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Uruguay’s Hot Tourism Tandem: MVD & PDE

On August 24, 2010, In foreign investment, real estate, tourism, uruguay, by InvestBA
Montevideo Airport

First Impressions Are Lasting: Montevideo's ultra-modern airport is a wonderful gateway to Uruguay.

Back-to-back stories this week from MercoPress highlight the tourism attraction and real estate growth in Uruguay’s two leading destinations: Montevideo and Punta del Este. The statistics are encouraging, as they demonstrate some positive regional trends: more inbound visitors from countries besides Argentina, the long-standing number one for tourism exports to Uruguay, and a greater willingness among Uruguayans to explore other corners of the Southern Cone. In fact, Uruguayans posted triple-digit gains of citizens visiting Paraguay (+228% ) and Chile (+102%). Of those foreigners visiting Uruguay, the numbers reflect the economic status quo in key international markets: almost 25% more real-empowered Brazilians and 7% fewer visitors from the U.S. Montevideo’s cultural and urban Renaissance is finally being reflected in the tourism numbers, as more visitors made MVD their primary destination in the first six months of 2010 compared to Punta del Este. But don’t feel bad for PDE. Data released last week by the country’s Tourism Office shows $1.5 billion USD in real estate transactions taking place in the popular beachside destination over the past 18 months alone. The government estimates approximately 18.2 million square feet of new residential construction has been built in the last five years and—given current absorption rates—it’s not surprising the Mujica government is encouraging more foreign investment.

For more information on Uruguay’s quality of life and cost of living, visit our archives and download the new edition of InvestBA Privada.

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Uruguay Embraces Pro-Construction Policies

On July 30, 2010, In foreign investment, real estate, tourism, uruguay, by InvestBA
Mujica Astori

President Mujica and VP Astori want to encourage more foreign developers to launch projects in Uruguay.

After the U.S.’s $787 billion Grow Government package which Harvard essentially labeled a failure, it’s refreshing to hear about a stimulus package that could actually create jobs, promote development and provide some much needed housing. Montevideo’s LR21 reports today on the Uruguay government’s decision to promote a series of fiscal stimulus measures to incentivize private investment in the construction of new homes and condominiums. The President and Vice President of the Republic, José Mujica y Danilo Astori, made the announcement yesterday at a luncheon hosted by the APPCU, the Association of Private Developers in Uruguay. While some members of the U.S. Congress seem completely out of touch with the private sector, President Mujica said he values interaction with groups like APPCU to better understand the needs and challenges facing leaders in the country’s most important job creating sectors. Vice President Astori also acknowledged the critical role national and foreign developers will play in realizing one of the priorities of the Mujica administration, “promoting tourism-related real estate development which provides tremendous revenue and job creation for Uruguay.” And while national builders still account for he bulk of the new construction, Astori officially rolled out the light blue carpet for foreign developers. “These incentives are as much for national investors as they are for foreign groups who can collaborate with the public sector in developing new projects,” Astori said adding, “National investors dominate housing construction, while in the real estate tourism sector, we are hoping for more foreign investment.” (Full Story in Spanish)

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Estabilidad: BA Construction Activity Rises 10%

On July 20, 2010, In foreign investment, real estate, by InvestBA
BA Construction

Who needs a boom? "Estabilidad" suits builders and buyers in the Buenos Aires real estate market just fine.

