El Conquistqdor Francisco de Orellana

El Conquistqdor Francisco de Orellana
The Conquistador who put the Amazaon baisn "on the map"....Francisco Orellana

Monday, October 3, 2011

Flag this messageCuenca... buy or sell? Market update Oct '11- Ecuador Insider

I know what everyone else is saying on the net…

Cuenca?  Now?  Buy, buy, buy, buy, buy!

Yeah, whatever… I’ll let the other guys hype the place up, they’re doing a great job, I’ll just call it like I see it…

This week I was in Cuenca, talking to a few contacts, having a look around…

Here’s what I dug up…

No doubt about it, over the last 2 years, since Cuenca was put on the world retirement destination map, prices have jumped. In fact, there's rumored to be over 3000 expats living in Cuenca already.

Also, favorable local government policies for new Ecuadorian home owners have also pushed prices up a bit.

For instance, in the area of San Joaquin, land was going for around $40 per square meter in 2009, now in October of 2011 the same land can be sold quickly for around $80-100 per square meter… a 100% increase.

Land around the city center of Cuenca is going for around $300-350 per square meter.  And to build you’re looking at around $400 per square meter of construction, just like elsewhere in Ecuador.

In the center of nearby, highly promoted, Yunguilla valley lots are going for around $25 per square meter.  You can find cheaper lots on the outskirts of the valley.  A few short years back before the international promotion lots were quite a bit cheaper.

But Yunguilla is still an interesting buy because that’s where everyone wants to have their hacienda, the locals included.

The good news is you can still find one bedroom suites near the center of town for $35-40k, two bedroom condos for $50k, and desirable three bedroom condos starting around $65k just like you could two years back, but the options are less at those prices and you’ll have to look harder.

Also, I did eat a delicious full course lunch with chicken and vegetable soup for $2, just like I did 2 years ago.

Buying a property to rent is also a good idea, I’ve noticed a strong surplus in demand over rental supply.  You can rent 1 bedroom high-end furnished suites in a relatively new building for around $300-400/month, 2 bedroom furnished condos for $450-500/month, and 3 bedroom furnished condos for $700/month.

Overall, Cuenca is entering the third year of a strong real estate market, but right now I’d still say Cuenca is a “buy”, but not a “quick buy”… you’ll want to shop around a bit, prices are all across the board but deals can be had! 

And if you’re after a colonial house fixer-upper in the center of Cuenca, FORGET about it… currently, prices for colonials in Cuenca are sky high, often $400,000 or higher… in a soon-upcoming newsletter I’ll cover an interesting alternative or two in Ecuador if a colonial fixer-upper is what you’re after.   

Until next week!

Domenick Buonamici
Real Estate Investor, Entrepreneur

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