The Secondary Home Market in Uruguay: A Haven of Peace, Rental Yield, and Wellness Real Estate

Published on April 26, 2026 and written by Cyril Jarnias

Uruguay is establishing itself as one of the most sophisticated markets in Latin America for second homes. Between the beaches of Punta del Este, the colonial streets of Colonia del Sacramento, lofts with views of Montevideo’s Rambla, and countryside “chacras” focused on well-being, the country attracts not only Argentine and Brazilian neighbors, but also a new wave of Europeans, North Americans, and digital nomads.

Good to know:

Uruguay attracts investors thanks to its political stability, steady economic growth, clear taxation, a strong rule of law, and modern infrastructure. Its resilient real estate market offers several options: a second home, an urban pied-à-terre, a luxury seasonal rental investment, or a countryside retirement property.

Solid macroeconomic fundamentals supporting real estate

The second home market does not develop in a vacuum. It is supported by macroeconomic fundamentals that rating agencies and investors consider particularly sound for the region. Uruguay’s economy grew by 3.1% in 2024, after 4.5% in 2022 and 5.8% in 2021, gradually erasing the impact of the drought and the health crisis. Over 2025-2028, projections converge toward annual GDP growth between 2.5% and 3.2%, placing the country among the top tier in Latin America.

4.9

Projected inflation rate for 2024 in the Philippines, within the central bank’s target range.

The three major international agencies rate Uruguay as investment grade with a stable outlook (Baa1 by Moody’s, BBB by Fitch, BBB+ by S&P). Add to that a reputation as the least corrupt country in Latin America, the region’s largest middle class, and a democracy deemed predictable by analysts: for a second home buyer, the institutional risk is significantly lower than that of many neighbors.

On this foundation, the total value of the Uruguayan real estate market was estimated at around $247.5 billion in 2024, with a projection of around $295.3 billion by 2028. The residential segment alone is expected to reach nearly $186.65 billion in 2025, with an annual growth rate of around 4.5%.

A residential market in a phase of controlled expansion

Over the past five years, real estate prices have risen by an average of 8% per year, with a real increase estimated at around 4 percentage points above inflation. This growth is not a flash in the pan: the market is coming out of a long consolidation phase marked by a sharp correction in 2020, followed by a spectacular rebound in 2021 and 2023.

90000

The average price per square meter of a new home in Uruguay in the second quarter of 2025, in Uruguayan pesos.

Already in 2024, the national average price for new construction stood at 85,000 pesos ($2,038) per square meter, after a 13.33% increase year-on-year, of which nearly 8% was real growth. In other words, the 2020 correction has been largely digested, but there are no signs of a bubble disconnected from fundamentals.

52246

Number of real estate purchases registered in 2024, an increase of 3.3% compared to 2023.

Here is a summary of the recent trajectory of volumes, revealing the resilience of the market:

For second homes, this context means you are buying in a growing market, but without excessive overheating. The increase in values is stronger on the coast than in the interior of the country, which reinforces the appeal of seaside areas for investors.

Montevideo: heart of the market but not the epicenter of luxury

Even though Montevideo is not the first destination that comes to mind for a second home, the capital remains the main driver of the market. It concentrated 33.9% of sales in 2024 and 34.4% of transactions between January and July 2025. It is also the most expensive city in Latin America for real estate purchases, with an average of around $3,454 per square meter, driven by coastal neighborhoods like Pocitos, Punta Carretas, or Carrasco.

Good to know:

In Q2 2025, the average price for new construction in Montevideo was 117,000 pesos/m² (≈ $2,918). Year-over-year, the nominal increase is 3.77%, but real prices fell slightly (–1.01% after inflation). A slight quarterly decline (–1.59%) was also observed. The market is considered mature and stable, with prospects for annual growth of 2 to 4% in the short term, then 3 to 5% in the medium term.

For a second home, Montevideo serves more as an urban pied-à-terre than a classic vacation house. Prices vary significantly by neighborhood:

The typical entry ticket for a 70 sqm apartment in the city is thus between $170,000 and $245,000, equivalent to 10 to 15 years of median income for a Uruguayan household. This affordability ratio explains why local demand is sometimes under pressure, especially in middle segments. For a foreign buyer with higher income, particularly in tech (where salaries of $2,300 per month are not uncommon, compared to $600 in traditional services), this relative expensiveness remains acceptable.

4.97

Average gross rental yield in Montevideo in 2025, a slight decline from the previous year.

