The Real Foundations of a Booming Market: Beyond the Alarmist Narrative

Asunción's urban growth responds to a specific economic logic, with solid regulatory frameworks and an investment profile that contradicts external prejudices.

The recent article in Argentina's La Nación newspaper, titled "Skyscrapers, Housing Crisis, and Suspicions of Money Laundering: Argentine Money Fueling a Development Boom in Paraguay," offers an alarmist interpretation of the Paraguayan real estate market, anchored more in impressions than data. From a simplified, external perspective, the article attempts to draw a parallel between urban growth, capital flows, and suspicious practices. However, a deeper examination of the phenomenon reveals a much more complex and, above all, more professionalized reality than suggested.

Paraguay has not only made significant progress in financial regulation and anti-money laundering, but also boasts one of the lowest risk indices in the region. According to the Basel AML Index—which compiles information from organizations such as the FATF, the World Bank, and Transparency International—Paraguay recorded a risk score of 5 in 2024, down from 5.07 the previous year, consolidating a downward trend since 2017. Within the Latin American context, the country is among the best positioned in this indicator, which categorically refutes any suggestion of institutional laxity or permissiveness.

Regulatory developments have been dramatic. Although the real estate sector was considered a regulated entity since 2007, it wasn't until SEPRELAD Resolution 94/2019 that it was precisely defined who was required to comply with the prevention requirements: real estate agencies, brokers, developers, and commission agents. This regulation was expanded in an even more structured manner in 2020, with Resolution 201, which introduced requirements for compliance manuals, audits, KYC policies, and mandatory reporting. Since then, the sector has become heavily supervised, with a sanctions regime that has particularly affected those who failed to quickly adapt to these requirements. Today, real estate agencies are the second largest group of regulated entities in SEPRELAD, behind only non-profit organizations, confirming the degree of formalization and oversight governing this activity.

Given this, the lightheartedness with which judgments are passed in the Argentine article is surprising. One particularly striking statement suggests the existence of a real estate bubble in Asunción. This isn't the first time its imminence has been announced: similar predictions have circulated since 2011, all refuted by the sustained—though not uncontrolled—development of the market. Growth in Asunción is logical and well-founded. A clear example is the pre-sale capital gains model. Many developers sell units at below-market values, and the investor makes a profit upon delivery. This appreciation margin is not the product of a speculative bubble, but rather a logical scheme for raising capital during the construction process. Furthermore, if the area where construction is carried out improves its infrastructure, services, and connectivity, that capital continues to grow.

In fact, when speaking with numerous real estate agents in Asunción, the general perception is that, while there is a supply of finished apartments for both sale and rent, it is not as abundant or as easy to find as one might assume from the outside. Many properties with good locations, attractive designs, and reasonable prices tend to be snapped up quickly, especially in areas with established infrastructure or where demand is concentrated among young professionals, couples, or foreigners looking to live close to their business centers. This also explains why some new buildings show high turnover or even waiting lists for certain types.

On the other hand, not all real estate offerings are performing the same. There are luxury buildings that still have units available even years after completion, which doesn't necessarily reflect a general structural oversupply, but rather a naturally more limited demand. The luxury segment involves larger square footage apartments, with above-average prices per square meter, and whose potential clientele—local or international upper class—tends to prefer single-family homes. In contrast, semi-luxury buildings, which are better located, have more compact, well-designed units, and offer a more competitive price-performance ratio, show high occupancy rates and even active resale.

But what probably distorts external perception the most is the phenomenon of seemingly unoccupied apartments at night. At first glance, a building with only a few lights on may appear empty, but that observation doesn't stand up to serious analysis. Many homes are actually occupied, but the light on in the living room or master bedroom isn't always visible from the street. Blackout curtains, mirrored glass, covered balconies, or interiors facing internal patios prevent such direct observation. In other cases, the units are intended for temporary rentals or are in the normal occupancy phase, especially in newly completed buildings.

The profile of foreign buyers also changes the interpretation. Many Argentines, Bolivians, and Brazilians buy apartments in Paraguay as a capital reserve, given the macroeconomic conditions in their countries of origin. This does not imply disuse or unproductivity, but rather a logic of asset diversification. Furthermore, many of these apartments are rented through platforms such as Airbnb or Booking.com, with variable turnover depending on the season, or are simply paused between rental contracts. In a context of population growth and urbanization, temporary vacancy cannot be interpreted as synonymous with a structural market failure.

The Argentine journalist also omits another crucial fact: the assets seized in connection with money laundering in Paraguay are mostly houses, ranches, vacant lots, or rural properties. According to SENABICO's public auction records, only two apartments located in older buildings in the city center have been auctioned in recent years. The real estate market in the universe of seized assets is marginal, which undermines the theory that high-rise developments in Asunción are the preferred vehicle for illicit operations.

Instead of continuing to reproduce external perspectives based on generalizations or prejudices, it's time to engage in a more rigorous conversation about Asunción's urban future. The Paraguayan real estate market isn't perfect, but it's far from a Latin American anomaly. Its growth is driven by clear fundamentals: a stable macroeconomy, a low tax burden, controlled inflation, an expanding middle class, and a developer ecosystem that—with nuances—has increasingly professionalized its offering.

Paraguay is not a land of speculators. It is a land of opportunity, yes, but also of rules that have been consolidated, with a more active state and a private sector that, in many cases, seeks to do things right. And if there's one thing the sector needs, it isn't unfounded warnings, but more serious analysis, more data, and more quality economic journalism.