House prices were down 2.67% during the year to Q3 2022

Puerto Rico’s housing market remains weak. The seasonally-adjusted purchase-only house price index fell by 2.67% in Q3 2022 from a year earlier, following year-on-year declines of 12.67% in Q2 2022 and 6.8% in Q1 2022 and annual increases of 1.67% in Q4 2021 and 7.82% in Q3 2021, using inflation-adjusted figures. Yet quarter-on-quarter, house prices actually increased 8.08% during the latest quarter.

A decade-long housing market downturn

The Puerto Rican housing market has suffered tremendously for most of the decade. The island has experienced a prolonged economic crisis, massive debt, high unemployment and continuing population loss. With US$70 billion in debt and US$50 billion in pension liabilities, Puerto Rico's bankruptcy filing in May 2017 was the biggest in the history of the United States. 

Then in recent years, the housing market showed some signs of recovery, despite the Covid-19 pandemic. During 2021, the total number of housing units sold surged 30.2% y-o-y to 13,289, following an 8.3% fall in 2020. 

However, the housing market has weakened again this year.

Rents, rental yields: good rental yields in San Juan, at an average of 7.89%

Puerto Rico: city centre apartment buying price, monthly rent (2-BR apartments)
  Buying price Rate per month Yield
Condado-Miramar   $ 705,000   $ 3,000 5.11%
Isla Verde   $  450,000   $  3,200 8.53%
Hato Rey   $  145,000   $      975 8.07%
Rio Piedras   $  125,000   $      700 6.72%

Recent news. During 2021, Puerto Rico’s economy grew by 2.7% from a year earlier, according to the International Monetary Fund (IMF), following a 3.9% decline in 2020 caused by the pandemic as well as regular earthquakes. Except the 1.5% growth in 2019 and zero growth in 2012, Puerto Rico’s economy has been contracting for most of the decade.

The economy is projected to grow by 4.8%, after travel restrictions were fully lifted and ample fiscal support for tourism was introduced, based on IMF estimates.