Investment In Farming In Uruguay

Investing in Land
Traditionally, the purchase of land has been considered a very good investment in Uruguay and, importantly, a very safe one. The value of the land in Uruguay is usually lower than in other countries of the MERCOSUR and Chile.

A number of important factors have to be taken into account for investing in farming in Uruguay, namely:

  1. The quality of the land
    Every farm in the country has been assigned a productivity index (CONEAT) relative to an average index of 100. This index is based on the quality of soils, topography, and reflects the estimated productivity of the land.

  2. Location
    Independent of the quality of the soils, farms located towards the western part of the country (closer to the Argentinian border), in the area near Montevideo, and closer to Punta del Este in the Southeast (the most important tourism centre in the MERCOSUR) also have higher per hectare prices.

  3. Facilities
    Access roads to farms are of great importance, as is proximity to the main highways.

  4. Availability of electricity and phone services.

  5. On-farm Facilities:quality of fencing, main houses, barns and yards for livestock.

  6. Re-sale prospects: This is obviously related to the previous points, but the size of the farm can influence the prospects and the number of potential buyers.
The evolution of land price in Uruguay
Since 1982, land prices in Uruguay have shown a steady and nearly continuous increase.

Between 1983 and 1998, land prices rose at a rate of nearly 3% per year, while between 1983 and 2006, the increase was 5.5 % per annum. By the end of 2002 prices for land reached the lowest values, but after that financial crisis, prices have increased very markedly.

Foreign investors have permanently showed interest in purchasing land in Uruguay.