For a second home used a few months a year and rented out the rest of the time to students, expats, or digital nomads, Montevideo thus offers a moderate but steady yield profile, with a decreasing vacancy risk (residential vacancy rate expected around 5% by 2026).

The coast: kingdom of high-end second homes

If Montevideo dominates in volume, the iconic market for second homes is clearly on the Atlantic coast and the Rio de la Plata. Punta del Este, La Barra, Manantiales, José Ignacio, but also Atlántida, Costa de Oro, Rocha, or Colonia del Sacramento form a string of destinations that position themselves differently, but all answer the same equation: beach + security + predictable taxation.

Punta del Este: the showcase of South American luxury

Long touted as the “Saint-Tropez” or “Monaco” of the region, Punta del Este is transitioning from a purely seasonal beach resort into a city inhabited year-round. The municipality and its neighbor Maldonado already gather around 170,000 residents, including 15,000 newcomers since the pandemic. Second homes here take the form of apartments with sea views, penthouses, beachfront villas, or large properties in the surroundings.

Prices there are the highest in the country for the coastal segment:

It is not just an “expensive” market: it is also one of the best-performing in the country. Over the past five years, values have risen by about 8 to 12% per year, and projections suggest this pace will continue in the coming years. Analysts even mention potential annual returns of 10 to 15% in the short term in some coastal micro-markets, particularly for Punta del Este and neighboring emerging areas like La Barra.

Example:

In Punta del Este, a second home can largely finance itself through seasonal rentals. High-end villas and apartments achieve occupancy rates of 90 to 95% during the peak summer season. For well-located properties, the annual gross rental yield typically ranges between 6 and 7%, and can reach around 12% for ultra-prime properties with dynamic pricing during the very high season.

This combination – capital growth of 8 to 12% and seasonal rental yield of 6 to 7% – explains why nearly 75% of buyers in the luxury segment of Punta del Este are foreigners, mainly Argentines (about 75% of the historical foreign flow), then Brazilians (20%), and a minority of North Americans and Europeans.

La Barra, Manantiales, José Ignacio: the “bohemian chic” arc of high-end

Going up the coast north from Punta del Este, you find a series of villages and neighborhoods that concentrate some of the most sought-after second homes in the country.

La Barra has transformed from a surfers’ town into a trendy spot with gourmet restaurants, galleries, and boutiques. Prices per square meter hover around $2,500 to $3,000 in emerging areas, but can climb significantly higher in high-end segments near the beach.

Attention:

Manantiales cultivates an ’80s Malibu vibe’ with mixed-use real estate projects including small luxury condos, ultra-high-end villas, and gated communities. New developments (Sense, Aldeana, Casa Living Manantiales) offer 2 to 4-bedroom apartments with hotel-style amenities and services (pools, spa, gym, green spaces). Entry prices start around $650,000 for a new 2-bedroom and exceed $1.3 million for a spacious 3-bedroom with sea views.

Further north, José Ignacio has become a kind of laboratory for ultra-exclusive second homes. What was once just a fishing village is now one of the most expensive markets in Latin America, with villas commonly selling for over $2 million, and multi-hectare estates around Laguna Garzón priced much higher. The area is described as a “South American green haven,” combining designer architecture, noble materials, and deep integration into the landscape.

Projects like Las Carcavas (bungalows designed by Isay Weinfeld on plots of 7,600 to over 10,000 sqm, bungalows between $910,000 and $1,010,000, premium land up to $3.2 million), La Petanque (2 to 4-bedroom houses from $925,000 to $1.6 million with private pool), or El Secreto (beachfront gated community) embody this new generation of second homes: ultra-secure, deeply integrated into nature, and designed from the start for an international clientele.

Emerging markets: Atlántida, Costa de Oro, Rocha, Colonia

Alongside these showcases, Uruguay also offers much more affordable options for those seeking a second home without necessarily aiming for the social scene.

13.3

Annual price growth of real estate on the coastal strip of Atlántida, a sign of catch-up compared to more sought-after areas.

The department of Rocha, wilder, with its dunes, lagoons, and protected biospheres, attracts a clientele in search of untouched nature, often sensitive to sustainability themes. Prices there remain below $1,800 per square meter in towns like La Paloma or Cabo Polonio, but appreciation prospects are considered high, particularly in the context of the rise of “wellness” real estate.

Colonia del Sacramento, finally, plays a different tune: a colonial city classified as a UNESCO World Heritage site, it attracts buyers charmed by historical allure and proximity to Buenos Aires via ferry. Median values around $3,500 per square meter place Colonia among the most expensive interiors in the country, but still below the major beach resorts. For a heritage second home, with tourist rental potential, it is a credible alternative to Punta del Este.

