Market Report

The most popular properties for foreign buyers continue to be condominiums close to the center of town. Through the first half of 2009, condo prices continue to rise modestly despite the recession in much of the world, with Ecuadorians living overseas, primarily in the U.S., Spain and Italy, being the major factor. In 2008, 40% of all sales in Cuenca were to Ecuadorians returning to Cuenca from overseas and Ecuadorians still living abroad but investing in real estate at home.

A new government program that provides low cost mortgages to citizens who have contributed to the national social security program is another major factor in keeping the market strong.

Cuenca is undergoing rapid growth, with more than 15 condominium projects under construction and more are on the drawing board. Despite high level of sales, condo prices are still very reasonable due to the fact that the market is driven almost entirely by Ecuadorian demand. Costs for new two-bedroom apartments with very nice tile and wood finishings average between $50,000 and $60,000. A new 3-bedroom, 2-bath unit, with spectacular views of the city and mountains, ranges from $70,000 to $90,000. Older apartments, of course, are less expensive. Buyers can realize 10% to 15% savings purchasing in the pre-construction and construction stages of projects compared to the cost of finished new apartments. Construction costs, per meter, as of June 2009, were running $700 to $850. By contrast, per meter costs were running between $1,500 and $2,000 in Panama, Costa Rica and Mexico.

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% 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.

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, deserves a close look. Yunguilla is often compared to Vilcabamba because of similarity of weather and terrain. The major difference is that land prices are running about 50% of those in Vilcabamba. Construction prices are also a bargain, with the average cost per foot averaging $30.

In general, real estate appreciation in Cueana in the period from 2005 through 2008, was about 12% per year. The rate has slowed since the beginning of the world-wide recession in mid-2008, with appreciation running between 5% to 10%.

Please keep in mind that prices are averages and the cost of particular properties will vary.