Blog · 2024-02-27

Investing in Paraguayan real estate in 2025: opportunities and outlook

Paraguay is drawing more and more attention from foreigners each year as an excellent Plan B: greater freedom to travel the world, the ability to register companies under a second citizenship, and much more. Interest in the country has always existed, but it has grown several times over recently amid the tense global climate.

Many of those relocating are focused on obtaining Paraguayan citizenship, but there are also those studying the country's property market not only to live there, but as a profitable investment. The real estate market in the capital, Asuncion, offers substantial opportunities to grow your capital.

Paraguay's economic situation

Over the past decade, Paraguay has enjoyed steady, sustained economic growth. In 2023, GDP grew by 4.5% - a figure higher than in North America or Europe. The country also carries a small external debt. Paraguay exports more than it imports, which is one of the most important indicators of its economic health. Exports are dominated by meat and agricultural produce.

Key drivers of the Asuncion property market

Asuncion is a growing city of roughly 600,000 people. A square metre in the city centre costs between $1,400 and $2,000 - objectively inexpensive for first-class property in a capital city.

Paraguayans' purchasing power is low, so only a small share of the middle class and the wealthy can afford housing in Asuncion's best districts.

The main factors shaping the market

• Foreign demand for property. Paraguay is known for its stable economy, so Argentines and Brazilians, for example, invest heavily in Asuncion real estate, viewing it as a safe haven.
• Political stability. Paraguay's stable political environment has been one of the key drivers of its economic growth over recent decades. The country offers favourable conditions for small business and low taxes, and preserving that reputation matters greatly. As long as Paraguay remains stable, its property market will continue to perform strongly.
• Migration. More people leave than arrive - yet for Paraguay this is a positive factor. Why? Many affluent foreigners move to Paraguay, typically fleeing politically unstable countries in search of greater freedom.

The best districts to invest in Asuncion

It is far more profitable to focus on upscale districts, where property remains affordable and tenants are more solvent. Here are some Asuncion neighbourhoods worth considering.

• Districts with shopping centres. These include Recoleta, Villa Morra and Carmelitas - home to a large number of modern malls, hospitals, embassies and companies, with everything needed for a comfortable life. This is where the money lives. If you want affluent tenants, these are the best districts to invest in.
• Centro (the historic centre). A run-down district with many government buildings and underdeveloped infrastructure. Buying here can be a worthwhile long-term bet for those who believe that, as the city develops and the country grows wealthier, more money will flow into the historic centre.
• Las Mercedes. A middle-class district sitting between the historic centre and the wealthy neighbourhoods to the east of the city. It is a decent place to live, but very affluent tenants are unlikely to want to settle here.
• Perseverancia. A new district being built up with shopping centres, modern residential buildings, restaurants and more. This area is set to develop rapidly, so it is worth watching if you want to invest in Paraguayan real estate.

Rental yields in Asuncion

Tourist traffic in Paraguay is low, so property is best let on long-term contracts. As a rule, you can expect a yield of 4-6%.

How to profit from Paraguayan property

It pays to invest in developments at the early construction stage rather than in finished apartments. The margin you gain on resale can reach 50%, and those funds can then be reinvested in property once again.

Property taxes in Paraguay

Taxes on rental income vary by status: residents pay 10%, while non-residents pay between 15% and 50%. When selling property in Paraguay, residency matters - residents pay just 10% on capital gains, whereas non-residents pay 30%.

Why invest in Asuncion real estate

These are safe investments far from any geopolitical hotspots, offering slow but steady capital appreciation.

What you should know before buying a home in Asuncion

It is important to choose property that will be in high demand - easy to sell or profitable to rent out.

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