In the last 20 years, Uruguay’s real estate market has been linked to what goes on in the neighboring countries of Argentina and Brazil. In 1998, all three countries enjoyed high values in real estate, especially in Argentina and Uruguay. The Mexican financial crisis, followed by the Brazilian devaluation of the currency, caused both the Uruguayan and Argentinean real estate markets to start a losing trend in its pricing in most areas. By the end of 2001, the situation in Argentina reached its climax, and in early 2002, devaluation followed.
But the market, prior to devaluation, had already lost about 20% to 25% of 1998 values. This held true for the Uruguayan market as well. When Argentina devalued its currency and defaulted on its debt, this had a strong impact on the Uruguayan economy and real estate market, and property lost a further 10% to 20%, with these losses being more noticeable in all Uruguayan markets heavily dependent on Argentina, such as the Punta del Este area.
The Uruguayan currency also devalued, but not as sharply as its neighbor, and Uruguay still kept its commitments. A lower-priced currency meant lower cost of living and an attractive environment for foreign investment.
The higher-end areas of Montevideo, such as beachfront units in Pocitos, are almost back to pre-devaluation prices. Punta del Este is also enjoying a construction boom, and most property has recovered lost time and is now offered at 1998 values.
Today, you can still snag a bargain on real estate in Uruguay by buying property at auction.