Investing in real estate in Uruguay: Where to buy plus prices by area

RIO DE JANEIRO, BRAZIL – Uruguay plans to reopen its borders in September to fully vaccinated foreigners. The news was not only celebrated by the tourism sector, but also by the main developers and real estate companies in the country.

The announcement has triggered a boom in inquiries and a surge in transactions is expected in the coming months, led mainly by Argentines.

“We have started to notice inquiries. In 2 days we had more calls than in the past 5 weeks. We have 40 bookings from Argentines who will come to sign contracts, these clients will probably decide to buy one more property when they reach the country,” said the CEO of Banchero Real Estate developer Teófilo Banchero.

For Uruguayan developers, Argentines are major players. Last year, 15% of the total number of units sold were purchased by the local public. But as a consequence of the pandemic and restrictions for entering Uruguay, the number has been decreasing.

“It is already noticeable in inquiries. There is concern among those who have signed contracts and are now thinking about buying another property to diversify their investment,” the real estate agent said.

Montevideo is currently the main attraction. The Promovida homes are consolidated as a good investment option, with affordable prices, low expenses and a rental return of between 5% and 6% in dollars.

Prices in the Uruguayan capital are low, which ensures investors liquidity should they need the money spent. “This place offers a consistent return, unlike Punta del Este, which depends more on tourism,” added Fabián Kopel, director of Kopel Sánchez.

“We are recommending Uruguayans to invest now in real estate because we are expecting a real flood of purchases, which will push prices up, logically due to the increase in demand from foreigners,” Kopel said.

According to the specialist, prices remained stable from March 2019 to date. In Montevideo an average of US$70,000 is needed today to buy a studio apartment and a minimum of US$95,000 for a two-bedroom apartment in downtown areas.

Prices are higher in Carrasco. A studio apartment costs at least US$100,000 and a two-bedroom apartment is priced at a minimum of US$150,000.

“Although we have many inquiries from investors looking to invest in real estate in Uruguay because of the legal security, today most of those who call us are looking for a change of life and to settle in the country,” Kopel points out.

The tax requirement for individuals looking to live in Uruguay consists in having US$400,000 to apply for a Tax Holiday for 10 years. “The units do not need to be completed as a purchase requirement and there is no obligation to invest the full amount. By signing a commitment, one can purchase a home,” he points out.

This point is relevant because “someone who comes can sign a contract committing 20% and then pay after completion of the project. Therefore, it is enough to come with US$100,000 from abroad to begin the fiscal residence and if someone buys on plan, they have 3 years to pay the balance,” he adds.

Projects farther away from the city doubled their prices

“People are waiting for this opening. I have reservations taken for lots in Carmelo Golf from Argentines who want to move here and are anxious to finalize the purchase. There is great expectation and anxiety. This decision is very positive for us,” said Ricardo Mataloni, commercial director of Vitrium Capital.

“The Argentine investment market is very anxious. As soon as this happens, although our sales pace is very good, the number of transactions will shoot up even further,” he concluded.

The developer is marketing a project in Montevideo with an investment of US$10.5 million “we were able to sell 20% of the total building in only two weeks, these numbers would be even higher with this initiative,” he acknowledged.