Uruguay is a country with a rich agricultural history and a growing reputation as a stable and attractive investment destination. In recent years, there has been a surge in interest in purchasing ranchs and land in Uruguay, particularly for agricultural and forestry assets. This article provides an overview of the current land market highlighting key trends, factors influencing prices, and potential opportunities for investors.
While the total area of land sold in Uruguay experienced a slight decline compared to 2022, average prices per hectare remained high, reaching US$3,741. This marked the highest price point for farmland since 2014.
Despite the challenging economic conditions of 2023, the market for lands in Uruguay remained resilient, with prices continuing to rise. This was driven by a combination of factors, including:
There is a high level of interest in purchasing land in Uruguay from both domestic and international investors. This demand is fueled by the country’s favorable economic climate, political stability, and strong agricultural sector.
The availability of land suitable for agriculture and forestry is an asset relatively limited. That has helped to keep prices firm.
The Uruguayan government has implemented a number of policies that encourage foreign investment in the agricultural sector, including tax breaks and subsidies.
Some of the key trends in the land market in Uruguay include:
Investors are increasingly interested in purchasing land in areas with high agricultural productivity, such as the departments of Colonia, Soriano, and San José.
There is a growing demand for land assets suitable for forestry, as investors seek to capitalize on the increasing global demand for wood products.
Farmland prices have been steadily increasing in recent years, with no signs of slowing down.
The departments of Rocha, Tacuarembó, and Lavalleja concentrated the majority of land transactions, with prices ranging from US$2,980 to US$3,980 per hectare.
Lands with higher agricultural productivity -Coneat Index-, such as those in Colonia, Soriano, and San José, commanded the highest prices, averaging US$8,437, US$7,356, and US$5,564 per hectare, respectively. However, at the other end of the spectrum, Artigas had the lowest price at US$1,993 per hectare. Notably, 26% of the 62,000 hectares sold were traded under the CONEAT Index scale of 60 and 80, at an average price of US$3,167 per hectare.
The Uruguayan land market witnessed several extraordinary transactions, highlighting the strong interest and high prices. Agricultural land suitable for intensive farming, particularly in the central and southern regions, fetched prices exceeding US$12,000 per hectare. Large-scale forestry land acquisitions were driven by the growing demand for wood pulp and timber products. Investors also demonstrated interest in acquiring land for long-term appreciation or as a hedge against inflation.
Before investing in land in Uruguay, it is crucial to carefully consider the following factors:
Conduct thorough research: Conduct in-depth research on the land market, the specific property you are considering, and the surrounding area.
Seek professional guidance: Consult with experienced lawyers, real estate agents, and agricultural consultants to ensure informed decision-making.
Understand the legal and regulatory framework: Familiarize yourself with the legal and regulatory framework governing land ownership and investment in Uruguay.
With decades of experience in the Rural Real Estate market, Escritorio Arrospide is a well-established firm in the agricultural sector for three generations. We are committed to guiding you towards making informed decisions about your land investment.
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Source: Informe Serie Precio de la Tierra del MGAP 4/15/2024
