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Property prices in Montevideo are expected to continue their moderate upward trajectory in 2026, driven by steady GDP growth, sustained foreign investment, and limited housing supply relative to demand.
The Montevideo property market has shown remarkable resilience over the past decade, with annual price increases typically ranging between 0.9% and 9.7%, and current forecasts suggest a 3-5% annual appreciation for 2025-2026. With average apartment prices ranging from $2,420 to $3,500 per square meter as of September 2025, and premium neighborhoods like Carrasco and Pocitos commanding up to $4,260 per square meter, the capital continues to attract both local and international buyers seeking stable returns in one of South America's most politically and economically stable markets.
If you want to go deeper, you can check our pack of documents related to the real estate market in Uruguay, based on reliable facts and data, not opinions or rumors.
Montevideo property prices are projected to increase by 3-5% annually through 2026, supported by steady economic fundamentals and continued foreign investment.
The market shows strong fundamentals with rental yields averaging 4.97%, moderate new construction supply, and growing international demand particularly from Argentine and Brazilian buyers.
| Market Indicator | Current Status (2025) | 2026 Projection |
|---|---|---|
| Average Property Price per sqm | $2,420-$3,500 | $2,490-$3,675 (+3-5%) |
| GDP Growth Rate | 2.3-3.4% | 2.2-2.5% |
| Inflation Rate | 4.5-5.5% | 4.8-5.3% |
| Average Rental Yield | 4.97% | 4.5-5.2% |
| Foreign Investment Growth | 7% annually | 6-8% annually |
| Population Growth | 1,788,000 | 1,795,000 (+0.39%) |
| New Housing Units Built | ~3,000 units | ~3,200 units |
What's the current average price per square meter for apartments and houses in Montevideo?
As of September 2025, the average property price in Montevideo ranges from $2,420 to $3,500 per square meter citywide.
Premium neighborhoods command significantly higher prices, with Carrasco, Pocitos, and Punta Carretas reaching up to $4,260 per square meter. These upscale areas attract both affluent locals and foreign buyers seeking luxury properties with ocean views and top-tier amenities.
On the opposite end of the spectrum, central and more affordable neighborhoods can see prices dip to around $750 per square meter, making them accessible entry points for first-time buyers or investors seeking higher rental yields. These areas often include older buildings that may require renovation but offer excellent potential for value appreciation.
The price variation across different neighborhoods reflects Montevideo's diverse real estate landscape, where buyers can find options ranging from budget-friendly apartments to luxury waterfront properties. This wide price range makes the city attractive to investors with varying budgets and investment strategies.
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How have property prices in Montevideo changed year by year over the past 10 years?
Montevideo property prices have shown steady, moderate appreciation over the past decade, with annual increases typically ranging between 0.9% and 9.7%.
The period from 2019 to 2024 saw the highest growth rates, with 2021 being particularly strong as a post-pandemic recovery year. This surge reflected increased demand from both local buyers seeking larger homes and foreign investors taking advantage of Uruguay's stable political and economic environment.
Recent performance shows more moderate but consistent growth, with 2023 recording a 0.91% increase and 2024 achieving 2.9% appreciation. The 2025 forecast suggests continued momentum with projected annual increases of 3-5%, indicating a healthy and sustainable market trajectory.
This consistent upward trend demonstrates the resilience of Montevideo's property market compared to more volatile regional markets. The steady appreciation has provided reliable returns for long-term investors while avoiding the boom-bust cycles that have affected other South American capitals.
The market's stability stems from Uruguay's strong institutions, favorable business climate, and growing appeal as a regional financial center attracting international investment and expatriate residents.
What's the projected GDP growth and inflation rate for Uruguay in 2026?
Uruguay's GDP is projected to grow by 2.2-2.5% in 2026, following an estimated 2.3-3.4% growth in 2025 according to World Bank, IMF, and Trading Economics forecasts.
