Punta del Este, Uruguay: Development from a prime holiday destination to a sought-after primary residence market

In the south of Uruguay, on a peninsula on the Atlantic coast, lies the popular holiday resort of Punta del Este. It has a reputation for offering a high quality of life, with a rich culture and unique natural scenery. Idyllic stretches of coastline with sandy beaches sit alongside green lagoons and expansive countryside. In winter there, the small town has a population of just 12.000, while in summer, both the North and South American jet set have been drawn to the “Monaco of South America” for many years, alongside wealthy holidaymakers and vacation home owners from all over the world. More recently, increasing numbers of buyers have even been relocating their primary residence there. “Since the start of the pandemic, Punta del Este has evolved from being primarily a holiday destination into a sought-after market for first homes. Buyers with children and young couples in particular are moving here so they can enjoy the idyllic scenery, pleasant climate and vibrant cultural life all year round,” says Sandra Sofio, Managing Director of Engel & Völkers Punta del Este. 

Hamburg - (Image source: Engel & Völkers Punta del Este)

Properties close to the sea are in particularly high demand 

At the center of Punta del Este is the area known as the Peninsula, where two internationally renowned beaches meet: The peaceful “Playa Mansa”, which is especially popular with families due to its sheltered location to the west of the peninsula, and “Playa Brava”, which faces out to the Atlantic and is a true surfer’s paradise famous for its rough seas. There are many landmarks in the city, including the ‘Faro del Este’ lighthouse and the ‘La Mano’ sculpture by the Chilean artist Mario Irarrázabal. Buyers here are increasingly looking for apartments in historic buildings in the city center, as well as houses close to the beach. Apartment prices can reach as much as 7,000 US dollars (6,200 euros) per square meter, while beachfront villas are selling for up to 6 million US dollars (5.3 million euros). 

Engel & Völkers is registering a particularly strong interest in real estate in José Ignacio. The coastal resort is located on an Atlantic strip of coastline around 20 minutes’ drive from the center of Punta del Este and is known for its charm as a quiet luxury suburb. The town is a juxtaposition of rural streets, luxury villas with direct access to the sea, and large estates spanning more than 50,000 square meters of land. Prices for houses here command as much as 9 million US dollars (7.95 million euros). 

The tranquil area of Golf in La Brava is equally sought after, with its picturesque coastline and classical architecture. Families with children and elderly citizens are drawn here in particular, looking for properties with large gardens that are close to golf courses, or for modern apartments with sea views. Houses in this area can fetch up to 4 million US dollars (3.5 million euros), while apartments sell for up to 7,000 US dollars (6,200 euros) per square meter. 

Just north of the city is the town of La Barra, which is blessed with picturesque sandy beaches and colorful architecture. This former fishing village is now home to many well-known personalities. Among its celebrity residents are the Argentinean top model Valeria Mazza, and a host of business personalities, politicians and aristocrats. “The charm of La Barra lies in its vibrant nightlife, designer boutiques, street vendors, cultural diversity and many high-end bars and restaurants,” says Sandra Sofio. The majority of searching clients here tend to be looking for beachfront houses, or large finca estates or villas in gated communities. Prices for such properties can reach up to 20 million US dollars (17.7 euros). Apartments change hands for up to 9,000 US dollars (7,950 euros) per square meter. 

Demand is also high for properties in Punta Ballena, another peninsula known for its spectacular sunsets, and for homes near Laguna del Sauce surrounded by unspoiled countryside. Drawn by its Mediterranean-like scenery, European buyers in particular are looking for houses here directly by the sea or in a premium location directly next to the lagoon. Such properties command prices of up to 6 million US dollars (5.3 million euros). Apartments are selling for up to 4,000 US dollars (3,500 euros) per square meter. 

The area known as Rocha, located on a strip of coastline just outside Punta del Este, is also growing in popularity. There are many agricultural estates and large land plots starting at 25 hectares to be found here. Investors from Argentina, in particular, buy development land here, as well as estates directly on the Atlantic with top prizes of up to 12 million US dollars (10.6 million euros). 

International buyers dominate the market 

“The ratio of international property owners is particularly high in Punta del Este. Around 70 percent of the property transactions that take place can be attributed to buyers from abroad, and the majority of these buy homes for their own personal use. Investors only make up around 30 percent of this buyer group,” reveals Sandra Sofio, adding: “Prospective buyers, from other South American countries in particular, are attracted by the low population density as well as the high level of social stability and legal security.” The majority of this international buyer group comes from Argentina (65 percent), Brazil (10 percent), and Europe (15 percent). This strong interest is bolstered by Uruguay's favorable business climate as well as the tax incentives offered to future residents by the government. A residence permit can also be obtained from a combination of an investment starting at 370,000 US dollars (approx. 330,000 euros) and a stay of at least 60 days per year. 

Outlook: Growing demand and rising prices throughout Punta del Este 

For 2022, Engel & Völkers is forecasting a further increase in demand for real estate in Punta del Este, going hand in hand with rising prices. “Up until now there has been a surplus in supply in the premium segment. Since the outbreak of the pandemic though, demand has risen sharply. Supply and demand are relatively balanced at this point. Buyer interest will continue to focus in particular on large estates in rural locations in the region surrounding La Barra. Villas and luxury apartments with sea views are becoming increasingly sought after as well,” Sandra Sofio says.

 You can learn more about Engel & Völkers Punta del Este here: https://www.youtube.com/watch?v=11JNhRDlwM4

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