different agents of property market agree that the price of the units will increase in the around 10% in the remainder of 2023. This increase in the value of real estate in the local market will occur in a “staggered” manner over the coming months.
Inflation, the dollar price and the salary round —which is close to being negotiated after the last agreement expired on March 31— are the three axes on which the actors support this projection in terms of the values of real estate purchases in Uruguay.
“During 2022, the Uruguayan real estate market managed to establish itself and experience a higher level of stability that attracted the interest not only of locals but also of foreigners”, particularly Argentines and Chileans, explained the latest report from the real estate portal Infocasas.
“Despite the fall in the dollar, the increase in the cost of raw materials and the increase in the value of construction, property prices remained stable and did not make the available supply of new construction more expensive, with a stock of units that benefited the buyer over developments,” the report added.
For 2023, a 12% adjustment in the prices of the units is expected, which will take place in a “staged manner”. in the course of the following 12 months, although it will be in the last quarter when a greater increase is noted, the report detailed. “This is mainly due to the increase in the prices of materials and construction costs, as well as a possible depreciation in the value of the dollar,” he deepened.
“The sales prices of the units will rise in line with annual inflation, and it is estimated that it will be about 10%”, indicated, for his part, the CEO of the real estate consultancy Moebius, Gonzalo Martínez, to Coffee & Business.
“The adjustment is also due to the value of the dollar, which is low and does not pay off for builders since the cost of materials and labor is in Uruguayan pesos,” said Martínez.
According to the director of Campiglia Construcciones, Germán Campiglia, in 2023 the cost of construction will increase, because “the dollar continues to be pressed and inflation continues its rhythm” (was 7.33% in the year ended March).
“The (real estate) market in Uruguay is dollarized and the prices that are willing to pay remain stable in dollars, this generates a difficulty for developers, which can slow down the completion of some projects or delay them“added the businessman.
The current situation of the dollar “is worrying for real estate developers,” Campiglia said in dialogue with Coffee & Business.
On the other hand, “it is probable” that an increase in costs will be generated based on the round of salary negotiations, he said.
The behavior of rentals
According to Martinez, rents will also rise over the next few months, although it is expected to be “below inflation.”
About the rental rates of returnMartínez maintained that, although “each of the properties must be analyzed, it is maintained in most cases the ratio of 6% annual return”.
On the other hand, Campigla maintained that this rate depends on several factors, such as the neighborhoods in which the dwelling is located and the typology, although he expressed that this value will be around 5%. “It is likely that rents will remain stable and will not tend to increase,” due to the supply of units on the market, he concluded.
