Punta del Este Real Estate: A Safe Harbor in Times of Crisis

Safe Harbor: Calm waters and beautiful homes surround the Jose Ignacio lighthouse.

It happened three years ago during the market panic following the collapse of Lehman Brothers, and it’s happening again during the latest debt downgrade-inspired sell-offs. International investors fed up with uncertainty and triple-digit days on the Dow are plowing their cash into Punta del Este real estate. Just as in 2009, El Observador’s Leonardo Luzzi says Punta is once again a “refugio” for investors and developers alike.

As proof, Luzzi points to the fact that during recent months the number of construction permits requested in Punta del Este has increased. El Observador consulted with local analysts who confirm that prices along the coast are rising, although the median price per square foot around Punta is still a very reasonable US$112 per square foot. Going forward, locals are optimistic the current crisis centering on the U.S. and Europe will not adversely impact the local market.

The Director of Urban Planning for Maldonado confirms his office had received construction permit requests for 3.22 million square feet by June, and he forecasts 6.45 million by year-end 2011, a figure that would tie 2010′s record-setting number. Former Tourism Sub-secretary Alberto Prandi says investors look at Punta del Este as a safe harbor: “It happened in 2008 when everyone thought real estate prices would go down, but they did just the opposite. That shows the strength of the country.”

Finally, the editor of Propiedades magazine, Julio Villamide, says foreign investors are also beginning to look at markets beyond Punta del Este like Colonia, Montevideo and other destinations we featured this year in Discover Uruguay.  (Full Story in Spanish)