A market largely driven by foreigners

One of the major characteristics of the Uruguayan second home market is its strong dependence on foreign buyers. In the luxury and coastal segments, foreigners represent 30% to two-thirds of transactions, with a historical preponderance of Argentines (about 75% of foreign buyers) and Brazilians (20%), and a recent diversification towards Europeans and North Americans.

Good to know:

Uruguay offers complete equality of treatment between nationals and foreigners for real estate purchases, with no nationality restrictions, quotas, or prohibited areas. A non-resident can acquire the same types of properties (beachfront apartment, city house, agricultural property) with the same property rights as a Uruguayan citizen.

Then, there is the simplicity of the legal framework: every transaction goes through a notary (“escribano”) who reviews the title chain for 30 years, checks for outstanding debts, drafts the deeds, and registers the sale. This function, very protective for the buyer, greatly reduces the risk of unpleasant surprises. The price of this security is reflected in closing costs, generally between 7 and 10% of the purchase price (notary fees, 2% transfer tax on cadastral value, registration fees, agent commission of about 3% plus VAT).

Tip:

Uruguay offers an attractive tax framework for real estate investment. There is no specific tax on real estate capital gains. For non-residents, the net capital gain is taxed at a flat rate of approximately 12%, after inflation adjustment. Rental income, on the other hand, is subject to a withholding of 10.5% to 12% via the non-resident income tax. This fiscal stability, often perceived as more competitive than Western European systems, can be combined with a tax residency strategy.

In parallel, obtaining Uruguayan tax residency through real estate is possible above certain investment thresholds (several hundred thousand dollars, with recent evolution towards higher amounts to benefit from a “tax holiday” on foreign income). The combination: second home + wealth optimization naturally attracts significant assets.

Rental yields: seasonal on the coast, steady in the city

For a buyer who does not plan to occupy their second home full-time, the question of rental yield is central. The landscape is quite contrasted depending on location and usage.

Good to know:

In urban areas, particularly Montevideo, gross yields for apartments generally range between 4% and 6%. Some neighborhoods like Malvín, La Blanqueada, or Pocitos Nuevo can approach or exceed 6.5%. Rental demand is driven by students, young professionals, middle-class families, as well as expats and digital nomads. The latter are attracted by the quality of the internet (widespread fiber optics, 200 Mbps speed available) and proximity to tech companies concentrated around the LATU Innovation Park.

Nationally, residential rents are increasing at a steady pace: +5.5% in July 2025 year-over-year, following increases of 5 to 6% per year since 2020. Montevideo shows an average rent of around 21,626 pesos per month (approximately $542), while Canelones is around $505 and San José $376.

100000

Some ‘trophy’ properties on the Uruguayan coast can exceed $100,000 in rent for a single week during high season.

For an investor, this means that the profitability of a coastal second home depends heavily on the ability to manage these three key months well. A property well-marketed through specialized networks or local agencies can generate in one season the equivalent of a year of classic urban rents. Conversely, imprecise management greatly reduces the financial interest compared to a rental apartment in Montevideo.

The rise of “wellness” real estate and chacras

Beyond the classic triptych (city – seaside – colonial), Uruguay is seeing a booming segment emerge: wellness-related real estate. The country is becoming a flagship destination for “Wellness Real Estate,” driven by wealthy individuals seeking properties that promote health, longevity, stress reduction, and connection with nature.

10

In wine regions, house prices have increased by about 10% per year recently.

Developers are responding by systematically integrating sustainability criteria: local materials, biophilic design favoring natural light and cross-ventilation, solar systems, rainwater harvesting, enhanced insulation. Market data already shows that properties equipped with solar panels sell for an average of 12% more than others, and homes with ocean views benefit from a premium of about 30%.

Wellness Epicenters in Uruguay

Discover the Uruguayan departments that concentrate the most significant investments and projects in the well-being and health tourism sector.

Maldonado

High-end wellness hub, concentrating projects like the Alive Health Spa Resort and the SLS Punta del Este complex, which combine accommodation, treatments, sports activities, and private residences in iconic locations such as Punta del Este and José Ignacio.

Rocha

Attracts investors seeking more authentic and nature-close experiences, away from the social frenzy, thanks to its preserved landscapes of lagoons and protected wetlands.

