Where Most Construction Is Happening in Montevideo (2026): Areas and Risks

INGAR · · Investment

Where Most Construction Is Happening in Montevideo (2026): Areas and Risks

In 30 Seconds

Montevideo has 326 new Promoted Housing (PH) projects in 2025 alone — an all-time record that brings the cumulative total to over 2,110 projects. Cordón accounts for 27% of that new construction. La Blanqueada, Tres Cruces, Centro, and Aguada round out the top 5. But building a lot is not the same as building well: Cordón already accumulates 7,755 published listings, and La Blanqueada has 5,401. The oversupply of studio apartments is real and measurable.

In this article you'll find hard data on where construction is taking place, why, which corridors are becoming saturated, and which are just getting started. If you're considering buying new construction or investing in a pre-construction project, this gives you the context you need before signing.

Before continuing, it's worth having the fundamentals clear:

1) The New Construction Map of Montevideo: Where It Concentrates

The distribution of new construction in Montevideo is not uniform. There are areas where you can't walk three blocks without running into a crane, and others where the last significant construction was in the '90s. That disparity is not coincidental: it responds to a combination of regulations, tax incentives, land availability, and demand.

Data on PH projects (the most reliable source because each project is registered with the MEF) shows a clear concentration:

Area % of new PH projects Published listings (accumulated stock) Dominant typology Signal
Cordón ~27% 7,755 Studios and 1-bedroom Advanced saturation
Tres Cruces ~12% 3,200+ Studios and 1-bedroom High competition
La Blanqueada ~10% 5,401 Studios and 1-bedroom Advanced saturation
Centro ~8% 2,800+ Mix of studio/1-bed with some 2-bedroom Sustained growth
Barrio Sur ~6% 1,900+ Mix of studio/1-bed, some premium In development
Aguada ~5% 1,400+ Studios and 1-bedroom Emerging with potential
Goes / Reducto ~3% 800+ Mix, more 2-bedroom than PH average Emerging frontier
Pocitos / Buceo / Puerto ~4% 6,500+ (historical stock) 2-bed/3-bed, premium Little new PH construction, large existing stock

One thing stands out: the areas with the most new construction are not the most expensive. They combine still-accessible land with PH benefits and good connectivity. Pocitos and Buceo have a lot of published stock, but relatively little new construction because available lots are scarce and expensive, which limits project economics.

2) Why Building Happens There and Not Elsewhere

The obvious question: if Cordón already has 7,755 listings, why do they keep building? The answer has several layers.

Promoted Housing Tax Benefits

The PH framework (Law 18,795) offers VAT exemptions on construction, income tax (IRPF) exemptions on rental income for 10 years, and Net Worth Tax exemptions. For the developer, this can mean savings of 20–25% on costs. The problem is that the benefit applies in zones defined by the MVOT, and those zones coincide with Montevideo's central corridor — exactly where most construction is already concentrated.

Result: the regulation amplifies concentration rather than dispersing it.

Land Availability

Cordón, Tres Cruces, and La Blanqueada have something Pocitos doesn't: lots with low-rise buildings (houses, workshops, warehouses) that can be demolished and replaced by 8–12-story towers. On the coast, available land is minimal, occupied by buildings that won't be torn down, or subject to height restrictions.

Zoning and Permitted Heights

The Intendencia de Montevideo's regulations define maximum heights, setbacks, and floor area ratios (FAR) by zone. The corridors along 18 de Julio, 8 de Octubre, and Bulevar Artigas have profiles that allow greater height, making them attractive for large-scale projects. On these main avenues, regulations permit densities that would be impossible three blocks in.

Genuine Demand (With Caveats)

Cordón and La Blanqueada have real demand: students, young professionals, single people seeking proximity to the University, hospitals, and offices. But "real demand" doesn't mean "infinite demand." The question isn't whether there's demand, but whether supply has already exceeded it.

3) The Three Corridors That Define New Construction

If you look at a map of Montevideo with PH projects marked, three clear lines emerge. It's no coincidence: they are the city's historic road corridors.

18 de Julio Corridor (and extension via 8 de Octubre)

The main axis. It starts at Plaza Independencia (Centro), crosses Cordón, reaches Tres Cruces, and extends as 8 de Octubre toward La Blanqueada, Unión, and beyond. This corridor has the highest density of PH projects in the country. The logic is simple: mass public transit (all lines pass through here), walkable services, and zoning that allows height.

The problem is that it also concentrates the highest competition. A new studio in Cordón on 18 de Julio competes with 50 other new studios on the same or next block. That pressures prices and stretches absorption times.

Bulevar Artigas Corridor

The second axis runs north to south, crossing Tres Cruces and Parque Batlle and connecting to the coast. Bulevar Artigas has generous height allowances and good connectivity. New construction here tends to be a step up from the pure studio: more 1-bedroom and 2-bedroom units, with more surface area.

