Ecuador real estate sales up in 2008; returning Ecuadorians, foreigners fuel 20% growth in Cuenca

Although Ecuador real estate sales to foreigners increased in 2008, the number was dwarfed by purchases by Ecuadorian citizens returning from the U.S. and Europe.  Gustavo Moreno, spokesman for a Quito-based national real estate trade organization, said the worsening world economy will probably bring more Ecuadorians back to the country, helping to keep the real estate market strong in 2009. ”Although Ecuadorian citizens will be forced by the bad economy to come home, many of them have savings and will be able to afford to buy property here.”

Moreno expressed concern that unlicensed real estate agents are taking advantage of returning Ecuadorian and foreign buyers and said that his organization will crack down on the practice in 2009. “We will especially watch for this activity in the major cities,” he said. He added that efforts are in the works to increase the number of real estate licensing courses offered in the country.

Nation-wide, Moreno estimates that real estate sales grew up by 10% in 2008, with the largest increases coming in Cuenca and Manta, where sales were 20% higher than the previous year.

President of the Cuenca real estate association, Xavier Sanchez, reports that there were about 18,000 local sales in 2008 compared to $15,000 in 2007. Sales totaled $360 million, he said.

According to Sanchez, many recent sales have been motivated by a “flight to safety” in an uncertain economy. “People know that a house or apartment is a good place to secure their savings when times are hard. A lot of people tell me that they are buying to make sure their money is safe.”

Moreno estimates that 20% of Cuenca real estate sales in 2008 were to returning Ecuadorians, most of the them from the U.S. Asked about the number of foreigners buying real estate in Cuenca, he explained that it was difficult to separate returning Ecuadorians from foreigners. “The best guess I have from associates in Cuenca is that 110 to 120 foreigners purchased propoerty there last year.” Moreno added that this was a large increase over an estimate of 25 for 2004.

Local and national governments in Ecuador do not keep a separate list of foreign real estate owners.

Moreno added: “There is a university report that says Cuenca and Quito will be the most popular places for foreigners to live in Eucador for the next two decades and I believe this is true.” 

Photo caption: condominiums were the most popular properties for foreign buyers in 2008.