The inflation rate is expected to range between 4.8-5.3% in 2026, showing a projected downward trend from the 2025 rate of 4.5-5.5%. This gradual decline in inflation suggests improving price stability, which typically supports real estate investment confidence.
These economic projections indicate a stable macroeconomic environment that generally favors property market growth. Moderate GDP expansion provides the foundation for employment growth and wage increases, supporting housing demand from local buyers.
The controlled inflation rate, while still above developed country levels, remains manageable and shouldn't significantly erode purchasing power or deter foreign investment. Uruguay's Central Bank has demonstrated effective monetary policy management, contributing to economic predictability.
This economic stability makes Uruguay an attractive destination for regional investors seeking to preserve capital value, particularly those from neighboring countries experiencing higher inflation rates or political uncertainty.
How do mortgage interest rates in Uruguay compare today versus five years ago?
Mortgage interest rates in Uruguay are currently higher than they were five years ago, with 2025 rates ranging from 6-10% compared to 4.5-7% in 2020.
| Year | Central Bank Policy Rate | Mortgage Rate Range |
|---|---|---|
| 2020 | 4.5% | 4.5% - 7.0% |
| 2021 | 5.0% | 5.0% - 7.5% |
| 2022 | 7.0% | 5.5% - 8.0% |
| 2023 | 8.5% | 6.0% - 9.0% |
| 2024 | 9.0% | 6.0% - 9.5% |
| 2025 | 9.0% - 9.25% | 6.0% - 10.0% |
The Central Bank's policy rate has increased from around 4.5% in 2020 to 9.0-9.25% in 2025, reflecting global monetary tightening trends and domestic inflation management. This rate increase directly impacts mortgage costs, making financing more expensive for buyers who rely on bank loans.
However, the Montevideo property market has shown resilience despite higher borrowing costs, partly due to the significant proportion of cash buyers, particularly among foreign investors. Many international buyers, especially from Argentina and Brazil, prefer cash transactions to avoid currency exposure and financing complications.
The higher interest rate environment has shifted market dynamics toward investors with stronger financial positions while potentially creating opportunities for cash buyers to negotiate better prices with sellers who face a smaller pool of financed buyers.
What's the current rental yield in Montevideo, and how has it trended in the last decade?
The current average rental yield in Montevideo stands at 4.97% gross as of the second quarter of 2025, down from 5.37% in Q2 2024.
Rental yields vary significantly by neighborhood and property type, with studios and one-bedroom units in areas like Malvin, Punta Carretas, and Pocitos often exceeding 6%, while larger family units typically yield 4-5%. This variation allows investors to target specific return profiles based on their investment strategy.
Over the past decade, rental yields have remained relatively robust, typically ranging between 4.5-6%. This consistency demonstrates the strength of Montevideo's rental market, supported by steady demand from both local tenants and international residents working in the city's growing financial and technology sectors.
The rental market benefits from Uruguay's favorable tenant-landlord regulations and the country's appeal to digital nomads and expatriate workers. Short-term rental markets, particularly in tourist-friendly neighborhoods, can achieve even higher yields during peak seasons.
These yield levels compare favorably to many developed markets and provide attractive returns for buy-to-let investors, especially when combined with potential capital appreciation and the stability of the Uruguayan peso relative to regional currencies.
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How many new housing units are being built per year in Montevideo compared to the number of buyers?
Montevideo typically accounts for approximately 3,000 new housing units annually, representing about 65-67% of Uruguay's total construction of 4,700 units built nationwide in 2023.
The supply of new housing is concentrated in neighborhoods like Cordón, Tres Cruces, and Centro, where developers focus on mixed-use projects that combine residential units with commercial spaces. These areas benefit from existing infrastructure and proximity to business districts.
In contrast, buyer activity remains robust with approximately 17,500 property transactions occurring in Montevideo out of 50,556 nationwide purchases in 2023. This creates a ratio of roughly 5.8 transactions for every new unit built, indicating strong absorption of both new and existing inventory.
