Uruguay’s housing market peaked around 2010, Ms. Sofio said, and then softened over the next few years, in large part because of economic and political tumult in neighboring Argentina and Brazil.
There are signs, however, that the market is now on an upswing.
After a surge in sales from 2003 to 2011, “Montevideo’s market is in a recession,” because of a slowdown in the economy and higher property prices, Mr. García Arocena said. The number of transactions was down 10 percent in 2016 compared with a year earlier, and down almost 40 percent from 2014, he estimated.
Uruguay’s real estate market reached a peak in 2011, and has largely deflated since then, causing prices in the beach areas to drop for all but the top tier of properties, said Carlos García Arocena, executive director of Bado & Perazzo Sotheby’s International Realty, which is based in Montevideo but has listings in the Punta del Este region. The overall market dropped by about 25 percent, but homes priced at $3 million or more have been unaffected, he said.
Farmland in South America: Large corporates rule the roost
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“Uruguay’s economy is expected to grow 3 percent in 2014, and a similar rate in 2015,” said Juan Federico Fischer, the managing partner of the law firm Fischer and Schickendantz in Montevideo. This represents a slowdown from the average 6 percent growth rate the country enjoyed from 2003 to 2013. Mr. Fischer said the slower economy can be attributed to a slump in commodity prices; Uruguay’s economy relies heavily on agricultural exports such as beef, soybeans and dairy products.
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