Following a deep slump, Cuenca contractors and real estate agents looking for recovery

Oct 20, 2017 | 13 comments

By LIam Higgins

Cuenca building contractor Carlos Taiano sees better times ahead for his business. Acknowledging the hard times he’s gone through in recent years, he borrows an old maxim to illustrate his point: It’s usually darkest just before daybreak.

Cuenca saw a building and real estate boom from 2008 to 2013.

“The last three or four years have been terrible for anyone involved in the construction business,” he says. “I’m not just talking about builders like me but also for laborers, craftsmen, construction materials merchants, and real estate sellers. Today, we are seeing the first signs of a recovery.”

Cuenca’s Chamber of Construction confirms Taiano’s assessment of the industry slump, reporting a 47% decline in building starts from July 2014 to July 2017. “Actually, you can add another 10% to that if you go back to late 2013,” says chamber president José Jaramillo.

“People see several large projects under construction around the city and they think we’re doing fine,” says Jaramillo. “What they don’t understand is that these jobs started three or four years ago and are finishing up. They don’t notice that very few new projects are starting. This is the result of the depression our industry has been suffering.”

Taiano says that the construction sector was set up for a fall following the real estate boom from about 2008 until 2013. “There were more buyers than new properties available and prices were appreciating 20% a year, some evening doubling,” he says. “Everyone in the business was making money.”

According to Taiano and other builders, the boom was fueled by sales to Ecuadorians returning from overseas or sending money home for investment. “They were mostly buying residential properties, especially condominiums, and at one time they represented more than 50% of all buyers in the Cuenca canton. It was really an anomaly and when those sales slowed down it hit everyone in the industry very hard.”

Taiano, who began his building career in South Florida, isn’t the only one who sees better times ahead. “We are turning the corner and when voters reject the Correa’s capital gains tax I predict you’ll see a lot more building starts,” says small builder Felix Piedra, referring to a question that will appear on a national referendum about a law aimed at stopping real estate speculation. “That law has held up building starts and when it’s repealed the industry will begin to have better health.”

Taiano does not expect another boom. “What I predict is slow, steady growth, not the frenzy we had a few years ago. Actually, we are better off if that doesn’t happen again. What we need is a consistent market that benefits everyone involved in all the building and sales trades.”

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