In Uruguay, at Home on the Beach, and in the Country

By SUE CHESTER

Published: August 19, 2008

PUNTA DEL ESTE, Uruguay

Hollis Hedrich’s fascination with Uruguay began on a train from Amsterdam to Denmark, during a conversation with a Uruguayan about his homeland. "He described it,” Mr. Hedrich said, "and I thought it sounded like a really great place and that maybe I would go there someday.”

Five years later, in 2003, he took a year off from his job as a financial planner and was in Argentina when he remembered the conversation. He headed across the River Plate to Punta del Este, a popular summer area. Six weeks later he was engaged to a Uruguayan woman, and deciding whether to make a life in the United States or Uruguay.

"After weighing up the options and looking at the pluses and minuses, it made more sense for me to move here,” he said. "There’s also a great quality of life with cleaner air, clean ocean, great food, nice people and it’s extremely safe.” So in 2004, Mr. Hedrich sold his property in California and began house hunting with his wife-to-be, Raquel.

Punta del Este is a city, but also a string of neighborhoods that stretch 80 kilometers (50 miles). The region has a permanent population of around 160,000, swelling to 400,000 in the high season. Despite Punta’s expensive reputation, real estate prices vary enormously. It is possible to buy a one-bedroom apartment for $70,000 on the Peninsular, in Punta’s city center, or to spend $7.5 million for 1,637 square meters (17,620 square feet) , including a 373-cubic-meter (13,172-cubic-foot) rooftop pool, in the new Acqua development on the sea front at La Brava. (High-end real estate prices in Punta are commonly listed in American dollars.)

Among the area’s most exclusive spots are La Barra, Punta Piedras and José Ignacio. Mrs. Hedrich was living in La Barra when the couple met. The area proved to be Mr. Hedrich’s personal favorite. "I like the beaches and beach-town feel and the artistic flavor of the community, which is a lot like Laguna Beach,” said Mr. Hedrich, a former Los Angeles resident. "As a Californian I felt really comfortable here. The water temperature and climate are almost identical.”

The couple decided they wanted a place close to the beach with an ocean view. They found a place ideally situated but needing renovation. They thought the work would take two months; it turned out that was optimistic.

"It took nine months instead of the two,” Mr. Hedrich said. "We weren’t planning on gutting the entire place. We didn’t knock it down completely because we liked the floor plan and it’s much easier to renovate a place than to build from scratch here, as there’s less planning hoops to jump through.”

Typical of La Barra’s modern homes, the 128-square-meter (1,377-square-foot) house, which stands on 210 square meters (2,260 square feet) of land, has a large living/dining area, a kitchen, four bedrooms, three baths, a terrace, a carport and a large balcony. Mr. Hedrich did not want to disclose how much they have spent on the house, but Terramar, a local real estate company, estimates it is worth about $500,000.

There are no official statistics on the number of foreign sales in Uruguay. But the increase in sales has been driven, at least in part, by government policies offering tax incentives to foreigners living and investing in the country. Also, expatriates do not have to pay local taxes on income received from abroad.

The couple now have a 3-year-old son, and they have invested in a "chakra,” the local term for a small farm. They bought five hectares (12.5 acres) at Pueblo Eden, about 40 kilometers (25 miles) from the coast, and spent the equivalent of $140,000 to build a three-bedroom two-bath house.

Construction was much quicker than in Barra, as they broke ground last October and finished in mid-January. They now spend every weekend at the property, where they keep horses; the Terramar agency valued the spread at about $350,000.

Such farm-style properties have proven particularly popular with foreigners, Mr. Hedrich said. "There are Dutch, South Africans and German who bought near us,” he added. "People come here from all over the world. It’s an exciting place to be.”