Punta del Este has long been the see and be seen hotspot in South America. In no other beach area do so many of the rich and famous from multiple countries gather to take a break from their roles as captains of industry,  fashion, and entertainment. We just posted a detailed round-up of real estate in Punta del Este, Uruguay.

For a long time those numbers were limited, but as much of the world has gotten richer—especially in the bottom half of South America—the number of people wanting to stake out their spot in this location has taken off. That has made a hot real estate market even hotter. Numbers are bandied about like “$5 million in sales per day” (I’ve seen higher reports in some magazines) and “sales up 110% since 2010.”

We’ve seen this kind of fast appreciation before in Latin America and often it hasn’t ended well. In some places prices have gone through a correction (Panama City, Roatan, Ambergris), in others they’ve fallen off a cliff (many coastal Pacific retirement communities). The difference in Punta del Este is that much of the new buyer money is not coming from the U.S., Canada, or even Europe. It’s coming from increasingly wealthier Brazilians, Chileans, and Argentines who look at real estate as their only good inflation hedge.

So while this market has some typical signs of a bubble, it doesn’t look like it could pop anytime soon. Many of the prime beach properties in Jose Ignacio are owned by old money families with no intention to sell. Even if you’ve got a few million dollars to spend, your options depend on knowing someone in the know who can access the unlisted listings. A large number of the buyers are from developing countries on the rise. Uruguay’s residency, tax, and banking laws are some of the most attractive in the world. In an area where every house and villa is occupied in high season, the rental market is excellent.

And what’s the alternative? Brazil may have better beaches, but there’s nowhere else on the continent where so many power brokers and tastemakers (and their families of course) mix it up on vacation.

See our full story on luxury real estate in Punta del Este.