Real Estate Construction in Uruguay has slowed, but the main buyers, Argentines, are still keen to buy
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Most mid to higher-end Real Estate in Argentina and Uruguay are quoted in US dollars. In particular, new properties. The Uruguayan real estate market is “on the rise”. However, the weakening of the US dollar has caused new construction to be halted due to the high cost of local labour.
Uruguay’s property market continues to grow in purchasing, renting and selling properties. Local and international investors are interested in projects presented by the Uruguayan market, particularly those homes that have been promoted directly to the public.
The world of real estate has been impacted by challenges like the dollar’s decline this year and the high cost of labour.
“The activity is dynamic and in constant movement.” Local real estate operators assure that this is how the first half of the year has behaved in terms of slower rate than in 2022”. The most significant number of transactions are located in Montevideo.
Matias Medina, Vice President of the CIU, said that rents “are rising”. A property at a specific price point “sits empty for only 25 days between signing the contract and being conditional.” “. Cordon, Tres Cruces, and Aguada are trending areas where students or singles are most interested in buying property.
All values on the note are in Uruguayan Pesos. According to the September 7 exchange rate, one Uruguayan dollar equals $9.24 Argentine dollars. According to El Pays, the average apartment rent in Cordon is $24,469, while in Tres Cruces, it’s $24,941. In Aguada its $23,140.
The Pocitos region is best for renting for two. The average price of a rental in this area is $41,002. Houses for rent cost $55,287 monthly in Cordon and $49,161 monthly in Tres Cruces.
Carambula reports that homes continue to have a high preference in sales. Montevideo, for example, was where most of these operations were conducted in the first half of 2023 (62%), followed by Canelones (22%), Maldonado (6%), and Colonia (4%)
Medina said that negotiations are more complicated than ever before in the case of the sale. “There is much negotiation, and sometimes a small amount of money for which the transaction is not completed.” “
He also said that “the market has become more static” because “it’s tough to keep the rising trend going, as the dollar is a major factor, and fewer projects are being launched.”
Medina said that many real estate businesses and ventures have been slowed because developers and builders pay salaries and inputs in pesos and sell houses in dollars. The business will be less profitable if the dollar doesn’t rise. .
The CIU vice president stated, “some builders have bought land but still don’t dare launch their project, while others who were planning to purchase, frozen the transaction until things stabilized.”
The effect of this was felt in both the capital and the countryside. Carambula claimed that their homes’ prices should have increased by around 12%. However, the price increase in promoted houses was only about 7%.
Exchange offices and the gap
Medina says that the sales of office apartments are “a bit stagnant” because it is now more lucrative to rent than buy. Luis Silveira is the treasurer for the CIU. He believes the reason is that the “online business has increased a great deal,” which is the leading cause of “large areas that have been vacant in high-profile locations” over the years.
Medina stated that due to the difference in exchange rates between Argentina and Uruguay, there are many enquiries for property in Uruguay by Argentines.
The vice-president of CIU said that people with excellent buying power and those in the lower or middle class also consult. They want to be out of their current situation and to have the ability to spend their small amount of money here.
Source: Translated and updated for La Nacion
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