The construction rate suggests that while new supply is being added to the market, it's not overwhelming demand. This balance helps maintain price stability while providing enough new inventory to meet growing demand from both local buyers and foreign investors.
It's something we develop in our Uruguay property pack.
What is the population growth forecast for Montevideo through 2026, and how does it compare to housing supply?
Montevideo's population is projected to grow from 1,788,000 in 2025 to 1,795,000 in 2026, representing a modest annual increase of 0.39%.
This relatively slow population growth rate suggests that housing demand is being driven more by changing household formation patterns, income growth, and foreign investment rather than pure demographic expansion. The modest population increase helps maintain market balance without creating excessive pressure on housing supply.
Housing supply growth currently outpaces population growth thanks to sustained building programs and urban development initiatives. However, migration patterns and foreign demand continue to drive absorption, particularly in desirable neighborhoods near the coast and city center.
The combination of limited population growth and controlled new construction creates a stable market environment where supply and demand remain relatively balanced. This equilibrium supports steady price appreciation without the risk of oversupply that could lead to price corrections.
Foreign residents and investors add an additional layer of demand that isn't captured in basic population statistics, as many maintain properties for seasonal use or investment purposes rather than permanent residence.
How many foreign buyers have entered the Montevideo property market in recent years, and what share of total purchases do they represent?
Foreign direct investment in Montevideo real estate has been growing at approximately 7% annually and is projected to continue through 2026.
Foreign buyers, primarily from Argentina and Brazil, comprise a significant share of the luxury and coastal property segments, with estimates suggesting they represent 30-66% of purchases in some high-end areas. This substantial foreign presence reflects Uruguay's appeal as a safe haven for regional wealth.
The composition of foreign buyers is heavily weighted toward Argentines (approximately 75%) and Brazilians (around 20%), with the remainder coming from other South American countries and North America. These buyers are attracted by Uruguay's political stability, favorable tax policies, and high quality of life.
Foreign investment concentrates in premium neighborhoods like Carrasco, Pocitos, and Punta del Este (for vacation properties), where international buyers seek luxury amenities, ocean access, and proximity to international schools and business centers.
This foreign demand provides crucial market support and helps explain why Montevideo property prices have remained resilient despite regional economic challenges. International buyers often have stronger financial positions and are less sensitive to local financing conditions.
What is the current average household income in Montevideo, and how has it kept pace with property price increases?
The average household income in Montevideo stands at 112,701 UYU per month (approximately $2,612) as of 2025, with the median household income at around 82,939 UYU per month (approximately $2,165).
Property prices have appreciated moderately faster than household income growth over the past decade, creating some affordability challenges for middle-income buyers but not severely depressing overall demand. This trend is common in many emerging market capitals experiencing economic development and foreign investment.
The income-to-property price ratio indicates that while homeownership may require longer saving periods or higher debt-to-income ratios than in previous years, the market remains accessible to employed professionals, particularly those in growing sectors like technology, finance, and services.
Many local buyers are adapting by purchasing smaller units, choosing neighborhoods farther from premium areas, or entering the market as investors rather than owner-occupiers. The rental market provides an alternative that allows residents to live in desirable areas while building savings for future purchases.
Foreign buyers with stronger currency positions help support the higher end of the market, while local buyers tend to focus on more affordable segments, creating natural market segmentation that maintains activity across different price points.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Uruguay versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What percentage of properties sell above listing price, and how long do homes stay on the market on average?
While specific data for Montevideo in 2025 is limited, typically less than 10% of properties sell above asking price, with this phenomenon mostly occurring in highly desirable coastal neighborhoods and premium locations.
Properties that sell above listing price are generally "turnkey" units in excellent condition, coastal properties with ocean views, or well-located central apartments that attract multiple offers from competing buyers. These premium properties benefit from strong demand from both local and foreign buyers.