In the medium term, analyses predict that this “wellness” segment will be one of the main drivers of real estate activity, especially for second homes. In a context where teleworking and extended stays are becoming commonplace, having a country house within a few hours’ flight of major regional metropolises, equipped with adequate internet infrastructure and quality health services, becomes a highly sought-after product.

Affordability and financing: a constraint for locals, an opportunity for foreigners

If Uruguay attracts so many foreign buyers, it is also because bank financing is more difficult for the local population. Mortgage rates, for loans over 20 years, range between 6 and 10%, with a very concentrated market around Banco Hipotecario del Uruguay, which handles about 80% of housing loans. The central bank’s key interest rate, still close to 8.25% in fall 2025 after several successive cuts, limits the space for massive cheap loans.

Result: many Uruguayans are forced to remain tenants or focus on more affordable peripheral areas, where the square meter can drop to $750. This constraint reduces local competition in certain segments, particularly on premium products that are de facto intended for an international clientele.

Good to know:

For foreigners, banks like Banco República, Santander, or Scotiabank offer loans, but with strict requirements: a down payment of 30 to 50% (sometimes more) and thorough income verification. In practice, many second home buyers pay cash or use seller financing: developers or owners accepting installment payments over 3 to 5 years, with interest rates between 5 and 8% in dollars.

This abundance of foreign equity contributes to the market’s solidity: there is little bank leverage, hence less risk of a default spiral in the event of a shock. Conversely, it accentuates the risk of crowding out for local buyers in the tightest coastal areas, a subject increasingly debated in other Latin American cities (like Mexico City or Medellín) facing a wave of digital nomads and international investors.

Public policies, climate, and infrastructure: factors that matter for the long term

For a second home buyer, the time horizon is often long. In this regard, two elements deserve special attention: the evolution of public policies and the country’s ability to manage climate risks, particularly along its long coastline.

Tip:

Uruguay offers a framework of incentives for real estate investment through Law 18.795, extended until 2026 for projects completed before 2028. This regime includes exemptions from income tax, wealth tax, VAT on certain inputs, and transfer tax. Projects certified as ‘green’ or sustainable (such as LEED) receive additional benefits. For an investor, acquiring a second home within a ‘promoted’ project can mean greater liquidity on resale and more stable rental demand.

On the infrastructure side, the country has invested nearly $7.2 billion in its roads, ports, and networks up to 2024, including $3.7 billion for national roads over five years. Improved access, both by road and by sea (expansion of the Montevideo container terminal, channel dredging, new passenger terminals), strengthens the attractiveness of the coast for second home use. For those coming regularly from Argentina or Brazil, travel time and comfort matter.

45

Annual damages related to coastal erosion in Uruguay could exceed $45 million.

For a second home buyer, this does not mean giving up beachfront, but it encourages careful examination of each project’s exposure (elevation, protection, local policies) and prioritizing developments that already incorporate adaptation measures (restored dunes, soft protections, set-back construction).

Outlook: moderate growth, strong segmentation, and sustainable upscaling

Everything indicates that the second home market in Uruguay will remain buoyant in the coming years, but with highly differentiated dynamics depending on the area.

Montevideo should continue on a contained growth trajectory (2 to 4% in the short term, 3 to 5% thereafter), with stable urban rental yields around 5 to 6%. Ideal for those who prioritize stability and a mixed city/work/weekend use.

Attention:

Established coastal markets (Punta del Este, La Barra, José Ignacio) should maintain appreciation of 6 to 12%, potentially reaching 15% in developing areas. The main risk is not demand, which is stable thanks to a loyal international clientele, but an oversupply in the ultra-luxury segment if too many spectacular towers are launched simultaneously.

Emerging markets like Costa de Oro, Atlántida, Rocha, and Colonia seem to offer the best compromise today for a long-term-oriented second home: still moderate price levels, double-digit appreciation potential recently observed, and growing tourist flows thanks to the state’s diversification and promotion efforts.

Good to know:

With the generalization of teleworking and increased demand for healthy and sustainable environments, well-located rural properties in Uruguay, with good connections and ecological features, are set to become a pillar of the second home market.

For both the investor and the lifestyle buyer, the key will be to navigate this mosaic of micro-markets with fine-grained information: compare the price per square meter between coast and interior, measure the pairing of rental yield and capital appreciation potential, and integrate sustainability and coastal adaptation issues from the start. In this balancing act, Uruguay today offers a rare terrain in Latin America: a combination of legal security, macroeconomic stability, and diversity of options that makes it a privileged playground for high-end second homes as well as for more modest but ambitious long-term projects.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

Find me on social media: