Average real estate prices in Punta del Este have fallen for the third consecutive year, and local real estate offices are closing as more owners turn to non-traditional channels for renting their coastal properties.
The tenth annual survey of new construction prices in Punta del Este shows average prices are down 7.6% compared to last year for residential towers and projects located along the coast from Punta Ballena east to the peninsula and north to the Arroyo Maldonado. Average condominium prices in Punta del Este are now back to the level of 2011, the year when Argentina’s USD currency controls went into effect.
“Last year the decline in real estate prices in dollars was 7.61% to US$3,732 per square meter (US$346 per square foot)…despite the fact that construction costs as well as direct and indirect costs associated with these projects continue to rise,” writes El Pais’ Marcelo Gallardo.
“The report indicates that this time last year there were 78 residential projects under construction with units for sale, and currently that number is down to 48 projects. That sharp drop in the number of projects is due to the fact that new developments are not coming online. In fact 12 buildings were launched in the last two years with signage and sales centers only to be cancelled because of poor sales,” writes Gallardo.
The lower average price news comes on the heels of the revelation that 55 real estate offices have closed in and around Punta del Este over the past eighteen months. A recent survey by the Chamber of Tourism found that 85% of Punta del Este property owners are now renting their units through “informal channels” in order to lower costs and avoid paying real estate commissions and taxes like the IRPF.
The president of the Chamber of Tourism says the traditional market for renting Punta properties through brokers has almost disappeared. More owners are opting for sites like Airbnb which give owners the freedom to deal directly with potential renters. A quick search shows several hundred Punta del Este properties on Airbnb priced from under US$100 to over $2,000 per night. (Full Story in Spanish)
For more information about Argentina and Uruguay real estate investments, complete the form below.