In the last 20 years, Uruguay´s real estate market has been linked to what goes on in the neighboring country of Argentina, and to a lesser degree, Brazil.
In 1998, all three countries seemed to enjoy a certain bonanza, and this year marked the highest values in real estate for 10 years, both in Argentina and Uruguay. The Mexican financial crisis, followed by the Brazilian devaluation of the currency caused both the Uruguayan and Argentine real estate markets to start a losing trend in its pricing in most areas. By the end of 2001, the situation in Argentina reached its climax, and in early 2002, devaluation followed. But the market, prior to devaluation, had already lost about 20-25% of 1998 values. This held true for the Uruguayan market as well.
When Argentina devalued its currency and defaulted on its debt, this had a strong impact on the Uruguayan economy and real estate market, and property lost a further 10-20$, with these losses being more noticeable in all Uruguayan markets heavily dependent in Argentina, such as the Punta del Este area.
The Uruguayan currency also devalued, but not as sharply as its neighbor, and Uruguay still kept its commitments. A lower priced currency, meant lower cost of living and an attractive environment for foreign investment, both for production, in the farming sectors and in the tourism sectors.
In the farming sector, property had lost about 50% of its value by 2002, when compared to 1998, but it since recovered, and it is now worth about 30-40% over the predevaluation prices.
The higher end areas of Montevideo, such as beach front units in Pocitos, are almost back to predevaluation prices, and these are 95% of what they were back then.
Punta del Este is also enjoying a construction boom, and most property has recovered lots time and is now offered at 1998 values.
When one analyzes all the variables, real estate values in Montevideo and most of Uruguay are fantastic value compared to most other latin American cities as well as to anybody coming from abroad. Uruguay has already been discovered by Europeans, who each summer flock to enjoy the summer when their country of residence becomes too cold.
Montevideo has the River Plate bordering it on its Western side, so there are various neighborhoods that have a fantastic view on to the water. There are over 10 beautiful beaches within the city, and these get very crowded between November and end of March, since Montevideans enjoy them fully. Although technically the River Plate continues a few miles towards the East, Montevideans address the River Plate as the Ocean, since many days the water is salty and more blue than brown.
The Old Town:
Starting from the port area, the first neighborhood one finds is the Old Town. The majority of the buildings are colonial or French style, with very few modern buildings. The government is working hard towards the promotion of this area, since after many years of splendor, it turn mostly into an office centre, with little or no life after 8pm. The edges of the Old Town were densely populated and a bit dangerous, and many buildings were used to provide questionable services to the sailors that dock nearby.
Nowadays, some streets have been turned into pedestrian areas, and in the last 3-5 years, many restaurants have established themselves, together with the Port Market, and this started the revaluation of properties. At the same time, some professionals, mostly from the arts and design background, chose to establish themselves, not only to work, but also to live, so one sees very active refurbishing and improving of the old buildings. The main areas, close to Plaza Zabala and Plaza Matriz, and the pedestrian streets, such as Sarandi, are already very attractive both for living and dining.
Pricing:
We believe this area of Montevideo has the best potencial for capital appreciation. Prices range between 50 and 80 US$/sqft, although, one may go up to 100 US$/sqft if the property has already been totally refurbished. Some listings worth mentioning were:
• A 850 sqft, 2 bedroom, 1 full bathroom apartment, overlooking Plaza Zabala, with incredible views. The French style building is totally refurbished from the outside, and the apartment only needs some paint. Asking price: 75000 US$
• A 400 sqft, 2 small bedroom, 1 full bathroom apartment in 25 de Mayo corner with Perez Castellanos. The inner court, where one takes the stairs to go to the first floor, is charming, with lots of plants. The apartment is very bright, and located 3 blocks away from the Port Market. Asking price: 29,500 US$. Needs some painting.
One note of caution: Bringing back the old splendor to a French Style or Colonial property can be a bit pricey, so beware of properties that are totally falling apart!
Rental returns in this area are only now starting to increase, (about 5%/annum) since Uruguayans do not regard Ciudad Vieja as the best place to live, but this is quickly changing as more an more young professionals choose to live close to where they work, and enjoy the various restaurants, cafes and arts stores.
Next neighborhoods moving through the Rambla (coastal road) towards Punta del Este in Eastern direction):
Next to Ciudad Vieja you will find the Downtown area (Zona Centro). There is a mixture of styles here, and one can find very attractive Colonial and French Style buildings next to a very unattractive apartment building. This is the reason one should actually see the property because the surrounding buildings may greatly decrease the value of the property. Values in the downtown area range between 40 and 70 US$/sqft. There are not many Ocean view properties mentioning in these two areas.
