Authored by the expert who managed and guided the team behind the Uruguay Property Pack
Yes, the analysis of Montevideo's property market is included in our pack
Montevideo's real estate market is experiencing steady growth with 2-4% annual price appreciation expected through 2026.
The city offers attractive rental yields of 5-6.5% in key neighborhoods, stable government policies supporting foreign investment, and strong demand across residential segments from affordable apartments to luxury coastal properties.
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.
As of September 2025, Montevideo's property market shows solid fundamentals with residential prices averaging $2,420-$3,500/m² citywide and premium neighborhoods reaching $4,000-$4,260/m².
The market benefits from Uruguay's political stability, foreign-friendly policies, and ongoing infrastructure investments that support long-term growth prospects.
| Market Aspect | Current Status | 2025-2026 Outlook |
|---|---|---|
| Average Price/m² | $2,420-$3,500 | 2-4% annual growth |
| Rental Yields | 5-6.5% gross | Stable, strong demand |
| Foreign Investment | Unrestricted ownership | 7% annual FDI growth expected |
| Best Neighborhoods | Carrasco, Punta Carretas, Malvín | Continued premium growth |
| Supply Pipeline | 185 promoted projects (2023) | Balanced supply-demand |
| Government Support | Tax exemptions, pro-investor policies | Extended incentives |
| Long-term Prospects | 3-5% annual appreciation | Infrastructure-driven growth |
What are the current price trends for residential and commercial properties in Montevideo?
Montevideo's residential market shows steady growth with citywide average prices ranging from $2,420 to $3,500 per square meter as of September 2025.
Premium neighborhoods like Carrasco and Punta Carretas command significantly higher prices between $4,000 and $4,260 per square meter, while more affordable areas like Las Acacias offer opportunities at $750 to $875 per square meter.
The residential market experienced a 2.9% overall price increase over the past 12 months, with properties featuring desirable amenities such as outdoor spaces and energy efficiency seeing stronger growth of 4-10%. This reflects buyers' growing preference for quality and sustainability features.
Commercial real estate is benefiting from a construction boom, particularly in mixed-use developments where ground floor commercial spaces are increasingly popular in revitalized central neighborhoods.
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How have property prices changed over the past year, and what's expected in the next 6 to 12 months?
The past year brought significant price movements in Montevideo's property market, with median sale prices for two-bedroom apartments rising 10.6% year-on-year.
Newly built homes specifically appreciated 4.43%, indicating strong demand for modern properties. The supply side responded robustly, with 75% more two-bedroom listings appearing in late 2024, suggesting the market is finding better balance between supply and demand.
For the next 6 to 12 months, forecasts predict steady appreciation of 2-4% for most areas across Montevideo. Luxury properties, coastal neighborhoods, and newly gentrifying areas are expected to see higher appreciation rates.
This moderate growth trajectory reflects Uruguay's stable economic fundamentals and continued foreign investment interest, while the increased supply helps prevent overheating in the market.
What is the medium-term outlook for the next 2 to 3 years, and what indicators support that?
The medium-term outlook for Montevideo real estate remains positive, with forecasts indicating 3-5% annual price appreciation over the next 2-3 years.
This growth projection is supported by several key economic indicators, including stable GDP growth around 3.4% annually, controlled inflation rates, and ongoing infrastructure investments that enhance property values across the city.
Demographic trends also support this outlook, with continued urbanization drawing people to Montevideo and increasing demand for housing. The government's pro-investor stance, including extended tax incentives under the Promoted Housing Law, creates a favorable environment for sustained growth.
Foreign direct investment is expected to rise 7% per year by 2026, bringing additional capital into the real estate sector and supporting both residential and commercial development projects.
What are the long-term prospects for the Montevideo real estate market over the next 5 to 10 years?
Montevideo's long-term real estate prospects appear strong, with expectations of 3-5% annual appreciation sustained over the next 5-10 years.
Several structural factors support this optimistic outlook, including ongoing infrastructure projects focused on transport improvements and sustainability initiatives that will enhance property values citywide.
