International demand for second homes in Punta del Este in southern Uruguay is on the rise, thanks to clients from Europe in particular. “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 USA,” 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 US dollars (approx. 3,000 euros) 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 2,500 US dollars (approx. 1,900 euros) to as much as 7,000 US dollars (approx. 5,300 euros) 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 2,000 US dollars (approx. 1,500 euros) per square metre.
The top locations in Uruguay include, besides Punta del Este, the neighbouring former artist’s colony known as La Barra, the resort of José Ignacio located some 40 km 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 9,000 US dollars (approx. 6,800 euros) 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 the 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 investment 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 percent more than is the case for properties inland,” said Sandra 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 US dollars,” Sandra Sofio continued.
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 50,000 US dollars (approx. 38,100 euros) in rental income,” said Sandra Sofio.
Due to the large excess in demand over supply, the average time-to-market for premium residential properties has dropped in the last twelve months and now lies between six and ten months, provided a property is on the market at a realistic asking price.
Engel & Völkers is extremely 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 650,000 US dollars (approx. 495,000 euros) and 2.5 million US dollars (approx. 1.9 million euros). “Building projects like these are attracting more and more foreign property investors to Punta del Este. These investors are profiting too from the country’s attractive tax laws,” said Sandra Sofio.
Punta del Este is the “Saint-Tropez of South America”
Punta del Este is situated some 135 km east of Uruguay’s capital city Montevideo. The coastal resort lies at the outermost tip of the mouth of the Río de la Plata and is set partly on a peninsula. This location means that Punta del Este is surrounded by sandy beaches for the most part. Just behind the promenade there are many mansion properties to be found, set within parkland surroundings. “Since 1960, Punta del Este has grown more and more into a meeting point for the international jet set, and has become something of a ‘Saint-Tropez of South Americaʼ,” commented Sandra Sofio. “This city has an excellent standard of living to offer, with a good infrastructure and wonderful lagoons and national parks. Polo players, golfers and water sports enthusiasts are also in their element here,” Sandra Sofio added.