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Uruguay The Real Estate Market in Uruguay
Elaine 
A freelance writer asked me some questions for an upcoming article in NuWrite Investor and I thought I'd share my responses here. I have lived in Uruguay for just under a year and I deal with expatriates on a regular basis - that is the background I am coming from.
1. What is the current state of the real estate market in Uruguay?
This is a quite a vague question and therefore is quite difficult to answer. Until recently I think many people saw the property prices in Uruguay as rather low in comparison to those in the USA or Europe. However with the current recession and the real estate bubble "bursting" so to speak, Uruguay's prices have remained stable and so they may not appears as such a bargain anymore (although they remain quite affordable).
As is to be expected, real estate in the city is much more expensive than that in rural areas. Apartment and house prices in cities such as Montevideo and Punta Del Este are gradually rising toward prices seen in more developed countries, whereas land prices in rural Uruguay are still very low. There are exceptions to any overview - some mansions in Punta Del Este match or in many cases exceed real estate prices seen in the US, and some beautiful old buildings needing restoration in poorer urban areas can still be found at incredible bargain prices.
2. What are the special qualities that make Uruguay a desirable place for property ownership?
Uruguay has a lot to offer and has become especially popular with retirees and those who work online. Uruguay is a small country with a small capital city, as such it has quite a relaxed vibe with much less stress than cities up north. It is a relatively safe and politically stable (especially in the context of South America) and there are many beautiful beaches and coastal areas within easy reach of the cities. To see a more comprehensive list of the reasons people have stated for moving to Uruguay check this article in our Guide To Uruguay.
3. Which areas of Uruguay are popular with vacation home buyers and/or property investors?
The coastal areas are most popular with expats. Many settle in the capital city of Montevideo, most often in the more upper class suburbs of Pocitos, Buceo and Carrasco. Many also buy vacation properties in the exclusive beach resort towns of Punta Del Este, Jose Ignacio, La Barra, Piriapolis and Atlantida. A few people also show interest In Colonia Del Sacramento and its surrounding areas.
Personally I think the smart ones should snap up some property in the beautiful coastal towns further north such as La Paloma, La Pedrera, Punta Del Diablo, La Esmerelda etc.
I think one thing that will really catch on over the next few years is renovation work in Ciudad Vieja (the oldest part of Montevideo). The colonial buildings there are so beautiful but they are falling to pieces and are just waiting for someone to renovate them. The government has started schemes to offer assitance to people taking on these tasks but I don't know the exact details of these plans.
4. What are the rules and requirements for foreign ownership of real estate in Uruguay?
I don't know the exact requirements, they seem pretty relaxed. For more information on this you could contact the writer of the Coastal Uruguay Blog, he seems to be involved in real estate. It would seem to me that there are very few stipulations and that it is rather easy for foreigners to purchase property here. An article written by a Uruguayan lawyer specializing in foreign property investment better explains this- you can read it in our article library. He is at LVM Lawyers in Montevideo, he is one of the foremost contacts for real estate and assistance for relocating expatriates.
5. What should foreigners buying real estate in Uruguay beware of?
Things are not made, built or finished to the same standards as they are in the USA or Europe. It is very difficult to find reliable contractors who do a decent job, many times they cut corners and use sub-standards materials. If you want something done well then you will really have to watch them at every single step and make sure it is done right. Often times high quality building materials simply aren't available (or are VERY expensive to import). This can be a big challenge if building from scratch or renovating.
6. What do you foresee happening in the Uruguay property market over the next few years?
Hopefully not the same thing that happened in Ireland! Uruguay bears many many similarities to Ireland (25years ago) and they seem to be building a lot of apartment blocks in random places rather than showing respect for the character and history of an area. If the government doesn't step in I think many faceless buildings will be thrown up in any area they can fit one and the market will become saturated fairly quickly. The population is small after-all and the wages are low so many people rent rather than buy.
The infrastructure is simply not there in most parts of the country and until it is upgraded then development will remain restricted to Montevideo and the better served coastal areas of Maldonaldo and Rocha. One trend that is starting to catch on is providing furnished short-term accommodation. There is an odd rental culture in Uruguay which makes it VERY difficult for foreigners to rent. You can read a more detailed synopsis of the situation in our Guide To Living In Uruguay , but basically a very large security deposit is required and longer-term furnished apartments are prohibitively expensive. If people were to buy and furnish apartments for rental I think they could yield a decent income but I'm not sure of what regulations govern this.
7. How much should buyers expect to spend? [a few examples (size, type, and price) to give our readers an idea would be nice].
This is something I am not in a position to answer. The best I can say is look at Buscando Casa website to get an idea of the listed prices for different property types in different areas. The final article was published in August 2009 and is available here
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