Uruguay's political and economic stability provides a reliable foundation for long-term investment, while the country's favorable geographic position and growing reputation as a regional business hub attract continued foreign investment.
ESG (Environmental, Social, and Governance) incentives are driving demand for sustainable developments, creating premium opportunities for green-certified buildings and energy-efficient properties that align with global investment trends.
The continued urbanization of Uruguay, combined with Montevideo's role as the economic center, ensures steady population growth and housing demand that supports long-term market stability.
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Which neighborhoods are currently growing fastest in terms of property values and demand?
Centro and Ciudad Vieja are experiencing the fastest appreciation rates due to ongoing urban renewal projects and gentrification efforts that are transforming these historic areas.
| Neighborhood | Growth Type | Key Drivers |
|---|---|---|
| Centro | Urban renewal | Transport hub, gentrification, infrastructure |
| Ciudad Vieja | Historic revitalization | Cultural projects, tourism, heritage preservation |
| Malvín | Balanced growth | Student demand, professionals, good connectivity |
| Parque Rodó | Lifestyle demand | Green spaces, cultural attractions, central location |
| Carrasco | Luxury expansion | Business proximity, cultural regeneration, exclusivity |
| Punta Carretas | Premium coastal | Shopping hub, dining, waterfront lifestyle |
How do property prices and rental yields compare between central areas, coastal zones, and suburban districts?
Coastal zones command the highest property prices but offer moderate rental yields, while central areas provide the best balance of appreciation potential and rental returns.
Carrasco, the premium coastal neighborhood, reaches over $4,260 per square meter with gross yields around 5%, attracting luxury buyers and expatriates. Punta Carretas offers similar coastal lifestyle at $3,500-$4,000 per square meter with yields of 5-6.7%.
Central neighborhoods like Malvín ($2,950-$3,250/m²) and Cordón provide the highest gross yields at 5.8-6.7%, driven by strong rental demand from students and professionals. Centro averages $2,800/m² with yields of 5-5.9%, benefiting from urban renewal investments.
Suburban areas offer the most affordable entry points at $750-$1,200 per square meter with yields around 5.3%, appealing to families seeking space and green environments while maintaining reasonable returns.
Pocitos represents the premium coastal option at approximately $3,500/m² with 5% yields, offering cosmopolitan amenities and beachside living that attracts both residents and investors.
What types of properties—apartments, houses, luxury, or affordable units—are performing best right now?
Luxury properties in Carrasco and Punta Carretas are showing the strongest performance, with penthouses and family homes appreciating 5-7% annually and attracting significant foreign demand.
Eco-friendly and newly built properties command premium prices, particularly those with LEED or green certifications that align with growing environmental consciousness among buyers.
Affordable urban properties, especially studios and one-bedroom apartments in Centro, Ciudad Vieja, and Cordón, offer excellent rental yields and appreciation potential as these areas undergo revitalization.
Family homes with gardens in suburban areas are gaining popularity as families seek more space, though supply has been catching up to demand throughout 2024-2025, creating more balanced market conditions.
Modern two and three-bedroom apartments in well-connected neighborhoods like Malvín and Parque Rodó continue to attract both owner-occupiers and investors due to their versatility and strong rental demand.
How do short-term rental opportunities compare to long-term rental investments in Montevideo?
Short-term rentals through platforms like Airbnb can generate 20-40% higher gross rental income compared to traditional long-term leases, particularly in prime locations.
1. **Peak Season Performance**: December through March sees occupancy rates exceeding 80% in popular areas2. **Prime Locations**: Ciudad Vieja, Pocitos, and coastal zones perform best for short-term rentals3. **Regulatory Considerations**: Building rules vary significantly, making it essential to verify short-term rental permissions before purchase4. **Management Requirements**: Higher income potential comes with increased management complexity and seasonal fluctuations5. **Long-term Stability**: Traditional rentals offer consistent 4-6% gross yields with stable tenant pools including students, expatriates, and professionals
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 budget ranges are most attractive for buyers today, depending on whether the goal is living, renting out, or reselling?
