Buying Real Estate in Uruguay

Punta del Este, South America’s premier resort

Uruguay is starting to make a bright blip on the radar screens of many North Americans and Europeans looking for a second home, a new place to live, or a promising offshore real estate investment. Uruguay has beautiful beaches, a temperate climate, and great recreation. When it is winter in North America and Europe it is summer in Uruguay. And in Uruguay foreigners can buy real estate with the same rights and protections as residents.

Uruguay’s Quality of Life

Climate and Terrain

Uruguay is located in the temperate zone of the Southern Hemisphere and has four seasons. Temperatures average 70° F to 80° F (21° C to 27° C) in summer and 50° F to 60° F (10° C and 16° C) in winter.

Most of Uruguay is rolling grassy plains, ideal for raising cattle and sheep. The soil and climate are also suitable for raising many types of crops including grains, citrus, wine grapes, and trees for pulp and lumber.

The eastern coast has 200 miles of wide sandy beaches, dunes, and large lagoons which are dotted with summer resort communities, including the continent’s premier resort, Punta del Este.

Natural Hazards

There are no earthquakes or hurricanes in Uruguay. On occasion, there are strong southwest winds that come from the Argentine pampas. There are also occasional droughts.

Population statistics

Uruguay has the highest literacy rate in Latin America. Uruguay has a developing middle class and the lowest poverty level in Latin America.

Attitudes toward foreigners

Many vacationers and expatriates testify that Uruguay (especially Punta del Este) is one of the most tolerant places on earth. In Uruguay, people and relationships are generally more important than a schedule.


Safety is the number one reason people from other South American countries relocate their families to Uruguay. Uruguay is known for having the lowest rate of crime in Latin America.

Uruguay does have robberies, but armed robberies and rates of assault are low. Petty thefts such as purse snatching and camera grabbing are not uncommon in Uruguay’s capital, Montevideo.

Punta del Este is often described as being crime free. It is most certainly one of the safest places in Latin America, and possibly one of the safest communities in the world, but it is not totally crime free. Home and car burglaries have been on the rise and many people with single family homes use a home security service to guard against break-ins while they are away.

Medical Care

Uruguay has 10 hospitals and approximately one physician per 260 persons. Everyone I have met in Uruguay speaks highly of his or her doctor. I have also heard more than one expatriate claim they have received more caring and attentive medical attention in Uruguay than they received previously in their home country.

Some of the hospitals in the communities around Punta del Este are just starting to experience peak times when there are more patients than rooms available. This is due to the increased migration to the area of both foreigners and Uruguayans.

The best option for expatriates coming to Uruguay may be the British Hospital in Montevideo. The British Hospital is said to provide the highest standard of care in the country and many of the doctors and employees speak English.

My basic plan for a 48-year-old male is 1800 Uruguayan pesos per month (about 90 US dollars) for full coverage and a private room if I am hospitalized. (All hospital fees are in Uruguayan pesos, but I will convert them to the current equivalent value in US dollars to provide a comparison.) In addition to the monthly plan fee there are usage costs: 5 US dollars to see a doctor, 10 US dollars to see a specialist, 12.5 US dollars for urgent care, and 15 US dollars to have a doctor to make a home visit.

The British Hospital medical plan has optional add-on services which include:

Emergency mobile care: 12.75 US dollars per month

The option to have surgery in the USA: 12.25 per month (insurance with deductible)

Uruguay’s Investment Climate

Assessing the investment climate of South America can be puzzling to the causal Northern Hemisphere observer. There are reports about booming economies and great investment opportunities along with stories about political tensions and populist government leaders. To make sense of this puzzle, it is important to be conscious of the fact that South America is made up of many different countries, each with its own political and economic characteristics.

Levels of government transparency

One of the distinctions between Uruguay and its neighbors, Brazil and Argentina, is its significantly higher level of government transparency. Transparency International is a Berlin-based organization that ranks and scores countries by their levels of perceived corruption (the abuse of public office for private gain). The scores range from 10 (squeaky clean) to 0 (very corrupt). A score of 5.0 is the number Transparency International considers the borderline figure distinguishing countries that do and do not have a serious corruption problem.

For 2009, Uruguay was ranked the 25th least corrupt country out of 179 countries, with a score of 6.7. It is the second least corrupt country in Latin America after Chile. For comparison, here is the ranking of Southern Cone countries:

Chile ranked 22 with a score of 7.0

Uruguay ranked 25th with a score of 6.7

Brazil ranked 72nd with a score of 3.5

Argentina ranked 105th with a score of 2.9

Economic trends

Almost any report or discussion of Uruguay’s economy will make reference to the 2002 financial crisis. The problems began in 1999 when neighboring Argentina and Brazil (who had accounted for half of Uruguay’s exports) fell into a recession. Argentina’s 2001 debt default contributed to a run on Uruguayan banks, resulting in massive withdrawals from US dollars accounts. The financial instability of Argentina and Brazil, combined with a breakout of foot-and-mouth disease, sent Uruguay into a financial crisis. As a result, unemployment levels rose to more than 20%, real wages fell, the peso was devalued, and the burden of external debt doubled. Per capita GDP plummeted from $6,300 in 1998 to $3,700 in 2002. The number of Uruguayans below the poverty level reached 40%.

