Evolution of expat communities: From ‘adventurer’ to ‘early adapter’ to the ‘saturation’ phase
By Lee Harrison
Expat hot spots around the world go through a fairly predictable cycle, morphing through a number of stages between their initial discovery and their maturity as a mainstream destination. The specifics of this evolution vary, but the general principles remain the same. As the Covid-19 pandemic winds down, we can expect the trends to continue.
Phase I, the Adventurer Phase: During this phase, the destination attracts people who will go anywhere, regardless of existing stereotypes or perceived danger. These include adventurers and backpackers, as well sex travelers and those hiding from ex-spouses, pending lawsuits, etc.
Phase II, the Early Investor Phase: During this phase, people with money to invest, who believe they see potential in the destination, begin to visit and to take positions. At this stage, there is little to indicate that the destination will boom, so these early investors are acting on their instincts and past experience. At the Early Investor stage, travel and live-overseas websites and publications are beginning to take note that a hot-spot destination is emerging.
Phase III, the Early Adapter Phase: During this stage, more investors arrive as do the leading-edge of second home buyers. Overseas retirees arrive in larger number as well as those who want to work from abroad or start a local business. At this point, the expats who show up are able and willing to adapt to the culture, learn speak the language, and fit in.
Generally speaking, real estate continues to qualify as a bargain during these first three phases.
Phase IV, the Mainstream Phase: During this phase, the expat community is beginning to form a “critical mass” and to take on an identity of its own. By this point, some expats have blended into the local community, while others, including many who cannot speak the local language, can begin to survive within the expat community alone. Phase IV also brings opportunities for entrepreneurs, who can count on a fair share of expat business for their survival. Real estate prices during this stage move from bargain levels at the beginning to what I’d call “fairly priced” as the stage progresses. Early investors from phases I and II–at least those in it for the investment only–are thinking about moving on.
Phase V, the Expat Saturation Phase: Here the expat community can take on a life of its own and becomes a recognized cultural entity within the local environment. This phase is also characterized by loads of opportunities for expat entrepreneurs catering to other expats. Newcomers can begin to survive on their own, without learning the language or ever becoming part of the local community. During this phase, property prices can reach premium levels. Early Investors may sell at this point, and Early Adapters from Phase III probably begin to miss the adventure of earlier times.
During Phases I through early Phase IV, most expats are adapters and survivors, and most succeed in achieving the lifestyle they came looking for. During late-Phase IV and Phase V, the expats moving in are increasingly what I would describe as just “along for the ride.” They didn’t do much investigating or preparing before they arrived and are less likely to learn the language and adapt. These folks often become resentful and unhappy.
Lee Harrison lived in Cuenca from 2002 to 2007, and since then has lived in Uruguay, Brazil, Colombia, Chile, Mexico and Arizona. He puts Cuenca in late-Phase III or early-Phase IV of his expat community calculation, but sees early signs of Phase V. After years of peregrination, he still considers Cuenca his favorite expat destination.