Paraguay’s real estate market in 2026: low entry, rising rents, and the emergence of new segments

In 2026, Paraguay continues to be one of the most undervalued real estate markets globally. Compared to neighboring South American countries, the entry threshold remains very low, while the market has shown steady growth for several years. This growth is gradual rather than volatile, and this stability is increasingly attracting private investors, according to PYG Real Estate.

Over the past three years, housing prices in the country have grown by an average of 7–10% annually. The year 2025 was particularly active: in some areas of the capital, growth approached 10%, and in certain projects exceeded this level. In 2026, the trend continues but has become more selective, with new developments and liquid assets in central districts appreciating the fastest.

A key feature of Paraguay is the gap between segments. Older housing stock remains inexpensive and grows slowly, while modern residential complexes are effectively forming a new market with different pricing and a different audience.

The country’s capital, Asunción, remains the primary market center. This is where most demand is concentrated, new developments are built, and the rental sector is expanding. In 2026, housing prices in Asunción are still low by international standards: economy-class apartments in older buildings sell for $700–1,000 per square meter, while similar units in new buildings cost $900–1,300. The mid-range segment is priced between $1,300–1,800, and modern business-class projects reach $1,800–2,400. Luxury real estate in Villa Morra, Recoleta, and Las Lomas has reached $2,500–3,500.

At the same time, absolute apartment prices remain affordable. A studio in the capital can be purchased for $45,000–75,000 (outskirts and center respectively), a one-bedroom apartment for $60,000–110,000, and two-bedroom units for $90,000–180,000. Even in the premium segment, the entry price typically starts at $200,000, which is significantly lower than similar offers in Brazil or Argentina.

The second most important market is Ciudad del Este, a border city whose economy largely depends on trade with Brazil. Prices here are lower than in the capital: from $600–900 per square meter in the basic segment to $1,200–1,600 in new residential complexes. However, this market is considered more volatile, as housing demand is directly linked to economic activity in the border area. During periods of increased trade, both rents and prices grow faster than the national average.

Encarnación occupies a special place as a tourism-oriented city located on the Paraná River. The real estate market here is driven by domestic tourism and visitors from neighboring Argentina. Housing prices range from $800–1,600 per square meter and can reach $1,800 in new projects. A key feature of Encarnación is strong seasonality: during peak tourist months, rental demand rises sharply, making it attractive for short-term investments.

In 2026, the rental sector in Paraguay is growing faster than the sales market. In Asunción, studios rent for $250–400 per month, one-bedroom apartments for $350–650, and two-bedroom units for $500–900. Higher-quality housing in new buildings and central areas can cost significantly more, especially if fully furnished.

Rental price growth has accelerated in recent years. While it was around 6–8% in 2023, it reached 10–12% in 2025 and remains at a similar level in 2026. The main drivers are the inflow of foreigners, the growth of remote work, and limited supply of modern apartments. Short-term rentals also put additional pressure on the market by pulling units out of long-term supply.

The short-term rental segment in the capital shows particularly strong growth. The average rate in Asunción is $45–60 per night with occupancy of 55–70%, allowing owners to earn $600–900 per month per unit. In tourist-heavy Encarnación, returns are even higher due to seasonal peaks.

As a result, Paraguay offers one of the most attractive yield models in the region. Long-term rentals generate around 6–9% annually, while short-term rentals can reach 8–12% or more. At the same time, the market remains immature: liquidity is lower than in developed countries, and property sales may take longer.

Paraguay’s real estate market in 2026 cannot be viewed as a single entity – it is effectively divided into several parallel segments, each with its own rules and dynamics.

New developments are the main growth driver. In Asunción, a full-fledged market of modern residential complexes with infrastructure – pools, security, parking, and leisure areas – is emerging. These properties target the middle class and foreign buyers.

Prices in this segment are already significantly above the national average. In 2026:

• basic new projects: $900–1,300 per m²

• quality mid-range: $1,300–1,800

• modern business-class complexes: $1,800–2,400

At the construction stage, prices are 10–25% lower, making early-stage investment one of the most popular strategies. Investors can lock in value growth before project completion.

Price growth in new developments:

• average 8–12% per year

• up to 15% in high-demand projects

The secondary housing stock remains the cheapest segment but also the most problematic in terms of growth.

Prices:

• $700–1,000 per m² in the capital

• $500–800 in regions

Key features:

• often outdated buildings

• lack of infrastructure

• low interest from foreign buyers

This segment is mainly used for budget investments focused on rental income. Price growth rarely exceeds 5–7% annually.

Economy housing

This is the largest segment, focused on local residents.

Parameters:

• apartments: $40,000–80,000

• rent: $250–450

Yield:

• 7–9% annually

Main advantage – stable demand. Main drawback – limited capital growth.

Mid-range segment

The most balanced part of the market, combining growth and yield.

Parameters:

• apartments: $80,000–180,000

• rent: $400–800

Yield:

• 6–8% annually

This is where most foreign investor interest is concentrated.

Luxury real estate

The luxury segment is concentrated in Villa Morra, Recoleta, and Las Lomas in Asunción.

Prices:

• $2,500–3,500 per m²

• properties: $200,000–800,000

Rent:

• $1,200–3,000 per month

Yield:

• 5–7%

The main feature is limited supply. This segment grows more slowly but remains stable.

The hotel real estate segment in Paraguay is still at an early stage but is considered one of the most promising.

This does not involve buying entire hotels but individual units – rooms or apartments in aparthotels and condo hotels. Management is handled by an operator, while the investor receives rental income.

Unit prices

• basic units: $50,000–80,000

• standard apartments: $80,000–140,000

• premium projects: $150,000–250,000

Price per square meter is usually higher than residential:

• $1,800–3,000 per m²

Main income models:

1. Fixed return

Investors receive 6–8% annually regardless of occupancy.

2. Rental income

Investors receive a share of actual profits:

• average yield: 8–12%

• up to 13–14% in successful projects

3. Hybrid

A minimum guaranteed return plus a share of profits.

Actual performance

In Asunción:

• average occupancy: 60–75%

• average rate: $50–80 per night

• net yield: 8–11%

In Encarnación:

• strong seasonality

• occupancy close to 90% during peak months

• annual yield may exceed 12%

Segment risks

Despite high returns, the market is not yet fully formed:

• limited number of projects and operators

• lack of long-term statistics

• dependence on tourism

• differences in management quality

Nevertheless, this segment shows the fastest growth, combining two trends – tourism development and the popularity of short-term rentals.

By 2026, Paraguay’s real estate market is no longer “hidden” and is gradually entering the international stage. New developments are shaping a new pricing reality, rental growth is outpacing sales, and hotel real estate is becoming a separate investment direction.

At the same time, the country retains its key advantage – a low entry threshold. Combined with yields of up to 10–12% annually, this makes Paraguay one of the most attractive yet still undervalued markets for private investors, according to experts at International Investment.