Despite the severity of the situation, Uruguay’s financial indicators remained more stable than those of Argentina and Brazil. The sitting government mitigated the crisis by working with the IMF (a debt swap with private-sector creditors in 2003 extended the maturity dates on nearly half of Uruguay’s then $11.3 billion of public debt and helped restore public confidence), increasing exports, and attracting foreign investment. The economy recovered slightly in 2003 and boomed in 2004, with a 12% growth rate.

Over 6% growth in 2005 drove real GDP back to its pre-crisis levels. In 2007, Uruguay paid off its $1.1 billion in IMF debt and continues to follow a sound economic plan set by the IMF in 2005. Also in 2007 Uruguay’s rate of Foreign Direct Investment as a percent of GDP was higher than either of its neighbor’s, Argentina or Brazil.

At this writing, every aspect of Uruguay’s economy is growing to the edge of its capacity. Exports are increasing, every major shopping center is expanding, and a labor stretch is pushing up real wages.

Political Trends

Uruguay has a long history of supporting democracy and free enterprise but has a soft spot for socialist ideals. This is most likely a result of Uruguay’s history.

Uruguay’s national high point was from 1900 to 1950 when the market demand for beef, wool, and leather was strong due to much of Europe being out of production during World War I and World War II. The booming economy produced enough surplus wealth to finance the many social programs that are introduced by President Jose Batlle y Ordonez. Due to Uruguay’s wealth, progressive social programs, and stable democracy, Uruguay was called “the Switzerland of the Americas” and attracted many European immigrants. Many see the early 1900s as Uruguay’s golden era.

(However, when the economy weakened in the mid-1950s, the weight of the country’s social programs and large government payroll contributed to the country falling into a financial crisis.)

Many Latin American countries, including Uruguay, implemented free-market reforms in the 1990s in order to compete in a globalizing economy. Economic advances were made, but many individuals who were witnessing greater competitiveness, increasing income inequities, and rising unemployment felt less secure in a free-market environment. As a result, Latin America is experiencing a revival of left-wing parties.

The new left ranges from populists—who blame “the financial class” and the free market for all of their problems and are moving to nationalize industries and implement protectionist measures (like Venezuela’s Hugo Chavez)–to those that speak of adjusting the equity balance between the portion of the population that competes in the global marketplace and the portion of the population that benefits from government employment and entitlement programs.

Uruguay joined the trend of moving to the left with the election of President Tabaré Vázquez, who took office in March 2005. Before his election to office, Vázquez was critical of his predecessor’s warming relations with a “hegemonic” United States and promised to review the recently proposed Bilateral Investment Treaty. He said he favored closer ties with MERCOSUR (a southern cone trading block), higher external tariffs, import quotas, and public works projects financed by higher taxes.

There was concern among the world financial community that if Uruguay adopted protectionist policies combined with increased social spending (in the face of their current debt), the economy would again collapse. However, despite the worrisome pre-election saber rattling, Vázquez named pragmatic accountant Danilo Astori as Finance Minister and continued to implement sound and accepted macroeconomic policy.

Vázquez has successfully encouraged foreign investment and increased trade opportunities to keep the Uruguayan economy growing. He is increasing social spending but is doing so within the framework of a budget.

Uruguay’s Real Estate Markets

Uruguay’s agricultural land has been especially popular with international investors, with approximately 25% of Uruguay’s land mass being purchased by foreign interests in the last eight years. Properties in Uruguay’s coastal communities are popular with individual foreign buyers as second homes, full-time residences, and for pure investment.

Punta del Este, South America’s premier resort

Punta del Este is a peninsula that is the dividing point between the Rio de la Plata (River of Silver) and the Atlantic Ocean. The west (or river) side of the peninsula is called the Mansa side (calm or tame side).  The east (or Atlantic Ocean) side of the peninsula is the Brava side (brave or wild side), where there is ocean surf and stronger currents. The peninsula is only four to six blocks in width.

The resort development of Punta del Este has expanded off the peninsula, both west and east along the mainland coast. What is now referred to as “Punta” includes almost 40 miles of coastal development and includes a variety of unique communities. Some of the most famous Punta beach communities extend east of the Peninsula on the mainland and include José Ignacio, Montoya, La Barra, and San Rafael.

In summer (mid-December through February), Punta’s population increases, reaching a peak of several hundred thousand vacationers. Most of the summer visitors are from neighboring Argentina and Brazil, with a smaller (but growing) percentage of visitors from Europe and North America.

Punta is an inclusive community that is popular with people from many economic backgrounds, including celebrities and wealthy families, because of its reputation for being one of the safest and most tolerant places in the world.

Punta has an almost endless menu of things to do and see 24 hours a day. Popular activities include golfing, tennis, camping, mountain biking, horseback riding, and hang gliding. Water sports include beach fishing, windsurfing, kite-surfing, board surfing, boogie-boarding, kayaking, scuba diving, parasailing, and jet skiing. For boat owners there is sport fishing, sailing, and water-skiing. There are also charter boats that will take you fishing or whale watching or will ferry you across to nearby Gorritti Island.