Coastal / Rambla Corridor

The coast (Pocitos, Buceo, Punta Carretas, Puerto del Buceo) has little new PH construction because lots are scarce and construction costs rise sharply. What exists is premium: 2-bedroom and 3-bedroom projects with amenities, aimed at a buyer who doesn't scrutinize the price per m² as closely. Here the risk is not oversupply but high entry price and significant common charges.

To understand how amenities affect your monthly costs:

4) The Studio Problem: 61% of PH Supply Is Studios or 1-Bedroom

This is the most uncomfortable data point in Uruguay's new construction market: 61% of PH units are studios or 1-bedroom apartments. The reason is purely economic. For the developer, a 30 m² studio with PH benefits has a low ticket price (USD 80,000–120,000), proportional construction costs, and a willing buyer/investor. Multiply that by 40 units in a building and the project works financially.

But on the demand side, what people actually need to live (not invest) is 2 bedrooms. A young couple, a single parent, a professional working from home — all need more than 30 m². And the supply of 2-bedroom PH units is proportionally lower.

What does this generate? A mismatch between supply and real demand:

  • Studios: massive supply, primarily investor-driven demand (to rent out). If rental returns fall, investor flow slows and studios are left without buyers.
  • 1-bedroom: the middle ground. Works for living alone, but tight for two. Competes with the large studio below and the small 2-bedroom above.
  • 2-bedroom: genuine demand for housing, but limited PH supply. Available units sell faster and hold their price better.

The investor buying a studio in Cordón today isn't necessarily doing something wrong, but they need to know they're buying in the highest-competition segment, in the highest-competition area. That demands buying well: good price, good location within the area, and a realistic profitability analysis.

5) The Expansion to Canelones: Ciudad de la Costa as a Release Valve

A data point that doesn't appear if you only look at Montevideo: Canelones went from representing 17% of PH projects to nearly 28%. And the vast majority of that expansion is in Ciudad de la Costa.

Why? Because developers found there what had run out in Montevideo: large, inexpensive lots with permissive regulations, and growing demand from young families prioritizing space and greenery over proximity to Centro.

Ciudad de la Costa offers a different profile from Montevideo's central corridor:

  • Larger units (more 2-bedroom and 3-bedroom, fewer studios)
  • Lower prices per m²
  • Target audience: families with cars, working remotely or semi-remotely
  • Less competition from existing stock

The risk here is different: car dependency (public transport is limited), services still developing, and an open question about what happens to demand if the remote work trend reverses.

But the movement is real and sustained. Canelones went from being a marginal destination for PH to representing almost a third of the total. That tells you something about the limits of the "everything in Cordón" model.

6) Oversupply: How to Measure It With Real Data

The word "oversupply" is used a lot and measured very little. Here is a concrete framework for evaluating it.

Indicator 1: Published Listings vs. Transactions

If an area has 7,755 published listings (Cordón) and monthly transactions are a small fraction of that number, there is a stock oversupply. This doesn't mean nobody is buying: it means the time to sell lengthens, which pressures prices.

Indicator 2: New Projects vs. Existing Stock

When an area already has thousands of published units and new projects keep entering, each new project competes with the previous one. In Cordón, every quarter brings projects adding hundreds of units to the market. Is demand absorbing all of that? Absorption timelines suggest not at the rate it enters.

Indicator 3: Discounts and Aggressive Financing

When you start seeing developers offering 5–10% discounts for "quick close," interest-free direct financing, or throwing in appliances and furniture, it's a signal that the market isn't absorbing supply at list price. This is already visible in some projects in Cordón and La Blanqueada.

Indicator 4: Compressed Rental Yield

If rental supply grows faster than tenant demand, rents don't rise (or fall), and the investor's yield drops. A studio that yielded 6% gross three years ago may be yielding 4.5% today if the rent has stagnated but the purchase price has risen.

Area Oversupply Alert Level Rationale
Cordón High 7,755 listings, 27% of all PH, visible discounts
La Blanqueada High 5,401 listings, heavy new construction entering
Tres Cruces Medium-High High PH concentration, but better absorption due to location
Centro Medium High stock but use conversion (office → housing)
Barrio Sur Medium-Low More recent development, less stock accumulation
Aguada Low Few projects yet, appreciation potential
Goes / Reducto Low Early stage, little competition, accessible prices
Ciudad de la Costa Medium Accelerated growth but different demand (families)

7) Emerging Areas: Where the Opportunity May Lie

If the investment thesis is "buy where construction is going to happen, not where it's already been overdone," there are three areas worth watching.

Goes

Goes is a neighborhood that has been in slow transition for years. It has a mixed urban profile (houses, shops, a few low-rise buildings), good connectivity (it's on 8 de Octubre and close to Bulevar Artigas), and land prices still accessible. The first PH projects are already appearing, but we're far from Cordón's density.

The gentrification signal is there: bars, cultural spaces, and food venues are appearing that didn't exist before. The retail sector is renewing. That usually anticipates a shift in the residential profile.

