08/01/2025
In July 2024, Moody's increased Paraguay's rating to Baa3, the lowest investable grade. The rating upgrade "reflects a combination of factors, including robust and sustained economic growth, our expectations that the economy has become more resilient to shocks, and a track record of institutional reforms," the agency said in a report.
We can add cheap, green electricity and political stability to this low-tax, business-friendly country. Paraguay is a free-market oasis in the region entrenched in protectionism, high taxes, government regulations, and economic interference.
What will Baa3 mean to investors in the decade ahead?
Reaching the investment grade changes the flow of money. In the new environment, the economy's veins, with capital inflows only from local and regional players, will receive money from more prominent and international institutional investors. After reaching Baa3, institutional investors will go from buying only government bonds to purchasing the second least risky asset class: Real Estate.
Key drivers in the sector until now?
The boom in real estate development in recent years has been driven by money outflows from already expensive real estate markets in the region. Namely, we speak of Panama and Uruguay.
Retail buyers and smaller regional institutional investors from Argentina, Brazil, or Bolivia see Paraguay as a safer store of wealth than their home countries. In the new developments, it is common to hear Portuguese or a Rioplatenese accent of Spanish spoken in Argentina and Uruguay.
Vast immigration to Paraguay from Europe, namely from Germany, escalated after the COVID crisis. Many are staying to live indefinitely or choosing to spend European winters in Paraguay, and many have already discovered the real estate market.
What do the local big developers say?
According to our sources, there is a positive sentiment. Big US funds are expected to be involved in the local real estate market. According to the analysis of one mid-grade developer, prices could double in the next 10 years.
Do you know how we can help?
Whether you are looking to buy one apartment or build an apartment building, we can help. We are uniquely equipped to navigate this environment and help you safely ride your ship to the harbor. We are always looking to secure the best deals for our clients, so you do not buy where the biggest billboard is but rather where the next billboard will be.
You can reach out to us here or at [email protected]