Moving along the Rambla, one starts getting into the more affluent areas in Montevideo.
The first such area would be Punta Carretas, where the Golf Club is located, and properties here, on the Rambla, with fantastic Ocean view go for between 130 and 170 US$/sqft. One can even find the most modern buildings asking as much as 300 US$/sqft.
Following Punta Carretas, you will arrive in Pocitos. Pocitos average property values range between 130-150 US$/sqft for Ocean view properties, and about 30% less for properties a couple of blocks away from the beach and the Ocean.
Buceo follows, and has a very attractive port, so properties here overlooking the ocean have a very nice view. Prices are similar to Pocitos.
Pocitos, Punta Carretas and Buceo are in high demand by Montevideans, both for younger crowds, professionals, and people that do not want to go out to the suburbs.
After Buceo, you will arrive in Malvín, where prices drop to about 100-120 US$/sqft for ocean view properties.
After these neighborhoods one arrives in Punta Gorda and Carrasco.
Carrasco is the highest end area, with lots of trees, and open spaces, and here one definitely is in the suburbs. The Carrasco downtown centre is an attractive cluster of old English houses transformed into commercial property. The rest of Carrasco shows very few properties of 4 storeys, some newer 2 storey buildings (the building code changed about 10 years ago and the tallest building can only be 2 storeys tall now), but mostly one finds very elegant and spacious houses. This is where most corporate and diplomatic people choose to live, and where the best international schools are located.
Apartments start at 200 US$/sqft and lots go for about 30 US$/sqft. Building a new house in Montevideo costs around 70-90 US$/sqft. Luego de esa sección, que vaya lo que figura ahora, bajo el título: Punta del Este real estate market.
Punta del Este is considered the most up scale sea resort in Latin America This fact is probably not well known world wide but this is rapidly changing as more Northern Americans and Europeans are discovering this exceptional market with its real estate values. In Fact Europeans such as Italian, French, Germans, have discovered it around 10 years ago, and use it to live year round in a summer environment, as they retire relatively young and in their winter commute to the properties here since we have opposite seasons. Historically the owner ship make up of Punta del Este was 80% Argentines, and the balance divided amongst other Latin American countries and wealthy Uruguayans. This has shifted in the last few years to accommodate, a larger influx of Europeans and Americans; that make up for the Argentineans that came out of this market with the 2002 crisis. It is also interesting to know that Mexican, Chileans and Central Americans tourists are increasingly discovering Punta and investing here. It is also worth mentioning that the wealthy Brazilians have been investing here in a continuous and steady manner, today owning whole neighbourhoods.
The reasons behind the trend
While the Northern Hemisphere has increased its real estate prices, to all time record levels, here it is still possible to find an excellent property both in quality and location at a substantially lower price than the international prices. One aspect that always surprises foreigners when arriving to Punta, is that they expect to see a line of waterfront buildings, a small town, and two blocks behinds these buildings poverty stricken areas. Punta is far from this, and this is a major surprise to everybody and a strong selling point. The Inside of Punta, between the two seas, is full a beautiful houses, nice lawns, maintained in excellent conditions all year round. Punta offers something for every taste, coastline or inland. Traditionally the families that came to Punta owned houses, but in the last decade there have been a trend towards luxury apartments. This explains the booming Punta del going through at the moment when it comes to apartment buildings.
What makes Punta different?
Travellers, who have been around, note that what makes Punta different to any other sea resort, is the extension of the development present here. In addition to an excellent level of quality as well as the size, the good taste of the properties available that position Punta at the same level of other top level resort. A very important aspect that makes Punta del Este a chosen destination amongst the wealthiest is its security. Walking the streets here poses no problems day or night. To this effect Athina Onasis once said in an interview “the only place in the world that I can walk the street without a body guard, is Punta del Este.” The season is very short but very intensive; lasting only three month, as a result of families going back for the school beginning. The fact that we are getting a different king of public, is slowly extending the season, as March and April are normally beautiful months.
Price Evolution
A more international approach as brought a more demanding public and the market is responding very positively to this. Today, there are more than thirty new developments of superb quality, ready to cater for this new clientele. The value of a sq meter was U$S 1000 and this was true far many years. The value today holds through for standard construction while the newer and luxurious is in U$S2000 sq meter range and up. Houses are sold at a much lower per meter value and the maintenance is none expensive and well organized.
Different Areas
Punta del Este is a cluster of different neighbourhoods, each one with its own characteristics Punta Ballena, Solana, Pinares, Paradas, Peninsula, San Rafael, Beverly hills Rincón del Indio, La Barra, Montoya, Manantiales, Jose Ignacio.
Home 
