In contrast with Brazil, Uruguay has a population of just 3.5 million, but it is creating a similar buzz among property investors. The focus here is firmly on the Punta del Este region 130km to the east of Montevideo. Variously described as ‘the Pearl of the Atlantic’, ‘the St Tropez of Uruguay’ and even ‘the Ibiza of Latin America’, Punta del Este is where South America’s jet set come to see and be seen.
Andy Welland, managing director of GEM Estates, says: “Most recent figures show that Uruguay attracts 2.3 million tourist arrivals each year, almost half descending on Punta del Este. Argentines account for the majority of arrivals in Uruguay, and the Brazilian slice of the market is increasing tremendously in recent years. Ecotourism is also forging forward with many innovations on how to protect Uruguay’s biodiversity and natural resources at the same time as gaining benefit from them.”
EM Concepts’ Paul Bartlett says: “Much of Uruguay is untouched and offers excellent opportunity for investment. As well as Punta Del Este property, there are well developed, nearby up and coming resorts such as Piriapolis, which offer excellent investment opportunities. The capital city of Montevideo also has some hidden investment gems for investors willing to hunt for them.”
Bartlett says that capital growth has been running at around eight per cent and 15 per cent annum respectively for the last couple of years, and this trend is set to continue, with some areas expecting to see 15 to 20 per cent capital growth per annum over the coming years.
Investors looking for capital growth should look at villas in and around Punta Del Este, where luxury property is in high demand and very low supply. These investments will also provide a significant, though highly seasonal rental stream (January and February are the peak months). For a steady all year rental income take a look at well located Montevideo property.
Andy Welland says the process of buying Uruguay property shouldn’t present too many problems for careful buyers: “Although the concept of foreign purchase of investment and holiday homes in Uruguay is still quite new, the process of buying property is kept simple by the Uruguayan government. A foreigner has the same rights and incentives as a Uruguayan national – including access to locally based finance. There are no restrictions on transferring capital in and out of the country. The majority of real estate agents in Uruguay add a minimum of three per cent to the selling price for commission. Property buyers should mentally add a maximum of five to six per cent to the listed price to cover extras like notary fees and legal fees.”
First published in October 2008.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
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