The average time on market varies significantly by property type and condition, with high-quality properties in desirable locations typically selling within 25-45 days. Properties in less central locations or those requiring significant renovation may take considerably longer to find buyers.
The Montevideo market remains relatively liquid compared to many regional markets, with well-priced properties in good condition finding buyers within reasonable timeframes. This liquidity is supported by the presence of both local and international buyers actively searching for investment opportunities.
Luxury properties and oversupplied segments may experience longer marketing periods, particularly if they're priced above market levels or located in areas with limited buyer demand. Sellers who price realistically based on recent comparable sales typically achieve faster transactions.
What are the historical price differences between central neighborhoods and outer districts, and how have these gaps evolved?
Central neighborhoods like Pocitos, Carrasco, and Ciudad Vieja command premiums of 30-80% higher than peripheral districts, reflecting their superior location, amenities, and infrastructure.
| Neighborhood Type | Average Price per sqm | Premium vs. Peripheral |
|---|---|---|
| Premium Central (Carrasco, Pocitos) | $3,500 - $4,260 | +65-80% |
| Mid-tier Central (Ciudad Vieja, Centro) | $2,800 - $3,200 | +40-55% |
| Established Residential | $2,200 - $2,800 | +20-35% |
| Emerging Areas | $1,500 - $2,200 | +5-20% |
| Peripheral Districts | $750 - $1,500 | Baseline |
This price gap has been widening slightly due to foreign investment and migration patterns that concentrate demand in central, well-connected neighborhoods. International buyers particularly favor areas with established infrastructure, proximity to international schools, and easy access to business districts.
Gentrification processes in revitalized core areas have accelerated price appreciation, with neighborhoods like Ciudad Vieja experiencing renaissance as cultural and residential hubs. These areas benefit from both public investment in infrastructure and private development of restaurants, cultural venues, and mixed-use projects.
The widening gap creates opportunities for investors willing to target emerging neighborhoods that may benefit from future development or infrastructure improvements, though such investments carry higher risk and longer time horizons for appreciation.
It's something we develop in our Uruguay property pack.
How did previous global or regional economic downturns affect property prices in Montevideo, and what's the likelihood of similar shocks in 2026?
The COVID-19 pandemic in 2020 caused a temporary price dip in Montevideo, but the market showed quick recovery with 2021 experiencing double-digit price increases as pent-up demand was released.
Montevideo has demonstrated remarkable resilience compared to regional peers during economic downturns, largely due to Uruguay's economic and political stability, diversified economy, and strong institutional framework. The country's banking system and regulatory environment provide buffers against external shocks.
Historical performance shows that Montevideo experienced less volatility than many other South American capitals during previous regional crises. The market benefits from its appeal to flight-to-quality capital from neighboring countries during periods of regional uncertainty.
The risk of major external shocks in 2026 appears moderate based on current economic indicators. While slower GDP growth and manageable inflation are expected, the fundamentals remain sound with no evident "bubble" characteristics in the property market.
Potential risks include global recession, significant regional political or economic crisis, or major changes in international investment flows. However, Uruguay's track record suggests the market would likely experience temporary corrections rather than sustained collapse, making it attractive for long-term investors seeking stability.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Property prices in Montevideo are positioned for continued moderate growth in 2026, supported by stable economic fundamentals, sustained foreign investment, and balanced supply-demand dynamics.
The market offers attractive opportunities for both investors seeking rental yields averaging 4.97% and buyers looking for capital appreciation in one of South America's most stable real estate markets.
Sources
- The Latin Investor - Montevideo Property
- Aparthotel - Uruguay Analysis
- The Latin Investor - Montevideo Price Forecasts
- The Latin Investor - Average House Price in Uruguay
- The Latin Investor - Uruguay Price Forecasts
- Global Property Guide - Uruguay Price History
- Trading Economics - Uruguay GDP Growth
- Latam FDI - Uruguayan Growth Rate
- Trading Economics - Uruguay Inflation
- Global Property Guide - Uruguay Rental Yields