Market Report

The most popular properties for foreign buyers continues to be condominiums close to the center of town. In 2008, we are beginning to see more interest in larger houses and properties in the lower valleys around Cuenca. 

At the end of 2008, the international fiancial crisis has had little affect on real estate prices in Ecuador.  A new government program that provides low cost mortgages to citizens who have contributed to the national social security program is a major factor, as is the large number of Ecuadorians returning home from the U.S. and Europe.

Cuenca is undergoing rapid growth and more than two dozen condominium projects are under construction and more are on the drawing board. Despite high level of sales, apartment prices are still very reasonable due to the fact that the market is driven almost entirely by local demand. Costs for new one-bedroom apartments with very nice tile and wood finishings average between $45,000 and $55,000. A new 2-bedroom, 2-bath apartment, costs between $55,000 and $70,000. A new 3-bedroom, 2-bath unit, with spectacular views of the city and mountains, ranges from $70,000 to $85,000. Older apartments, of course, are less expensive. Buyers can realize 15% to 20% savings purchasing in the pre-construction and construction stages of projects compared to the cost of finished new apartments.

The major advantage of condos is that they are easy to resell. Many condo buyers express an interest in purchasing homes or villas in the city or, property outside of town but decide that an in-town "foothold" will allow them more time to make a decision on a larger purchase.

Investors are taking note of Cuenca's tourism boom (officals estimate that numbers are growing 15% to 20% a year, the highest growth rate in Ecuador) and the increased demand for furnished apartments for foreigners who want to stay in the city for an extended period. Demand exceeds capacity during the busy times of year.

Older but very liveable houses in the 1,300 to 2,000 square-foot range run from $55,000 to $85,000. Many of these have small enclosed gardens and secure parking.

Probably the best bargains in Cuenca today are for larger homes. Beautifully landscaped, finely detailed 3,000 to 5,000 square-foot houses, in Cuenca 's most desirable neighborhoods, can be had for less than $250,000. Many of the homes have guest houses and other out buildings. Similar properties in the U.S. would cost three to four times more. There are also a number of larger homes with acreage available outside of Cuenca. Although the market for larger properties has been sluggish in recent years, the large-house sector seems poised for a rebound. The downside of larger homes is mainentance and upkeep and expenses for caretakers.

For those who want to live in the country but be within a short driving distance of Cuenca, Yunguilla valley, southwest of the city, and the Paute valley, to the east, deserve a close look. Yunguilla is being compared to Vilcabamba because of similarity of weather and terrain. The major difference is that land prices are running about 50% to 75% of those in Vilcabamba.

In general, real estate appreciation in Cueana in the period from 2005 through the first half of 2008, was about 10% per year. Although it will affect all new construction, increases in the cost of construction materials due to the devaluation of the U.S. dollar is having the biggest impact on prices of new condos. As of mid-2008, new units were selling for about 10% more than at the end of 2007. Although the world economic crisis has sent commodity prices lower, construction prices at the end of 2008 had yet to benefit in most of Latin America.

The new Ecuadorian constitution, passed by a 65% majority in September 2008, makes no changes to the rights of foreigners to own property. Private property rights have not been changed

Please keep in mind that prices are averages and the cost of particular properties will vary. From 2004 through 2008 there was a strong uptick in real estate purchases by non-Ecuadorians as well as Ecuadorians returning to the country from the U.S. and Europe.