Every January, the rich and famous from around the world descend on this exclusive resort to escape the winter blues. But while second home buyers can generally get more for their money than they would in Europe, prices for properties are among the highest in Uruguay.

Since the early 1960s, Punta del Este has been part of the jet-set’s scene and is widely referred to as the ‘St Tropez of South America’.  Its popularity has led to a growing rise in demand for second homes.  The price of a two-bedroom apartment can range between US$70,000 (€ 46,551) to over US$7 million (€4.655 million).  Meanwhile, properties on large estates range from $400,000 (€275,412) to $10 million (€6.885 million).  

Rentals can be lucrative, in the peak month of January a small villa or apartment has an expected rental income of around $3,000 (€1,995) per week and a well located property with sea views anything from $500 (€344) to $5000 (€3,442) per day.

There are no special restrictions for foreigners buying
property in Uruguay.  The purchase tax is 2% of the value given to the
property by local authorities for council tax purposes which is much less than the purchase
value of the property.

International celebrities who have already invested in the area include the Norwegian multi-millionaire Alexander Vik; the Colombian singer Shakira; the Argentinean supermodel, Valeria Mazza; and singer Julio Iglesias.  Supermodel, Naomi Campbell, designer Ralph Lauren and for-mer Spanish President Jose Maria Aznar are all regular visitors.

The German estate agency Engel & Völkers, which has a strong presence throughout the Balearics and the rest of Europe, is this month opening a new office in the resort focussing on the top end of the market. ‘The thinking behind this new acquisition was to find a Spanish speaking winter sun destination which featured many of the same characteristics as the Balearics; beautiful coastline and landscape, relaxed atmosphere, friendly local people, excellent winter sun climate and good property investment prospects,’ says Christian Czarnetzki, a Mallorca-based agent who is setting up the business.

‘We can now offer on both sides of the Atlantic the opportunity to “chase the sun” and we believe that there is business potential from our existing Spanish and overseas investors already active in the north of Mallorca.’

(0800 9176095; www.uruguayestates.com and www.engelvoelkers.com/puntadeleste)