Montevideo real estate prices peaked in the second half of 2013 and have fallen significantly in non-coastal neighborhoods this year, according to a new survey of average prices.
Since the 2013 peak, the average price of residential real estate in Montevideo has fallen 11% to US$1,542 per square meter (US$143 per square foot) according to the Valora analysis which lumps twenty Montevideo neighborhoods into three different geographic zones.
Average real estate prices in Zone 1, the coastal region which includes Montevideo’s most expensive neighborhoods including Carrasco, Malvin, Pocitos and Punta Carretas, proved their resilience and posted the smallest decrease. With an average of US$2,304 per square meter (US$214 per square foot), Zone 1 real estate prices are on par with the second half of 2012, according to El Pais’ Miguel Noguez.
Average real estate prices posted the biggest decline in Zone 2, the region encompassing downtown Montevideo, the Ciudad Vieja and the Port of Montevideo. Average real estate prices in Zone 2 fell 33% compared to the second half of 2012. The average price of US$1,008 per square meter (US$94) is the lowest of the city’s three zones.
Finally, average real estate prices in Zone 3 of Montevideo fell 20% from US$1,437 per square meter in the second half of 2012 to the current level of US$1,198 per m2. Zone 3 is made up of severn Montevideo barrios including the Prado, Parque Batlle, Reducto and Tres Cruces neighborhoods.
The primary culprit for the double-digit declines in Zones 2 and 3 is the wave of new affordable housing residential construction following passage of social housing promotion legislation in 2013. The majority of those new buildings are being built in more affordable, non-coastal barrios like Cordon, La Aguada and Tres Cruces. (Full Story in Spanish)
For more information about South America real estate investments, complete the form below.