Uruguay Real Estate: Why Its The Perfect Location For Expatriates

The picturesque, sleepy Uruguay town of Punta del Este represents a unique opportunity for savvy investors. Boasting affordable real estate, a remarkably high standard of living, and a party season each summer that transforms the town into a prime spot for South America's rich and famous, Punta del Este is primed for a real estate boom. See the following post from Daily Wealth for more on this.

I'm writing to you from a farm in South America...

There are three horses outside my bedroom window. My host, Fitzroy, lets horses roam his property. In the morning, we find them munching grass on the front lawn. And when we're having afternoon tea on the back patio, they'll come wandering slowly past...

In a moment, my wife and I will walk across the garden, past the horses, to the main house, where we'll join Fitzroy's family for breakfast. The housekeeper, Alexandra, is there. She's already set the table, pressed the oranges, and prepared a large plate of organic sausage, ham, and eggs.

After breakfast, we'll saddle the horses and Fitzroy will take us for a trot around his property...

We're in Uruguay, in a town called Punta del Este.

They call Uruguay the "Switzerland" of South America because of its powerful banking secrecy laws. It's also one of the last countries in the world where you can own property anonymously. Finally, there's no tax on foreign earnings. So Europeans and South Americans move here to avoid income taxes.

These laws attract money to Uruguay. Uruguay is the second-richest country in South America, after Chile.

For six weeks every summer, Punta del Este is the most important party town in South America. If you're a celebrity here, this is where you come for your summer vacation. If you're a wealthy aristocrat from Brazil, Argentina, or Columbia, you come here to party with the celebrities.

During this "party month," tables at nightclubs sell for $10,000 a night, rents jump 4,000%, and it takes two hours to move across town because of the traffic.

Luckily, high season doesn't start until January. For now, we're the only tourists in town...

For full-time residents, Punta del Este is a sleepy seaside town. Three-quarters of the houses and apartments are empty. Most of the restaurants are closed. And they disconnect the traffic lights. The standard of living for these folks is extraordinarily high...

Fitzroy, for example, lives in a large country house with wooden floors and big windows. He has a lake, a forest, and a horse paddock on the grounds. On the other side of the lawn, there's a cottage for the housekeepers and another cottage for guests.

He told me his country estate would sell for around $750,000 if it were on the market today. The same property in England or America would cost 10 times as much...

We went on a tour of Punta del Este's real estate market with Fitzroy. We found dozens of seaside cottages and small homes for under $200,000. They come with neat lawns, brightly painted walls, and fruit trees. Most of them even have separate quarters for housekeepers. A full-time housekeeper costs $400 a month. The country club charges $150 a month for offseason membership. And the top private school charges $200 a month per pupil.

The weather is wonderful. It never freezes. In the summer, you rarely need air conditioning. Travel connections are great, too. The international airport is two hours away and offers direct flights to the United States and Europe.

In short, Punta del Este is the perfect location for expatriates. It's cheap, easy to reach, and the quality of life is unbeatable, even in America. Best of all, there's going to be a property boom here as money flees from the bankrupt governments in America and Europe.

If you ever get the chance to visit Punta del Este, I highly recommend it. Just make sure you avoid the party season... unless you like that sort of thing.

This post has been republished from Daily Wealth, Steve Sjuggerud's contrarian investment site.

Real Estate Biggest Gainers And Losers In The First Quarter

Despite the global financial crisis some countries have managed to show small growth in their real estate market while others have tumbled significantly in the first quarter of 2009. Which countries have managed to overcome the global economic turbulence? The following article by Overseas Property Mall takes a look at the biggest gainers and losers of the first quarter and a housing outlook by Knight Frank Global.

The Q1 Knight Frank Global House Price Index 2009 hasn’t shown surprising results in the scheme of the global financial crisis. Some of the key highlights has seen Israel as the top performer with a 10.9% growth rate, followed by the Czech Republic with 9.9%.

On the contrary, the worst activities were seen in Dubai, Latvia and Singapore. Dubai recorded average price falls of 32%, Singapore 23% and Latvia 36% loss. On a quarterly basis, Dubai was the biggest loser with -40%.

In terms of best performing markets, Thailand with a 2.7% lift in values, Israel with +2.6% and Switzerland with +2.1% were showing promising results.

However, according to the Q1 report, a full 30% of the sources usually reported on had not returned their Q1 data at the time of writing the Knight Frank Global House Price Index.

Despite some of these markets having seen a rise in values, economists believe that the outlook for the global markets is still grim. Head of international research, Knight Frank, Nick Barnes said:

The world’s housing markets remain under intense pressure with little real evidence of any of the hoped for ‘green shoots’ and even the improvement in performance shown in some countries in the last quarter may yet turn out to be a false dawn according to some commentators. Recent projections from the Organization for Economic Co-Operation and Development (OECD) do little to promote a more optimistic viewpoint – GDP growth is forecast to drop by an average 4.3% in the OECD area in 2009 while by the end of 2010 unemployment rates in many countries will reach double figures for the first time since the early 1990s.

The inescapable trend is that the worst and most widespread economic recession since the 1930s continues to batter housing markets across the globe. Rising unemployment and concern among those still in jobs, added to constrained credit conditions, means that buyer demand for housing remains suppressed and confidence is low in most markets which is inevitably having a negative impact on house prices. There is sporadic evidence of buyers snapping up relative bargains, however of those buyers in a position to move, many are still waiting for clearer signs that markets are approaching the bottom of the cycle. Moreover, in a falling market, sellers are usually forced to a greater or lesser extent which means that opportunities to buy are greatly reduced and transaction volumes correspondingly low.

Against this backdrop, it is perhaps unsurprising that of the official sources used in the Knight Frank Global House Price Index, 14 (equating to 30% of the total index) had not reported Q1 data at the time of writing this report. We can only surmise that the data collection bodies have either been unable or unwilling to publish the data to timetable – perhaps a reflection of the ailing health of their respective residential property markets?

Of the first quarter data which we have received, Israel was the top performer over the 12 month period ending Q1 2009 recording growth of 10.9%, followed by the Czech Republic at 9.9%. The better performing markets tend to be smaller and with fewer structural imbalances. The worst performers were Latvia and Dubai who recorded a fall in average prices over the period of, respectively, 36% and 32%. Singapore also reported a hefty 23% drop in values while a further five countries also returned double digit declines.

On a quarterly basis, 69% of the countries from whom we received Q1 data reported a drop in prices compared to 82% in our Q4 2008 index. However, on an annualized basis, 72% of countries showed a fall in values compared to 59% in Q4. Given the high proportion of “absentees” for Q1, however, it would be potentially misleading to jump to too many hasty conclusions, although over half had shown annual and / or quarterly price falls at the last time of reporting. Nonetheless, the shorter term future direction of most underlying economies suggests that the world’s residential markets are likely to continue to suffer for some while.”

The UK saw a loss of values of - 16.5%, followed closely by the U.S with -16.9%. This resulted in a rank fall of 10 places from Q1 2008 to Q1 2009 for the UK and a respective loss of 4.5% year-to-year.

Biggest price rises, first quarter 2009

1. Jersey up 5.6%
2. Finland up 4%
3. Thailand up 2.7%
4. Israel up 2.6%
5. Switzerland up 2.1%

Biggest price falls, first quarter 2009

1. Dubai down 40.0%
2. Singapore down 16.2%
3. Estonia down 9.9%
4. Norway down 6.2%
5. Denmark down 6.1%

To see the full list of ranks click here.

This post can also be viewed on overseaspropertymall.com.