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House prices in Montevideo are unlikely to go down in the near future, with market fundamentals supporting continued moderate growth through 2025-2027. Based on current economic indicators, foreign investment trends, and supply-demand dynamics, property values are expected to increase by 3-5% annually, driven by stable demand from both local buyers and international investors, particularly from Argentina and Brazil.
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Montevideo's residential property market shows strong fundamentals with steady price appreciation over five years and robust foreign investment activity.
Current market conditions indicate continued growth potential rather than a downturn, supported by moderate inflation, competitive mortgage rates, and ongoing population growth.
| Market Indicator | Current Status (September 2025) | Trend Direction |
|---|---|---|
| Average Price per sqm | US$2,420-$2,704 citywide | ↑ 1.2-2.9% year-over-year |
| Annual Price Growth | 2.9% (latest year) | ↑ Moderate appreciation |
| Properties for Sale | 448 listings | ↑ Increased inventory, balanced market |
| Selling Timeline | 30-60 days | ↓ Slightly faster sales |
| Rental Yields | 4.97% average | ↓ Slight decrease from 5.37% |
| Foreign Investment | 30-66% of luxury purchases | ↑ Strong international demand |
| Expert Forecast | 3-5% annual growth expected | ↑ Positive outlook 2025-2027 |
What have house prices in Montevideo done over the past five years?
Montevideo's residential property prices have shown consistent upward movement from 2019 to 2025, with annual increases ranging from a modest 0.9% in 2023 to a peak of 9.7% during the pandemic boom year of 2021.
The most recent data ending in June 2025 shows a 2.9% price increase, indicating the market has stabilized into a pattern of moderate but steady appreciation. This represents a return to sustainable growth levels after the volatility experienced during the COVID-19 pandemic period.
The five-year trend demonstrates Montevideo's property market resilience, weathering both global economic uncertainty and regional challenges while maintaining positive price momentum. Unlike many Latin American cities that experienced significant price corrections, Montevideo's market has avoided major downturns.
This steady appreciation pattern suggests strong underlying demand fundamentals and positions the market favorably for continued growth rather than a price decline scenario.
What's the current average price per square meter in Montevideo, and how does it compare to last year?
As of September 2025, Montevideo's average residential property price ranges from US$2,420 to US$2,704 per square meter citywide, representing a 1.2% to 2.9% increase compared to the same period in 2024.
Premium neighborhoods command significantly higher prices, with Carrasco, Pocitos, and Punta Carretas ranging between US$3,500 to US$4,260 per square meter. These upscale areas have experienced some of the strongest price appreciation, outpacing the city average due to high demand from affluent local buyers and foreign investors.
The year-over-year growth rate, while moderate, indicates healthy market momentum without signs of speculative overheating. This price trajectory aligns with Uruguay's controlled inflation environment and steady economic conditions.
Compared to regional capitals like Buenos Aires or São Paulo, Montevideo's prices remain competitive while offering superior quality of life and political stability, making it attractive to international buyers.
How many homes are currently for sale compared to the historical average?
Montevideo currently has approximately 448 properties listed for sale as of mid-2025, representing an increase in inventory since mid-2024 that has helped stabilize the market.
This inventory level supports a balanced market condition rather than the supply shortages that can drive rapid price increases. Transaction volumes increased 3.9% in early 2024 compared to the previous year, following a 15% jump in 2022, demonstrating consistent demand above pre-pandemic levels.
The current inventory provides buyers with reasonable selection while preventing oversupply conditions that could pressure prices downward. Market analysts consider this a healthy equilibrium that supports stable price appreciation.
The increased supply has not overwhelmed demand, as both domestic and foreign buyers continue actively purchasing properties, particularly in the luxury segment where international investors remain highly active.
How quickly are houses selling right now compared to six months ago?
Properties in Montevideo are currently selling within 30 to 60 days on average, representing a slight improvement in selling speed compared to earlier in 2025.
This timeline has shortened due to strong demand from both local buyers and foreign investors, particularly those from Argentina and Brazil seeking stable real estate investments. The faster sales pace indicates robust market activity rather than distressed selling conditions.
Premium properties in sought-after neighborhoods like Pocitos and Carrasco often sell even faster, sometimes within 2-3 weeks of listing, reflecting the competitive nature of the high-end market segment.
The improved selling speed suggests healthy buyer confidence and sufficient financing availability, both positive indicators for continued market stability and growth.
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What's the trend in mortgage interest rates in Uruguay, and how might that affect demand?
Uruguay's central bank rate stands at 9.25% as of September 2025, with average mortgage rates ranging from 6% to 10%, which remains regionally competitive compared to neighboring countries.
Bank lending rates have shown a gradual downward trend, falling from 17.5% in December 2024 to 16.9% in January 2025, indicating monetary policy is becoming more accommodative. This trend supports continued borrowing activity for property purchases.
The current mortgage rate environment provides stable financing conditions without creating excessive borrowing demand that could lead to market overheating. Rates are low enough to maintain buyer activity but not so low as to encourage speculative investment.
The stable and gradually improving rate environment supports sustained housing demand from qualified buyers, contributing to the positive price outlook rather than creating conditions for a market downturn.
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How has inflation and the general economy in Uruguay been performing recently?
Uruguay's annual inflation rate reached 4.59% in June 2025, marking the lowest level in over a year and falling comfortably within the central bank's 3-6% target range.
GDP growth is projected at 2.1% for 2025, representing moderate but stable economic expansion. While consumption and investment remain somewhat subdued, the Uruguayan peso has maintained strength and the external sector shows resilience.
