Montevideo: Uruguayan capital of the real estate investment

The year 2016 ended with very good prospects for the real estate market in Montevideo. According to data provided by the Association of Private Construction Promoters of Uruguay (Appcu), the purchase and sale of new construction real estate increased steadily over time with a 13 percent year-on-year increase.

These figures reflect a differential of 22 percentage points with official data for the year 2015, an exercise that investors and real estate agencies called a year of stagnation – in it, prices hardly changed, nor did the demand for real estate significantly increase – .

On the other hand, according to data published by El Observador, the Real Estate Price Index in Montevideo increased by a promising 1.6 percent during the first quarter of this year. This confirms four months of continuous increases in the prices of horizontal property in Montevideo, which is extremely attractive for large investors, both domestic and international.

The data collected by the medium, point to a growth in demand and prices that is maintained without major differences between the main neighborhoods of the capital studied. Among the neighborhoods that the study considers to be the most active in the property market (whether for residential or investment purposes), are the neighborhoods of Carrasco, Parque Rodó and Tres Cruces.

In these locations, there has been an increase in interest for apartment rentals in Montevideo. Although, due to the strong demand and the upward trend of prices, finding rentals in Montevideo is becoming more complex, especially if budgets are more adjusted.

Similarly, other neighborhoods with a more tourist-focused trajectory are also recording an increase in the demand for rental properties. Pocitos is the most popular neighborhood to rent. In it, according to those responsible for Infocasas, the studio apartments, and the 1 and 2 bedroom apartments are the most sought after. Renting an apartment in Pocitos is understood as a demonstration of a high purchasing power, since it forms the tourist center of the capital.

What is the buyer looking for?

Based on the studies published by web portals for real estate sales, apartments rentals in Montevideo are the most demanded by people looking for properties such as housing and as an investment. Thus, Pocitos is the neighborhood most demanded for its proximity to all points of the city, security and services offered.

In its streets you can see the numerous hotel and service complexes for tourists. On the other hand, its closeness to the center has been a powerful claim to attract foreign investors, especially Argentines and Brazilians, who although in the previous two years have reduced their level of investment in Montevideo in the last In 2016 there was a clear improvement in their economies – in 2017 they are expected to return to the growth path -, which has an impact on investment in the Uruguayan capital and also on the volume of exports to these destinations.

The immediate consequence of this strong increase in the demand for housing or land for the construction of new housing has been a similar increase in the prices of real estate to be negotiated. While experts insist that this trend is going to continue, they point out that raising the value of money and increasing employment will empower more families to acquire property ownership.

On the other hand, the real estate development has resulted in new projects that are "eating" houses to build apartments. The most demanded are studio apartments, 1 and 2 bedroom apartments.

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