Punta del Este real estate prices up 80 percent in 3.5 years

The results of a three-and-a-half-year study of Punta del Este real estate sales prices and summer rental rates have been released. Punta del Este, Uruguay is South America’s most popular summer beach resort destination with a growing international community of part-time and full-time residents.

 Property values up 80 percent in three and a half years
A survey of Punta del Este real estate activity conducted between June 2007 through the end of 2010 by the consultancy company, Valora, released its findings in the publication Situación Inmobiliaria. According to the survey, average real estate prices in Punta del Este went up 18 percent per year, for a total increase in average sale prices of 80 percent during the 3.5 year study period.

In December 2010, the statistically average Punta del Este sale was a 234 square meters (2,518 square feet) home sold for 1,792 US dollars per square meter (166.5 US dollars per square foot).  

Summer rental rates up 10 to 18 percent
The highest demand for summer vacation rentals in Punta del Este is during the month of January. According to the survey, January rates for Punta del Este vacation rentals went up 10 to 18 percent, depending on the neighborhood.

The average Punta del Este single-family home vacation rental was 197 square meters (2,120.5 square feet) and rented for 11,820 US dollars for the month of January.

The average Punta del Este apartment vacation rental was 77 square meters (828.8 square feet) and rented for 7,700 US dollars for the month of January.

Is Punta del Este’s real estate market a bubble?

Valora predicts that demand will remain strong for Punta del Este real estate. As they explain, while interest rates remain low and currencies of emerging countries in South America’s Southern Cone remain strong, capital will come to the region, and one of the logical destinations for incoming capital is real estate.

The prediction of a continuing strong real estate market is echoed by Francisco Bistiancic, the head of the Cámara Inmobiliaria de Maldonado (CIM) (Real Estate Chamber of Maldonado). In an article for the Uruguayan newspaper, El País, Bistiancic explained that Punta del Este’s strong real estate market is due to its increasing popularity as an international tourism destination, the popularity of Uruguay as a place to have a second residence, and Punta del Este’s reputation for safety.

Bistiancic says he cannot foresee a real estate bubble like the one that occurred in the US or Spain because buying real estate with credit is rare, and usually extended for no more than one or two years. The vast majority of properties in Punta del Este are owned outright with no mortgage.

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