Maldonado, Uruguay (UD) -Real Estate tax revenues, factoring in inflation, for Maldonado for the month of January 2010 was very similar to January of 2009. In other words, it showed very little year over year change.
Uruguay Still Booming, Foreigners and Expats Abound
I was reading la nacion this morning in the Punta Carretas mall McChundley’s this a.m. — the McCafe actually and the reports for the year end 2009 are rolling in from the various ministries.
As much as I could understand what I was reading, things seem to still be booming down here.
If local tourist traffic is any indication, that part of the local economy doesn’t seem to be suffering any either.
I spent January in the city like I pretty much every summer since I arrived. I think I’m the only montevidean left in the city as the entire city empties and goes to their various summer retreats on the coastline. For those not wealthy enough to own a plot of land or apartment or condo or house along the coast, they simply rent from one of the few who is wealthy enough to own several 
The model for the coastal landlord seems to be that they’d like to make the entire year’s expenses and profit on their investment back in the two months of January and February. If they are lucky enough to get some sucker in there over Christmas or semana santa then it’s a total ‘home run’ year.
This weekend as January comes to a close it’s really weird. It seems like all the people who opted to take January off aren’t back yet and the people who opted for February left early as the weekend bumps up against the beginning of the month. Even the brasilians and argies who should be here on the way to the coast seem to be absent.
When I went into the office that is responsible for national identity cards, there were signs everywhere that they were short handed due to personnel shortages. I imagine it was the unfortunate government employee who drew the short end of the straw and ended up in a beige government office in centro with no a/c, overhead fans spinning endlessly in an attempt to move around the heavy air, pregnant with 120% humidity.
The lines themselves, which as any line in Uruguay is paced by the distribution of the ubiquitous deli-counter (take a number and wait) method, seemed to be devoid of locals as well. A few guys and gals that had the “stink” of the interior (or Uruguay) about them. Some nuns and missionaries from peru or parts where ladies are expected to be 4′8” and of course the out of place expat or two, like myself, looking to secure residency or second passports in Uruguay.
Thankfully, the lines were relatively empty because even with the empty lines it took about 4 hours to go through the 8 lines that just got me to the point of setting an appointment, to be able to set an appointment to be able to start a process that would take a few more weeks.
I’ll be trying to get the rest of my residency issues together next week and the week thereafter, and I imagine by this time next week we’ll be back to ‘normal’ with the local joints filled with brazilians and the city completely devoid of uruguayans.
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Uruguay Sun
I took two separate day trips the last couple of days to el pinar, the montevideo suburb with white sandy beaches, and water of questionable clarity, and then again to Colonia, the oldest settlement of Europeans in Uruguay.
The first trip to El Pinar took place on an incredibly sunny day. We went out way too close to midday and the sun was high overhead and the UV index had to have been out of this world. A lot of the senior citizen set was out — you know the type — like the old gray haired, sun spotted, senior, tanning themselves with the aid of a silver reflective screen in order to intensify the color and size of their age spots and wrinkled, sagging sun damaged skin. Sun spot removal is one of the staples of the large plastic surgery and dermatologist business in both Argentina and Brazil — not as much here.
I hid myself under a sun umbrella and copious amounts of sunblock. My sunscreens were rated at 50 SPF, 60 SPF, and 80 SPF. Sunscreens and tanning oils, etc are incredibly expensive in Uruguay for some reason, but I had to have it. You see, apparently there is some ‘hole’ in the ozone layer here that makes the sun’s ultraviolet rays really, really, dangerous and the white skinned people of Uruguay have some of the highest incidences of skin cancer on the planet.
Since the outgoing president is an oncologist this has gotten a lot of play lately, with big public health campaigns to encourage the sun worshipping south americans to wear protective clothing, use sunblock and to stay out of the direct UV during the peak hours of the late morning to early afternoon.
To wit, just as we were leaving in sunburned shape for the shade and some rest, the beach started filling up with dozens of car loads of families and younger people arriving in time to enjoy the safer late-afternoon light.
