As you probably know, there are no statistics for real estate sales in Uruguay. About all there is are informal polls of realtors hopping you get a semi straight answer.
So here it goes. At the end of last year, about the only sector that was racing ahead was high-end Punta del Este flats, the $750K an up market. The Argies are bringing suite cases full of money into the country (literally) and dumping it into property. This is the usual end-run game for Argentines who fear the rath of their government in its many different forms. I’ve never understood this as a strategy for wealth protection? Why would you put your money in an illiquid, volatile asset if you’re afraid of losing it? Seems like a UY bank account, with its reasonable secrecy protection would be a better idea.
As far as the middle market: 100K - 250K, traffic is down as compared with last year, buying is a bit more muted. So far, prices are stable, but I can’t see much in the way of upward pricing pressure.
My call for 2009 is mostly flat prices unless the bottom falls out of the Argentine economy which is just a matter of time. The country is not as tied to the Argentine economy as it was, but the impact will be brutal in Punta’s high-end, less so in the middle market
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March 16th, 2009 at 10:44 am
Just checking Steve.
Hope all is well. Enjoyed meeting you and Chris during Christmas.
April 2nd, 2009 at 9:37 pm
“…but the impact will be brutal in Punta’s high-end, less so in the middle market”
I wrote a very long and detailed rebuttal to this assessment, then lost it when I submitted the comment without previously typing in my name…
So here it goes in short: I disagree. Argentines can smell a crisis, and with this one they decided they are BUYING Punta del Este, not selling it. There will be cases of people strapped for cash, but the market as a whole is holding up incredibly well. More than one developer I know just jacked prices up. All new developments are selling, including multimillion dollar properties. Buyers come from more places than ever before, but Argentines are still dominant, and buying strongly.
The upper middle class from wherever is coming in to live year-round. Prices and demand in neighborhoods considered “year round” for proximity to private schools and shopping are extremely strong.
The lower end of the market is helped by non traditional buyers such as Europeans, Americans, Canadians, etc. who are taking advantage of a product considered out of fashion or whose original Uruguayan and Argentine owners have left, to vacation in places like La Paloma, La Pedrera and Brazil.
So it’s hard to put together all these conflicting trends (disappearance of middle class from Uruguay and Argentina from Punta del Este, replacement by foreigners, global meltdown, Uruguay increasing popularity as expat destination, etc.) into a prediction for the year, but considering how things are the world over, we’re holding up amazingly well, I would say.
April 3rd, 2009 at 1:34 pm
Margarita-
Well……I sure hope you’re right. Rather be wrong and have more money in my pocket!
Things are holding up well from what I understand as well. Who knows? I sure don’t.
The only part of you’re logic that escapes me is, “The Argies are Buying Punta, not selling.” As mentioned in the article, why would you put your money in an illiquid, volatile asset if you’re afraid of losing it? This does not seem like a valid response to a global economic crisis, at least not a conservative one.
But the Big Dogs to the South are s….o clever. Maybe?
April 18th, 2009 at 9:49 pm
Hi Steve,
I’m in Buenos Aires and am looking at condos. I’ve spoken with several brokers here and they believe that the market here is starting to slip. More sellers, few buyers. Prices here have been ramping up since 2002 when the Argies learned not to trust the banks and anybody with money could buy a flat here and get over 12% renting it out. One optimistic broker told me that I he believed that the prices in Recoleta and Palermo are now stable, no longer going up and that because this is mainly a cash market, there would be no forecloser sales stinking up the market. He also said that with rents still close to 10% at the 100-150k price range, the cash flow should sustain the price. BA is still one of the most beautiful cities in the world. The price for a condo is still a fraction of what one would cost in New York.
There is alot of fear in the air. Even candy shops have iron grills up. A 14 year old shot an killed a driver of the postal service while trying to steal his car. Clothing sales are off 15% from last year. Fewer dollars coming in from a drought reducing grain sales. Political uncertainty over upcoming elections.
An economist at a big wire transfer house thinks that prices in Argentina are headed for a big leg down. She told me to wait another year or so before buying in Argentina because prices here are still up 100% since the 2002 crisis. I only bring this up since Argentina is Uruguay’s big brother and what ever happens here will have an impact.
I hope to visit Uruguay over the next few days. If I’m lucky, I’ll make my way down the coast and perhaps we could meet.
Regards,
Robert Handen
April 19th, 2009 at 9:15 am
Robert-
Nice hearing from you.
You had frequent comments on Coastal Uruguay in the early days. Glad you found me here.
Pretty much stopped real estate articles on CY; all of the property stuff has moved here.
Thanks,