The risk: Goes still has areas with perceived security issues. That limits the pace of transformation. But if the trend holds (and price pressure in Cordón pushes demand outward), Goes could be one of the areas with the highest appreciation over the next 5 years.

Reducto and Brazo Oriental

These neighborhoods share a border with Goes and La Blanqueada/Tres Cruces. They have the advantage of being "next to" consolidated areas but with significantly lower land prices. The first developer moves are already visible: land purchases, feasibility consultations with the Intendencia.

The typical Montevideo pattern is that new construction expands in rings from the center: first Cordón, then Tres Cruces, then La Blanqueada, and now reaching Goes, Reducto, and Brazo Oriental. The investor who understood that 10 years ago in Cordón captured the appreciation. The question is whether the same pattern repeats further north.

Aguada

Aguada has a privileged geographic position: between Centro, Cordón, and the port, with direct access to the Rambla. The presence of institutional buildings (Antel Arena, government offices) gives it a flow of people that other peripheral neighborhoods lack.

The PH projects arriving in Aguada are still few (around 5% of the total), meaning there's no stock accumulation like in Cordón. If the trend confirms, those who buy early will face less competition when they want to sell or rent.

8) How New Construction Impacts Existing Properties

New construction doesn't exist in a vacuum. Every new building that goes up changes the surrounding neighborhood — for better or worse.

Positive Effect: Urban Renewal

When a neighborhood receives new construction, sidewalks improve (the developer must comply with regulations), commerce in the area renews (new residents bring purchasing power), and the general perception of the neighborhood rises. This can appreciate nearby existing properties, even older ones.

Negative Effect: Direct Competition

A 2-bedroom apartment from the 1980s loses appeal when a new building with a gym, coworking space, and a balcony with a grill opens next door. The buyer or tenant who could have chosen the used unit now compares it with the new one, and the used unit must adjust its price. In areas with heavy new construction, existing buildings may lose relative value.

Mixed Effect: Densification

More buildings = more people = more traffic, less parking, more pressure on infrastructure (sewage, electricity). This can generate neighborhood resistance and real coexistence problems. Cordón already experiences it: streets not designed for current density.

For further reading:

9) What to Check Before Buying New Construction in a "Hot" Area

If you've already decided you want to buy in an area with heavy new construction, these are the filters you should apply:

a) Count Projects Within 5 Blocks

If you find more than 3 new projects in the sales or construction phase within a 5-block radius, you're in a saturated area. That doesn't automatically disqualify it, but you need to know that your unit will compete with dozens of similar ones when you try to sell or rent.

b) Compare Price per m² With Neighboring Projects

In a saturated area, prices should reflect competition. If a project is asking 15% more than the area average without a clear difference (better location, better finishes, better amenities), it's probably overvalued. Use real comparables, not the developer's price list.

c) Ask How Many Units Have Already Sold

A project that has sold 30% of units 18 months after launch has a demand problem. One that sold 80% off-plan has real traction. The percentage of sales is the best indicator of whether the market validates that project.

d) Look at Typology Closely

A studio in Cordón competes with thousands of others. A 2-bedroom with a balcony and grill in the same area has less competition. Within the same area, typology defines your level of future competition.

e) Evaluate Profitability With Current Numbers, Not Projections

The developer will tell you gross profitability is 6–7%. You do the math with actual rents for similar units in the area, discounting vacancy (at least 1 month per year), common charges, taxes, and maintenance. The real net yield is usually 2–3 percentage points below what you're told.

10) The Big Picture: Where Construction Is Happening Today Tells You Where Prices Are Heading

The data tells a fairly clear story:

  1. The central corridor (Cordón–Tres Cruces–La Blanqueada) is mature. There's still demand, but supply has caught up and in some segments exceeded it. Future returns will be lower than past ones. It's not a bad place to buy, but you need to buy well and in the right typology.
  2. The coast (Pocitos, Buceo) has little new PH construction but lots of existing stock. Here the game is different: less competition from new projects, but high entry prices and common charges that can be significant.
  3. Emerging areas (Goes, Aguada, Reducto, Brazo Oriental) are at the stage Cordón was at 8–10 years ago. Lower stock, less competition, lower prices, but also more uncertainty about timing. Those who buy early capture the appreciation but need to endure the neighborhood's transition.
  4. Ciudad de la Costa absorbs demand that Montevideo can no longer satisfy in terms of space. It's a different market with different rules, but it's growing rapidly and already represents nearly a third of PH.
  5. The studio problem is structural. As long as 61% of PH supply is studios and 1-bedroom units, there will be competitive pressure in that segment. The investor who can stretch their budget to a well-located 2-bedroom will likely have a better medium-term outlook.

The conclusion isn't that you shouldn't buy new construction. It's that you need to buy with information, not with the developer's brochure. Location matters, but typology matters just as much. And where each area is in its cycle is what determines whether you're buying an opportunity or buying competition.

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