Montevideo’s real estate market is in a recession
Montevideo’s real estate market is in a recession, after a surge in sales from 2003 to 2011, because of a slowdown in the economy and higher property prices. The number of transactions was down 10 % in 2016 compared with a year earlier, and down almost 40 % from 2014.
In the past, the market was driven by investors who bought properties for rent, but today that market has disappeared, and demand is driven by retirees and young families moving into bigger homes.
Uruguay’s economy has been affected by economic and political turmoil in Argentina and Brazil and by a drop in commodity prices. Uruguay’s economy is very dependent on what happens in the Argentina and Brazil economy.
There is no multiple listing service in Uruguay, which makes it difficult to track sales and pricing information. Properties often sell for as much as 20 % below asking price.
The majority of sales are in the lower end of the market. Luxury property transactions are very few, but prices have remained flat, with owners unwilling to lower prices.
The most popular areas for home buyers are waterfront communities such as Pocitos and Punta Carretas.
International buyers represent a very small percentage of the overall market, but foreign sales are growing steadily. Most of the growth in international buyers is coming from the United States and Europe.
Argentines were once active buyers, but changes in currency regulations imposed by the Argentine government and economic turmoil have slowed the market.
The bulk of buyers are Uruguayans who work in the capital. Second-home buyers typically focus on coastal areas, such as Punta del Este, which is 80 miles to the east, rather than on Montevideo.
There are no restrictions on foreigners owning property in Uruguay. Deals are usually transacted in United States dollars and in cash; it is difficult to get a mortgage, agents said.