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In Ecuador, real estate prices sometimes don't make sense. They fluctuate. In about 2000, you could get a house with several beachfront acres on the Pacific Ocean for under $20,000, but those days are gone. Ecuador adopted the U.S. Dollar as their only currency in 2001 , and though prices have been up and down since then, they have never been that low again.
Today it depends on what you're looking for. To be more precise, prices are low if you are looking for residential real estate. They are high if you are looking as an investor. In fact, it seems the only way landlords make a decent return on real estate in Ecuador is by selling their property at a profit.
My wife and I traveled to Riobamba a couple years ago, we loved the changes it was undergoing. An Andes Mountains city of 80,000, it is alive with new businesses and new developments. Condos in particular were going up in and around town. Some really nice two-bedroom ones sold for as little as $26,000. Then there were the rental properties.
One we looked at was a three-unit building for sale for $102,000. That might sound cheap until you hear what the units rented for: $80 per month. You read that correctly. If you're quick with your math, you realize that even with full occupancy and no expenses that represents a return of about 2.8% on the purchase price. Not exciting.
Since that time, prices have come down in many areas. It has taken some time for the people of Ecuador get used to the relative stability of the U.S. Dollar. As inflation ate up the previous currency (the sucre) it made sense to have money in anything other than currency - even real estate with lousy returns. However, even today, the numbers for income property still don't work. As a result you see developments selling condos and homes, but far fewer that are meant to be rented. Avoid investing for income in Ecuadorian real estate, at least for now. Homes are another matter.
Ecuador Real Estate
- Residential Property
Home shopping in Ecuador get's more interesting. The prices are not as low as six years ago, but there are still some great deals. We recently bought a small lot in a walled neighborhood with a guard at the gate, for $3,000. It is a few hundred feet from the Pacific Ocean, in San Vicente.
My wife's grandmother has just finished building home there (this is being written in August of 2007) for us, for another $8,000 or so. The dues (shared) to keep the guards paid run about $10 per month, and utilities are similarly low. Ours is a small lot, and we have a small, simple two-bedroom home, but you can see that the dollar goes farther here.
Near Guayaquil, Ecuador's largest city, new subdivisions are popping up like they did in the fifties and sixties here in the United States. You can get a new three bedroom home for as low as $30,000. Some of these developments have monthly association dues to pay for community swimming pools, but these are small, often less than $30.
There are always differences in culture between countries, and these show up in real estate prices and styles. For example,unlike here in the United States, in Ecuador it is common that the wealthy live low and the poor live up in the hills. Want a great view. Find a neighborhood that is improving up in the hills, and the time may be right for getting great deals.
To live in areas with others from the U.S. and Canada, you will always pay more. An alternative is to learn Spanish and get a better deal on real estate in Ecuador by buying where Ecuadorians buy their homes. One final note: use the services of an attorney for any real estate transaction, to be sure you understand the laws and know what you are getting into.
For more information, see Real Estate In Ecuador on the web site www.EcuadorNow.com. You can also learn more about Ecuador in general there.
Important Note: After years of stable democracy, things are less certain now (Fall 2007). There is some talk that the president (Correa) may take property from foreigners and even steal (I won't use their nice words for this) the second homes of Ecuadorian citizens. I personally wouldn't invest in real estate in Ecuador at this time. - Steve
March 2008: It seems that the rumors of property seizures were just rumors. It seems that Correa realized he was scaring away money, and scaled back his plans for a "new socialism" (as he called it). It is probably safe to invest in Ecuador still, especially in non-sensitive areas.