Paraguay's Luxury Property Boom Defies Gravity—and Logic

Real estate success story or scam? We ask insiders and drill into the data.

The Chacarita neighbourhood sits just a few blocks from downtown Asunción. (Photo: MOPC)

Drive along the Costanera — the riverside esplanade that loops Paraguay’s capital, Asunción — and the contrast is stark.

In the foreground, tumbledown shacks of bare brick and plywood, perched beside polluted streams and flood-prone swamps. Behind them, barely a mile distant, a forest of cranes and skyscrapers, topped with verdant gardens and infinity pools.

It’s perhaps the most striking symbol of the economic transformation gripping Paraguay. Powered by agriculture, services, and construction, the landlocked South American nation’s GDP grew by six percent in 2025: perhaps the fastest of any economy in the Americas except oil-rich Guyana.

And in Asunción neighbourhoods like Manorá, Ycuá Satí, San Jorge, Las Mercedes and Mburucuyá, a select few investors and residents are clearly enjoying the benefits. The names alone of the towering new developments speak to lofty ambitions: El Palacio de Los Patos, SkyTower, Eminent, More, Domus.

Also reshaping the capital’s skyline are the Petra Imperiale — which at 73 floors promises to be one of South America’s tallest buildings when finished in 2029 — and Distrito Perseverancia, an upscale private neighbourhood which occupies roughly five city blocks with boutique stores, a Casa Rica gourmet supermarket, and penthouses worth a reported $700,000.

L-R: Distrito Perseverancia, Petria Imperiale (CGI)

“Today, Asunción is on the up, thanks to the private sector,” said Paraguay’s president, Santiago Pena, at the inauguration of Distrito Perseverancia in November.

“Seeing this magnificent project,” he added, “is to feel that we’re getting closer to the dream of a pleasant, enjoyable, inclusive Asunción that is also the most beautiful capital in Latin America.”

In 2024 alone, Asunción City Hall approved 280 new multi-storey buildings. The tornado of bricks and mortar is reflected in tax receipts from the construction sector, which quadrupled over four years to reach 85 billion guaraníes ($12.6m) in the same year.

Yet beyond the shine of freshly-poured cement, questions hang over Paraguay’s real-estate extravaganza.

Who exactly is buying all these new apartment buildings — some of which are almost entirely empty — and are they really worth the price tag? Is Asunción experiencing a property boom, or a bubble?

How much of the brick dust and scaffolding is covering up dirty money, as narcotraffickers use Paraguay’s lax controls to launder their cash?

And could a backlash be brewing among regular Paraguayans, who increasingly find themselves priced out of a place to live?

A safe haven in bricks

“The market today is pretty diversified,” real-estate advisor Aldo Zarza of Oficina Re/Max Conexión tells The Paraguay Post.

“There are lots of foreigners, from Bolivia, Uruguay, Chile and Argentina, but also plenty of local investors,” he adds, as well as consortia formed of the two.

Under Ley 60/90, Paraguay’s long-standing investment-promotion framework, real estate projects are exempted from taxes on imports and local purchases of machinery, while those worth more than $13m don’t have to pay tax on the first ten years of profits.

Developers who reinvest earnings can further slash their tax bill, as well as enjoying municipal tax perks in Asunción. And a recent update to the investment incentives, Ley 7548/25, explicitly widens tax breaks to cover purchases of raw materials and to benefit local developers alongside foreign investors.

Such freebies go some way to explaining why builders are happily throwing up apartment blocks without guaranteed buyers.

Zarza’s firm estimates a vacancy rate of around 30% of units across the capital’s property market: “If we reached 50%, that would be a bit worrying,” Zarza concedes.

But he explains the low rates of occupancy by pointing to investors who see new-build apartments as a long-term lock-box for their wealth.

“Sometimes they prefer not to rent it out right away, so the price doesn’t fall,” Zarza argues.