Along with summer come sporting events and tournaments, which include yacht racing, polo, golf, tennis, and seven-a-side rugby. There are also music festivals, a film festival, a rodeo, and fashion shows (including fashion shows on the beach). Evening entertainment includes music concerts, cinema, and the theater. And for those that don’t sleep, there are world-famous bars, discos, and nightclubs that stay open until dawn.

Punta offers many fine dining experiences. Fresh seafood, barbeque, and Italian food are the most popular. Shopping opportunities range from a variety of top designer shops to a craft fair where you can buy locally handmade woolen goods.

Real estate in Punta del Este includes apartments, single-family homes, and homes on large, estate-sized parcels of land (called chacras). With all property types, there is a broad range of settings, amenities, standards of luxury, and price ranges.

Punta del Este has an extensive selection of property types and price ranges. Condos range from 50,000 to 3 million US dollars; single-family homes sell in a range from less than 100,000 to over 4 million US dollars; and homes on large estates sell in a range from 400,000 to over 10 million US dollars.

Even with a very high rate of continuous new construction added to Punta’s inventory of apartments and single-family homes each year, real estate values increased an average of 13 percent in 2007, with some properties going up in value as much as 50%.

Summer rentals in Punta range from small well-located condos renting for $4,000 for the peak month of January, to large single-family beach homes that rent for $80,000 during the month of January.

Rocha, Uruguay’s  new frontier

Uruguay is divided into 19 administrative subdivisions referred to as “departments” (like States or provinces). The Department of Rocha includes the Atlantic coastline from eastern reaches of Punta del Este to the Uruguay/Brazil border. The capital of Rocha is the city of Rocha (with the same name as the Department). This large area with a small population of approximately 70,000 is Uruguay’s coastal frontier, with miles of beautiful and pristine sandy beaches. The Department of Rocha is characterized by vast cattle grazing lands with scattered palm trees, large lagoons, and flocks of running nandús (a large flightless bird similar to an ostrich). The Rocha coastline has several vacation communities which are all unique.

Rocha has long been a place for outdoor adventures which include camping, beach sports, fishing, surfing, and horseback riding. (The best surfing areas are around La Paloma, La Pedrera, and Santa Teresa, just east of Punta del Diablo.)

Rocha provides the opportunity to own very large tracts of pasture land, chacras (single-family homes on 1- to 5-hectare parcels), and homes in a variety of small to medium-sized coastal communities. But what makes Rocha unique is the opportunity to own large tracts or small parcels of true beachfront property in one of the most environmentally pristine places left on earth. There is talk of major resort chains seeking property along Rocha’s pristine Atlantic coastline, as well as discussions of building an airport.

In addition to the expansion of coastal vacation communities, Rocha is becoming a place of expanding commerce, which includes large-scale olive orchards, plans to construct the country’s largest dairy farm, and a revitalization of the harbor located in La Paloma.

Rocha has something for every price range.  The oldest, largest, and most well-known beach resort in the Department of Rocha is La Paloma. La Paloma is 100 kilometers (62 miles) east of Punta del Este. It has a population of approximately 5,500 people that grows to 30,000 in January and February.

La Pedrera is a small picturesque community 10 kilometers (6 miles) east of La Paloma that is seen by some as a more fashionable alternative to La Paloma.

Continuing east from La Pedrera, there are three beach communities located in a national park: Cabo Polonio, Valizas, and Aguas Dulces. Cabo Polonio has no streets or electricity and is only accessible by four-wheel-drive trucks that go across the dunes from the main road or on horseback. Many of the buildings in these three communities have title and tax issues. They are great places to visit but are not recommended as a real estate opportunity.

Going further east toward Brazil is Punta del Diablo. Punta del Diablo is a working fishing village that has a history of attracting surfers and budget travelers who stay in inexpensively constructed (but creative) vacation rentals. The area is starting to show signs of gentrification as an international crowd builds more substantial homes and vacation rentals. Many beach lots in Punta del Diablo have more than doubled in price in less than a year’s time.

Uruguay’s downside

The two most common objections I have heard about Uruguay from potential buyers is that a) Uruguay is too far away and b) not as many people speak English as in other Latin American options. Both of these observations are true. Uruguay is far away, and anyone wanting to fit into Uruguayan life will need to study Spanish. However, for many people a long flight and learning Spanish is a low entry barrier to one of Latin America’s best lifestyle and real estate opportunities.

More information on Real Estate in Uruguay
Contact the author of this article – David Hammond
David Hammond is the author of Buying Real Estate in Uruguay, an ebook available to purchase and download

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  1. Shelley May 18, 2010 at 9:44 pm

    Excellent article! It’s the best I’ve ever seen yet on this magazine/website! Very straightforward with good detailed information that is useful to know. Thank you!

  2. James McDonnell June 4, 2010 at 12:28 am

    The prices for Montevideo on the Uraguay Property site were ridiculous! Why not just move to Beverly Hills! Really insulting…no thanks.

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