The Only Way is Up for Uruguay Property

Often overshadowed by its larger and louder neighbours, Brazil and Argentina, Uruguay has so far largely escaped the world’s attention when it comes to property investment. But this small country has much to offer – competitive property prices, political and economic stability, a booming economy as well as stunning scenery.

Uruguay is one of the richest countries in Latin America and has successfully managed to shake off the shackles of high unemployment and poverty so common in other South American countries. Recent figures published by the Central Bank of Uruguay show a booming economy – GDP growth for Q1 2008 was a massive 10.9% and the country is set for an annual increase of 6.8%, slightly higher than 2007. Forecasts for 2009 are also promising with the Central Bank predicting around 4.5% growth. Further good economic news came in May when unemployment figures reached a record low at 7.2%.

With over 650km of coastline and an excellent climate, Uruguay has much to offer the tourist and the country has several well-established holiday destinations with Punta del Este one of the most popular, particularly with Argentinians and Brazilians. According to the Ministry of Tourism, statistics for Q1 2008 saw a widespread growth in visitor numbers, particularly in resort areas such as Costa Oceánica with a massive 130.8% increase and Colonia with a rise of over 50%.

Uruguay is already on some property investors’ radar – Argentinian and Spanish in particular – and the Ministry of Agriculture calculates that around 25% of Uruguayan land was bought by foreigners between 2000 and 2006. Foreign investment is positively encouraged in Uruguay and there are generally no restrictions on the purchase of land or property.

Several large real estate projects are underway; one of the largest is the US$200 million complex (made up of 15 apartment and office blocks) currently under construction in Ciudad de la Costa in Canelones. Foreign capital accounts for over 70% of this particular project. Large-scale investment is also in place in Punta del Este where the Brazilian company, Fasano, is investing US$100  million in a hotel and villa complex.

Since the recession in 2002, property prices in Uruguay have recovered, but still offer exceptional value when compared to many European countries and those in next-door Argentina. Land is particularly cheap with agricultural land costing around US$2,000 per hectare, a fifth cheaper than Argentina. Property in Montevideo costs from US$50 to US$80 per square foot (US$100 if fully refurbished) and homes in coastal resorts also offer highly competitive prices.

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Date: 7/21/2008