A visitor I’m hosting in town wasn’t very impressed.
I think that a majority of the ‘beautiful people’ are probably in Punta del Este this time of year (the first half of January) as seemingly the entire country takes the month off to go sit on the beach, tan themselves in the sun, sleep in, and drink heavily and party until sunrise.
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Uruguay GDP grows 2.5% Q o Q
GDP grew 2.5%
The central bank on Tuesday released the National Accounts Quarterly report for July-September. According to the data, the Gross Domestic Product (GDP) grew 2.5%.
The Uruguayan economy grew for the second consecutive quarter. The quarter on quarter growth is 2.5%, bringing the cumulative growth of GDP at 1.7% so far this year.
Uruguay’s year started poorly with a fall of 2.5% in the first quarter of 2009. However, Uruguay quickly recovered and helped to avert a recession, commonly defined as the fall of GDP for two consecutive quarters.
The third quarter growth exceeded forecasts last collected by the Commercial Bank of Uruguay and caused the economic team to revise upward the growth forecast for this year, which currently stands at 1.2%.
The economic team had already announced it would correct upwards the growth projections after knowing the figures for the third quarter.
Sectors
In seasonally adjusted terms (compared with same month of previous year), most sectors showed higher positive rates in the third quarter compared with the previous.
The growth sectors were: Agriculture (6.8%) and the Electricity, gas and water (96.3%).
The industry Electricity, gas and water presented a growth of 34.6% in the third quarter compared to the same quarter last year. This level of growth was mainly due to the production of electrical energy. This # was distorted due to drought which causes them to generate electricity differently.
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Construction Costs Rising in Uruguay and Argentina
Alfredo Sainz from THE NATION
After a year with no change in prices for new homes in Buenos Aires, experts are predicting prices rises in 2010.
Real estate professionals and developers are predicting further increases in the values of the apartments and houses, caused general inflation and increases in the costs of construction.
According to projections made by entrepreneurs, fully finished price per square meter property costs should be about 10% higher this year as compared to 2009 prices. There is also a suspicion that the higher construction costs will lead to general inflation in the cost of older finished properties as well.
“What we’re envisioning is a scenario of an increase in construction costs of around 10 or 15 percent, which inevitably will have an effect on the price per square meter of new construction,” said Eduardo Gutierrez, President Farallon developer group who is developing projects in Pilar and in Uruguay.
“At the end of 2009, we noticed a change in the market and an upturn in demand, which are making the prospects for 2010 look very good. Under the new scenario, we projected that, without a further decline in the dollar, there may be a further adjustment in prices, around 10 percent, especially among new build properties, “said Nestor Walenta, president of the Cámara Inmobiliaria Argentina.
According to numbers from the National Institute of Statistics and Census (INDEC), in 2009 construction costs rose 10.8 percent, caused primarily by increases in material costs.
In most cases, this rise could not be passed on to the retail consumer, and therefore squeezing the margins of developers while at the same time sales slumped with sales declining 21.8% in Buenos Aires y/o/y.
This year, managers expect further price inflation of materials and are worried about labor costs following the general trend upward in prices.
The soybean effect
The market also includes the potential role of soy in the revival of property sales by brand in Rosario and in some districts of the Federal Capital, which are the most sought after by employers in the field.
“When the farmer is doing well, one of its first investment options are the buildings, because in general they are very conservative investors.
Similarly, we must not forget that these funds will only be used to buy in well established areas. So in general they would have a positive impact in Recoleta or Puerto Madero, but hardly sit on newer options as Parque Patricio, “said Jose Rozados, director of consultancy Reporte Inmobiliario.
“With summer on the coast, so good, all buying decisions moved to March, which is still difficult to anticipate what will happen in 2010. What is clear is that it will be difficult to maintain prices in the face of further increases to construction costs.
However, any slump in demand will also make it very difficult to raise prices to offset the increased costs of construction.
explained the Director of Property Report.