Budget requirements vary significantly based on intended use, with entry-level investments starting around $80,000 and luxury properties exceeding $300,000.
| Budget Range | Suitable Uses | Neighborhoods/Property Types |
|---|---|---|
| $80,000 | Studio/1-bed for living or rental | Cordón, Centro - compact units |
| $160,000 | 2-bed living, 1-bed investment | Centro, Malvín, Pocitos - versatile options |
| $250,000 | 3-bed modern, luxury rental | Carrasco, Punta Carretas - premium markets |
| $300,000+ | Premium estate, high-end resale | Carrasco, Punta Carretas - luxury segment |
| $100,000-$180,000 | Student rental investment | Cordón, Centro - high-yield properties |
What government policies, taxes, or regulations are currently shaping the real estate market in Montevideo?
The Promoted Housing Law provides significant tax advantages, offering complete exemptions from income and property transfer taxes for qualifying real estate investments.
Foreign ownership regulations remain highly favorable, with unrestricted property ownership rights identical to those of Uruguayan citizens, creating an attractive environment for international investors.
Property taxes are notably low at just 0.25-0.5% of assessed value, while total transaction costs typically range from 7-10% of the purchase price, which is competitive regionally.
The government actively encourages mixed-use developments that combine commercial and residential units, supporting urban density and economic activity through targeted incentives.
Rental market regulations remain flexible with no nationwide rent controls, though investors should verify individual building bylaws regarding short-term rental permissions before making investment decisions.
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How does the supply pipeline of new developments compare with current and forecasted demand?
The construction sector is experiencing robust activity with a record 185 promoted projects initiated in 2023, indicating strong developer confidence in market conditions.
New construction is particularly active in central neighborhoods and suburban areas, providing both affordable and luxury options to meet diverse market demand segments.
Supply growth appears well-balanced with demand, as evidenced by the 75% increase in two-bedroom listings in late 2024 that has helped stabilize price growth rather than creating oversupply concerns.
Demand remains robust across all segments, driven by continued urbanization, foreign investment, and domestic population growth that supports healthy absorption rates for new developments.
The focus on modern, sustainable developments with energy-efficient features aligns well with buyer preferences, ensuring strong demand for new supply that meets contemporary standards.
If someone wanted to buy property now, where, what type, and at what price point would make the most sense depending on the use case?
For primary residence purposes, Malvín and Parque Rodó offer the best balance of cost, quality, and accessibility, with comfortable two to three-bedroom apartments available in the $160,000-$300,000 range.
1. **Rental Investment Strategy**: Target Malvín, Cordón, or Ciudad Vieja for gross yields of 5.5-7%, focusing on smaller 1-2 bedroom units that attract steady tenant demand2. **Luxury/Resale Focus**: Invest in Carrasco or Punta Carretas for strongest long-term appreciation and high-end market stability with budgets starting at $250,0003. **Short-term Rental Business**: Choose Pocitos or Ciudad Vieja near the Rambla for top occupancy rates and rental premiums, but verify building regulations first4. **Value Appreciation Play**: Consider Centro or Ciudad Vieja for urban renewal benefits, where gentrification trends support above-average appreciation potential5. **Family Living**: Suburban areas offer spacious homes with gardens starting around $200,000, providing quality of life and moderate appreciation potentialIt's something we develop in our Uruguay property pack.
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.
Montevideo's real estate market in 2025 presents a compelling opportunity for both investors and residents seeking stable, moderate-growth property investments.
The combination of foreign-friendly policies, attractive rental yields, and ongoing urban development creates favorable conditions across multiple property segments and budget ranges.
Sources
- The LatinVestor - Uruguay Price Forecasts
- The LatinVestor - Average House Price in Uruguay
- The LatinVestor - Montevideo Price Forecasts
- Uruguay XXI - Construction and Real Estate
- Ecovis Global - Uruguay's Real Estate Market
- The LatinVestor - Montevideo Real Estate Market
- Global Property Guide - Uruguay Rental Yields
- The LatinVestor - Montevideo Property
- Real Estate in Uruguay - Best Areas to Buy Property 2025
- Global Property Guide - Uruguay Home Price Trends