One estate agent is reporting that half of his sales to foreign investors are to Spaniards. They seem to be particularly interested in the luxury market and commercial premises.
'It is like an invasion is the nicest possible way. At this time 50% of the total sales in the historic centre of Montevideo are to Spanish buyers,' said Isodoro Kosak, a real estate investor and owner of the city's largest real estate company.
'The most important motivator is probably the declining real estate market in Spain. Spanish investors are looking for a quality market in which to invest their capital. They are picking Montevideo because of its good geographic location, seaport, legal system, stable government and good services,' said Lee Harrison, South American expert at International Living.
Other attraction for the Spainish include the culture with Tango clubs and Spanish style cafes and restaurants.
The government is putting a lot of money into the old town with the aim of its fine colonial building being restored to their previous splendor, according to Harrison. Areas have been pedestrainised and there are more markets and shops opening.
'We believe this area of Montevideo has the best potential for capital appreciation. Rental returns in this area are starting to increase, about 5% per year, since Uruguayans do not regard Ciudad Vieja as the best place to live, but this is quickly changing as more and more young professionals choose to live close to where they work, and enjoy the various restaurants, cafes and arts stores,' said Paul Reynolds, managing director of JR Reynolds Propiedades.
There are also ten beaches withing the city and the upmarket parts like Carrasco have green parks and elegant and spacious houses. This is where most corporate and diplomatic people choose to live and where the best international schools are located.