Prices per square metre of up to €3,000 in prime locations in Uruguay
International demand for second homes in Punta del Este in southern Uruguay is on the rise, in particular by European clients.
“In popular locations in Punta del Este we’re registering increased interest in high-quality properties right on the coast, mainly from German and Italian buyers. Alongside Europeans, potential foreign buyers primarily come from Argentina, southern Brazil and the US,” said Sandra Sofio, managing partner of Engel & Völkers in Punta del Este.
Punta del Este is one of the most expensive places to live in Uruguay. Buyers are prepared to pay top prices per square metre of $4,000 (€3,000) for villas on Playa Brava, right on the Atlantic coast in the east of Punta del Este.
For freehold apartments directly on the coast, prices range from €1,900 to as much as €5,300 per square metre, depending on the standard of fittings. There is also a high level of demand for second homes on Playa Mansa on the southwest side of Punta del Este on the banks of the Río de la Plata. Detached family homes here cost around €1,500 per square metre.
The top locations in Uruguay include the neighbouring former artists’ colony known as La Barra, the resort of José Ignacio, located some 40km further up the coast, and the town of Rocha. In José Ignacio, for example, high-end residences with a particularly high-fitting standard can reach top prices of €6,800 per square metre.
“The majority of buyers in Uruguay are looking for a superb property as a second home and a capital investment in the upper market segment in the holiday resorts on the Atlantic coast, or at the mouth of Río de la Plata. The increase in demand has seen prices for residential properties in these locations rise continuously over the last five years,” reported Sandra Sofio.
Attractive conditions for foreign buyers
The rising prices in the finest areas of Punta del Este are becoming increasingly detached from prices on the national property market as a whole. The many enquiries from buyers based abroad are responsible for this trend.
“When it comes to the very best properties on the coast with direct sea access or exceptional views, buyers in Punta del Este are paying an average of 35 per cent more than is the case for properties inland,” said Sofio. More and more buyers are placing their trust in the security that an investment in a property offers them.
“Another reason why international buyers hold Punta del Este in high regard is the fact that there are no restrictions imposed on land plot owners from abroad, as well as the fact that all high-end residential properties are listed in dollars,” Sofio added.
In José Ignacio, many property owners use their homes as a capital investment, renting them out to holidaymakers during the vacation season. “In high season, between Christmas and the middle of January, it is possible to make up to €38,100 in rental income.”
Due to the large excess in demand over supply, the average time-to-market for premium residential properties has dropped in the past 12 months and now lies between six and 10 months, provided a property is on the market at a realistic asking price.
Engel & Völkers is optimistic about the future development of the residential property market in Punta del Este. The city is responding to the high level of demand for homes with a numbers of new development projects. The residential tower Trump Tower Punta del Este on Playa Brava is currently under construction. The 129 exclusive apartments will be for sale for between €495,000 and €1.9 million.
“Building projects like these are attracting more foreign property investors to Punta del Este. These investors are profiting too from the country’s attractive tax laws,” said Sofio.