The central bank is maintaining a moderately restrictive monetary policy stance to ensure inflation control, which supports currency stability and investor confidence. This controlled inflation environment prevents the erosion of property values that can occur during hyperinflationary periods.
Uruguay's economic fundamentals, including low inflation, stable currency, and moderate growth, create favorable conditions for real estate investment and support continued property price appreciation rather than decline.
What are population and migration trends in Montevideo—are more people moving in or out?
Montevideo's metropolitan area population reached 1,788,170 in 2025, growing by approximately 6,800 people over the past year, indicating continued urban growth and housing demand.
The city is experiencing moderate increases in foreign arrivals, primarily from Venezuela and Cuba, which helps sustain housing demand. While Uruguay faces some net emigration as locals seek opportunities abroad, Montevideo continues attracting its share of international migrants.
This population growth, combined with household formation trends, creates underlying demand for residential properties that supports price stability and growth. The international migration component is particularly important as these newcomers often purchase rather than rent properties.
The steady population increase ensures continued housing demand, making significant price declines unlikely in the near to medium term.
How much new housing construction is happening, and is it adding oversupply to the market?
Montevideo is experiencing ongoing new construction activity, supported by government tax incentives and breaks that have been extended through 2026, encouraging development activity.
Current construction levels appear balanced with demand, as no evidence of oversupply has emerged in the market. The pace of new home completions is being absorbed by steady buyer demand from both domestic and international purchasers.
Government incentives have stimulated quality development projects rather than speculative overbuilding, helping maintain market equilibrium. Developers are responding to demand signals rather than building speculatively.
The controlled pace of new supply addition supports price stability and growth rather than creating oversupply conditions that could pressure prices downward.
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's the current rental yield in Montevideo, and is it going up or down?
The average gross rental yield in Montevideo stands at 4.97% as of Q2 2025, representing a decrease from 5.37% in Q2 2024, reflecting rising property prices relative to rental income growth.
| Neighborhood | Rental Yield Range | Market Characteristics |
|---|---|---|
| Malvin | 6.0% - 6.7% | Emerging area with good value |
| Centro/Ciudad Vieja | 5.1% - 5.3% | Historic center, stable rental demand |
| Pocitos | ~5.0% | Premium location, lower yields but higher capital appreciation |
| Carrasco | 4.5% - 5.0% | Luxury area, focus on capital gains |
| Punta Carretas | 4.8% - 5.2% | Upscale neighborhood, strong rental market |
Are foreign investors buying more or fewer properties compared to past years?
Foreign investors, primarily from Argentina, Brazil, and Europe, accounted for 30% to 66% of luxury segment purchases in 2025, representing the highest levels of international investment activity in recent years.
This surge in foreign investment is driven by Uruguay's political stability, favorable tax environment, and attractive property prices relative to buyers' home countries. Argentine investors are particularly active due to their country's economic uncertainty and currency instability.
The strong foreign investment component provides additional demand support that reduces the likelihood of price declines. International buyers often have stronger purchasing power and view Montevideo real estate as a safe haven investment.
Continued high levels of foreign investment activity, especially in premium and coastal properties, supports price stability and growth in these market segments.
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What government policies, taxes, or subsidies could affect housing demand or supply in the near future?
The Uruguayan government has extended tax incentives for new real estate developments through 2026, providing continued support for construction activity and market supply.
Transaction costs remain moderate at 7% to 10% of the property sale price, which is competitive compared to regional standards and does not create significant barriers to market activity. No new restrictions on foreign ownership have been implemented, maintaining Uruguay's open investment environment.
The government's pro-investment stance and stable regulatory environment continue attracting both domestic and international buyers. Uruguay remains one of the most foreigner-friendly property markets in Latin America.
Current policy stability and the absence of restrictive measures support continued market growth rather than creating conditions that could lead to price declines.
What do local real estate experts and banks forecast for Montevideo prices over the next 12 to 24 months?
Local real estate experts and financial institutions forecast moderate annual price growth of 3% to 5% through 2026, with stronger appreciation expected in revitalized neighborhoods and luxury market segments.
Market analysts see continued momentum driven by steady demand fundamentals, ongoing foreign investment, and supportive economic conditions. The consensus view excludes any significant risk of speculative bubble formation or major price corrections.
Banking sector forecasts align with real estate expert predictions, citing stable lending conditions, controlled inflation, and sustained buyer demand as supporting factors for continued price appreciation.
The expert consensus strongly favors continued price growth over decline scenarios, based on current market fundamentals and economic indicators pointing toward sustained stability and moderate appreciation.
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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.
Based on comprehensive market analysis, Montevideo's residential property prices are unlikely to decline in the foreseeable future, with fundamentals supporting continued moderate growth.
The combination of steady foreign investment, controlled inflation, balanced supply-demand dynamics, and supportive government policies creates a favorable environment for property value appreciation rather than decline through 2025-2027.
Sources
- Global Property Guide - Uruguay Home Price Trends
- The LatinVestor - Average House Price in Uruguay
- The LatinVestor - Uruguay Price Forecasts
- Aparthotel - Uruguay Market Analysis
- The LatinVestor - Montevideo Price Forecasts
- Global Property Guide - Uruguay Price History
- The LatinVestor - Montevideo Property
- Century 21 Global - Montevideo Listings
- CEIC Data - Uruguay Bank Lending Rate
- Trading Economics - Uruguay Inflation