This is Part 2 of a Two-Part Series on the “State of Real Estate in Ecuador Post-Pandemic.” These blogs concentrate on Cuenca and the Ecuadorian Coast. If you missed Part 1, you can find it here: http://ecuadoratyourservice.com/the-state-of-real-estate-in-ecuador-post-pandemic-part-1
Be it a Cuenca city home or condo or an Ecuadorian coastal beachfront property, one thing is for sure. The Coronavirus has given people time to reevaluate what home really means to them and what they may or may not require in future residences. Keeping a watchful eye on the marketplace during COVID-19, some trends and differing consumer desires and demands started popping up that might give a glimpse into the changing face of real estate post-pandemic. Here are just a few of those trends.
(1) Exodus to the Country. Many buyers will be looking for a country property where they can grow some food and enjoy a healthier outdoor lifestyle. Places like Paute, San Joaquin, and Tarqui – all approximately 30 minutes from Cuenca — fit that bill and most likely will be more in demand. In the Andes and Highland areas, crops such as potatoes, corn, beans, asparagus, onions, cabbage, and tomatoes can be grown and buyers who are looking for a sustainable lifestyle will find “homesteading” in these areas appealing. In Yunguilla, approximately an hour further south, the elevation is about 1,500 feet lower than Cuenca which means a warmer climate, less rain, and sunshine nearly all year long. Here you can grow almost anything.
(2) “Survivalist” Market will Expand. The more extreme “Survivalist” market will increase, as preppers and others who want to safely hunker down with a high quality of life and plenty of room for family and extended family will be looking for properties where they can totally live off the grid, store food, and survival provisions, and be completely self-sufficient for extended periods of time if necessary. Pantries, storage rooms, and heavy surveillance equipment will take on higher significance for this group — inside and outside of their homes. Yunguilla has many properties that can serve as retreats for this target audience, with gorgeous views and never-ending opportunities for a sustainable and healthy lifestyle.
(3) Digital Nomads Move Globally. Digital Nomads who are used to the entrepreneurial lifestyle, telecommuting and working from home and who aren’t tied down to a physical location anymore will travel the globe in greater numbers after the Pandemic ends (and when international flights resume.) Ecuador will benefit from this demographic shift thanks to the country’s affordability and variety of areas to live in.
Telecommuters, as well as young families, will be looking for condos and single-family homes either on the beach or in a city, making Ecuador’s affordable oceanfront properties and Cuenca’s hip downtown condos appealing. This work-from-home group will want dedicated office workspaces and high-speed Internet. Some young families who fit into this category may also want to homeschool their children, which means a secondary area that can be turned into a classroom and study corner. These “bonus” rooms do not have to be large, simply private so work and school projects can be accomplished without interruption. Sellers who have extra rooms, rather than one-room condos, will be the winners here.
(4) Income-Producing Properties Take on New Significance. Properties that can serve not only as a place to live but a place to create an income stream will be on the rise. High-density urban cities may see a collapse in their Airbnb rental markets, but opportunities for investors to purchase long-term rental units is expected. Cities favored by expats, like Cuenca, should remain steady in this regard.
Investors are also looking at beachfront properties for renters and travelers in areas including Olon, San Clemente, Salinas and Manta, and for coastal agricultural endeavors that yield immediate returns on their investments. Tropical weather and fertile soils on the coast produce bananas, sugar, cacao, rice, avocados, mangos, and pineapples among other crops and are ideal for growing products to sell and export. The property below not only has 10 buildings that can be rented out to locals or agricultural workers but also boasts 400 producing Moringa Trees. Moringa is coveted worldwide for its many health benefits and can provide an immediate income stream for a saavy entrepreneur.
(5) Second Homes Offer Security. Buying a second home away from a big urban city will also see a revival. According to a local Ecuadorian developer, people from Guayaquil are already contemplating buying a second home in Cuenca, given the tragedies that happened in Guayaquil during the pandemic. Cuenca bedroom communities such as Challuabamba and San Joaquin, only 20 minutes from downtown, have a big appeal for the Ecuadorian market for this reason — and are also popular with expats wanting to be away from the bustle of downtown in a natural surrounding, but close to all the amenities that a city like Cuenca has to offer.
For expats, purchasing a second home in a foreign country has the added benefit of allowing them to travel to a secure, personal vacation getaway; and also, the extra security of not being at the mercy of one single government, economy, or marketplace should times get tough again.
(6) Proximity to Medical Facilities Key For Some Buyers. The proximity to medical facilities will be a key selling point, especially amongst retirees, older expats, and those with compromised health challenges. Here, we will see a reverse-trend where some owners currently living in the country, may choose to move back into the city after feeling the isolation and vulnerability something like the Coronavirus can bring. Cuenca — with its more than 20 medical facilities — will be a very appealing choice for this demographic. The ability to have government-subsidized insurance, IESS, at a monthly rate of approximately $73 for a single person and $86 for a couple, is also a draw for foreign investors.
(7) Get Me Some Air. Most buyers who favor cities will also be looking for outdoor space, even if it’s only a tiny terrace that allows fresh air and a small place to sit. Developers are taking this into consideration and new projects, like Cuenca’s Casa del Huerto, will offer three communal outdoor spaces, plus individual balconies in most of the condos. The forward-thinking communal spaces in this new pre-construction downtown project will include an orchard, an urban garden, and a large rooftop for relaxation and recreation. Located in the heart of downtown Cuenca, this exciting new pre-construction project still has about 7 units available for sale.
(8) Purchasing Raw Land. Many buyers will be looking for raw land so they can build their own dream homes to exact specifications that suit individual lifestyles. Whether in the country or in the city, configuring spaces from the very beginning to create useable, private work and entertaining spaces, as well as having beautiful outdoor amenities will be increasingly more important and the best way to do this is to build from the ground up.
Also, land ownership is generally a good investment, especially if it’s located near a popular city or airport, and may offer buyers a great return on their investment in the future. If investors can ride out the storm and wait for the pandemic panic to be over, purchasing land could be an investor’s ticket to riches, critics say. Raw land is available in and around Cuenca, in inland areas of the Ecuadorian coast and on the Ruta del Sol.
So where does this leave us? Recovery in the real estate sector in Ecuador won’t come overnight, but we have every confidence that it will come back, hopefully, sooner rather than later. One major obstacle that Ecuador has to overcome is the negative and at some times, sensational media coverage of the pandemic in Guayaquil. In spite of the heartbreak there, Ecuador is not Guayaquil and that is a message that needs to be heard when it comes to the real estate market. The Ecuadorian government and Tourism Boards are already working on campaigns that will re-introduce Ecuador as a viable, safe, and attractive place to live and purchase real estate. This will come, but it may take time.
On May 7th, The World Bank’s board of directors approved $506 million in emergency loans and grants for Ecuador. This, just days after the executive board of the International Monetary Fund approved $643 million in emergency financing for the country. Both of these will help our nation get back on its feet, which in turn will hopefully, impact real estate in a positive way.
As Franklin D. Roosevelt famously once said, “Real estate cannot be stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” We are firm believers of this philosophy and we’re ready to help you when you choose to take the plunge in Ecuador.
If you are interested in buying or selling or if you are a current client wanting to update the status of your listing with Ecuador At Your Service, please contact Ashley@ecuadoratyourservice.com.