Recent headlines regarding Buenos Aires real estate sales activity have been improving steadily this year, and La Nación says builders are starting to feel equally optimistic. During the first five months of 2010, the construction industry posted a 10% increase in new projects under development, while the sale of condominiums and single-family homes advanced 7.1%, according to the Universidad Argentina de la Empresa (UADE). The UADE’s prestigious Economics Institute compiled the data and forecast “stability” across-the-board for real estate sales, median prices and inventory of rental units. The analysis of all construction segments found the largest January-May increases in three sectors: oil and gas construction (+41%), road construction (+10.4%), and housing construction (+9%). The UADE study offers a detailed analysis of the local real estate market where new housing inventory grew 7.1% in Capital Federal and Greater Buenos Aires. The rise in inventory was accompanied by an increase in median prices, especially in the Northern Corridor of Buenos Aires, where new condominium prices gained 9.7% in U.S. dollars compared to the same five-month period in 2009. Median prices of existing inventory in BA posted a 9.3% gain. The greatest increase took place in the Recoleta neighborhood where the average price per square meter for new construction units rose 11.2%. Other BA barrios popular with foreign buyers posted more modest annual price increases including Palermo (+1.5%), Belgrano (+1.2%) and Núñez (+1.2%).  For more information about Buenos Aires real estate opportunities, search our archives and download the July 2010 issue of InvestBA Privada. (Full Story in Spanish).

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Maldonado Construction Reaches New Heights

On July 6, 2010, In foreign investment, real estate, uruguay, by InvestBA
New Construction in Maldonado

Local officials anticipate another record year of residential construction in Maldonado, Uruguay

The Uruguayan coastal state of Maldonado—home to popular beach side destinations like Punta del Este and José Ignacio—is poised for another record year of new residential development, according to state development and tourism officials. In an interview with El País, the Director of City Tourism for Maldonado Horacio Díaz says in January and February, developers submitted approval requests for 170,000 m² of new residential construction. At the current rate, Maldonado forecasts 400,000 m² of new projects will be submitted for approval by year-end 2010. If that forecast is valid, the increase in new construction requests would exceed 2009 by 14.2%. In 2009, developers submitted approval request for 350,000 m² of new construction, of which Maldonado approved 290,000 m² or 83%. Contrary to popular belief, most of the new construction requests in 2009 were for single-family homes (63%) vs. multi-unit dwellings (37%), of which only 10-12% were high-rise condominiums. In the same article, El País points to the report we shared last month regarding the dynamic nature of the Maldonado real estate market vis-a-vis Buenos Aires. Over a recent 12-month period, the ratio of total area: $ sales was almost identical for both Buenos Aires (200,000 km² : US$4.26MM ) and Punta del Este (20,000 km² : US$437MM). For more information about Maldonado real estate opportunities, visit our archives our download the July 2010 edition of InvestBA Privada.

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Mar del Penthouse: Coastal Real Estate Boom

On May 26, 2010, In foreign investment, real estate, tourism, by InvestBA
Maral Pool

View from the pool deck of Maral 52, one of the luxury towers under construction in Mar del Plata.

Yesterday was an historic day here in Buenos Aires. Millions took to the streets to celebrate the 200th anniversary of the Revolution for independence from Spain. Further down the coast in Mar del Plata, festivities were equally raucous; yet, it’s another “200″ that’s generating headlines.  That’s the number of new buildings currently under construction in this seaside metropolis of 550,000 residents, according to Editorial NyP. That ratio of new construction to population may sound out of whack until you consider the population of “Mardel” more than doubles several times during the course of the year as visitors, many from Buenos Aires, pack the local beaches. While the numbers are impressive, the housing boom enthusiasm is tempered by NyP with a closer look at real estate values which are now on par with BA neighborhoods like Palermo and Caballito. Inland real estate values in Mardel are roughly $2,000/m² ($185/SF), while coastal values range from $2,700-4,000/m² ($250-370/SF). General consensus by those interviewed is that prices are inflated and local demand, especially from middle class Argentines who rely on bank financing, may not be adequate to absorb future inventory levels. Some Mardel projects completed during the past two years are still not 100% sold, which may give pause to developers of an additional 200 buildings currently approved. While foreign buyers may choose to steer clear of Mardel condos, the region should not be overlooked entirely. Beautiful beach cottages and country homes in secluded forests are scattered around Mardel and offer excellent value for investors. (Full Story in Spanish)

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