Saturday, August 28, 2010
Dear Reader,
On my first trip to Uruguay a few years back, I expected a foreign, exotic country...but felt surprisingly at home. The rolling landscape, soft sand beaches, and white-capped Atlantic seas reminded me of Ireland. The food was heavily Italian influenced, with supermarkets displaying fresh pasta in complex shapes and rainbow colors, alongside imported and locally-produced sausage, and smoked cheese. The café culture was French (heavy on delicious sugary, cream-filled pastries, strong coffee and even stronger cigarettes). Thanks to the good-quality infrastructure, Colonia's quaint Spanish and Portuguese colonial houses, and Montevideo's Parisian-style apartments, you'll think you're in Europe. Only the property prices here tell you that you're not...
The people are quiet, courteous, almost reserved initially, but warm and friendly once you get to know them, and passionate about their country. Mañana exists here, but only to stop frenzied foreigners pushing a 24/7 mentality on Uruguayans. They'll get the job done, but at their own pace--and it won't eat into precious time with family and friends. The country's safety record is enviable in the region, along with its low corruption rate. This is a country that's sticking with old-fashioned values and decency.
Uruguay does a very good job staying out of the spotlight. Other then the odd World Cup flourish, the country's reserved nature doesn't lend itself to public spectacle--and a lack of crime or natural disasters leaves media sources high and dry. It was Latin America's best-kept secret, overshadowed by neighboring giants Brazil and Argentina. It's hit the headlines more lately--but for all the right reasons.
The country's economy is strong, and forecast to grow 5% this year. The governor of the central bank feels confident that the country will return to investment grade in the next two years. Downgraded in 2002 following Argentina's economic and currency collapse (and debt default), Uruguay currently sits two levels below investment grade with both Standard & Poor and Fitch.
Tourist numbers continue growing. For the first half of this year, tourist numbers increased by 5.5% on 2009, and tourist spend increased 18.75% for the same period. It's worth noting that last year was a bumper year for tourists. Uruguay's success contrasts sharply with other traditional destinations, where tourist numbers are in decline. The country's now a study case for the World Tourism Organization. Interestingly, for the first time, more tourists chose the capital Montevideo over Punta del Este (Uruguay's upscale, glamorous beach resort).
Cruise ship arrivals form part of those tourist numbers. One cruise line, Royal Caribbean, plans 14 stops in Montevideo and 13 in Punta del Este in the upcoming cruise season. The company cautioned that the ports need to increase capacity to cope with today's super-cruise ships (with 5,400 passengers on board), which could mean even more cruise passengers in the future.
Those tourists clearly come here, like what they see, and decide they want a piece of the action. Real estate prices are kicking the trend in the same way tourist numbers are, rising steadily year on year. Of course, it helps that property prices here are such good value (even in posh Punta del Este and upscale Jose Ignacio, you can still bag a bargain).
Sales in Maldonado (Punta del Este is in this province) reached a total of 1.5 billion US dollars in the 18 months between January 1, 2009 and the first half of 2010. It makes Punta sound expensive...out of reach. That's not the whole story. Yes, an apartment sold in Punta last year for more than $7 million...but if you know where to look, you can still buy a property for $200,000 or less. In fact, an online search reveals 235 houses, and 386 apartments, in and around Punta, in the $60,000-$200,000 price range.
Further east, in Rocha, real estate developers are snapping up large tracts of land for land banking or future projects. Located between Punta del Este, and the border with Brazil (a major source of tourists for Uruguay), Rocha boasts Uruguay's nicest beaches, and cutest beach towns.
You can buy small beachfront lots here from $20,000. Rocha was overlooked...always in the shadow of the captivating attractions of Punta del Este. In the same way that Uruguay is finally emerging from the shadow of Brazil and Argentina, Rocha is emerging from the shadow of Punta. I'm just hoping it doesn't change too much...and that I manage to bag my own piece of beach here before prices start rising.
Margaret Summerfield
P.S. If you want to know more about property in Uruguay...including affordable historic homes in Montevideo...the affordable side of Punta del Este...and why savvy property shoppers are heading to Rocha...International Living's recent Uruguay e-webinar is now available as a video e-conference. Bring the experts on Uruguay into your living room...and get the lowdown on property bargains in this quiet country from the comfort of your armchair. Click here to order your copy.
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