Uruguay property market knocked back by neighbour

The Uruguay property market suffered a serious knock back this year, according to new figures, as next door neighbour Argentina seemed to lose interest.

Transactions in Punta del Este dropped by 30 per cent compared to 2011, according to iProfesional.com. The country's major tourist hotspot has always been a popular place for investors, but while domestic interest stayed steady, demand from Argentina dropped. Indeed, the total volume of investments in new projects for this year also fell by 25 per cent.

Montevideo, the largest property market in the country, is also predicted to suffer.

What has caused the Argentines to lose interest? Currency regulations are mostly to blame, experts suggest, with a tax sharing agreement between the countries not helping to encourage trade.

Despite the transactions slipping, though, Punta del Este property prices have stayed surprisingly high, adds OPP, with values actually increasing by 15 per cent over the last 12 months to reach $4,080 per square metre.