerto Rico’s deep expertise and strategic location make it an attractive hub. Additionally, ongoing port developments—including the port of Ponce—are positioning Puerto Rico as a key shipping and logistics center for U.S. companies seeking access to Latin America.
While the prospects are promising, it is vital that growth on this beautiful island is pursued with care. Some neighborhoods face longer market times and rising costs, and demographic shifts require us to prioritize sustainable development. It is essential to proceed cautiously to safeguard the well-being of our local communities and the most vulnerable.
Supporting social programs and ensuring access to quality education—aligned with rapid development—is crucial. We must invest in preparing our youth to lead future growth, fostering local entrepreneurship, and cultivating a resilient economy that doesn’t depend solely on external capital injected into real estate alone.
Diversifying the economy beyond tourism and real estate—by encouraging and supporting through effective programs local ownership, entrepreneurship, and innovation—will build a stronger, more resilient Puerto Rico. Not all jobs created by foreign investment are high-paying or sustainable; some risk becoming low-wage or precarious, further marginalizing vulnerable populations, further leading to the demographic catastrophe. Dependence mostly on external capital can expose the island to external shocks. It’s vital to implement transparent, accountable policies that ensure development projects serve the needs of our communities. Investing in education and new AI era skills training to empower residents to participate actively in the new economy, fostering a sustainable and inclusive growth model. Government transparency is fundamental. Development must be aligned with local needs, ethically managed, and rooted in the shared goal of building a resilient, vibrant Puerto Rico—one that preserves its cultural identity and natural beauty.
In conclusion: Puerto Rico in 2025 offers a rare opportunity—an island poised for growth, innovation, and renewal. With thoughtful, responsible development, and unwavering commitment to our people’s well-being, we can shape a future that benefits all residents, sustains our environment, and elevates our island’s unique place in the world.
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