By David Kaufman
In recent years Cuenca, Ecuador’s third-largest city, has quietly emerged as one of the most popular expatriate communities in the world.
Set on the banks of the Tomebamba River in Ecuador’s southern highlands, the city is a 45-minute flight from the capital, Quito. Cuenca’s moderate costs and mild temperatures have made it a magnet for North American retirees. Indeed, upwards of 8,000 foreigners are thought to have settled in Cuenca over the past decade, many of them over the age of 55.
A recent study by the municipality shows that the demographics of incoming expats is changing, as the number of North American retirees has leveled off and more Europeans and young families are setting up households in the city. Many of the new wave have an eye toward entrepreneurship, establishing or buying bricks-and-mortar businesses or “telecommuting” with their offices back home.
Cuenca was an Inca stronghold before Spanish conquistadors arrived in the mid-16th century. The Spaniards re-named it after the home town of Andrés Hurtado de Mendoza, then Viceroy of Peru, and went on to build one of South America’s most beautiful colonial cores. Today this assemblage of churches, plazas, homes and municipal buildings is a Unesco World Heritage Site, an honour that complements the Cuenca region’s robust industrial, manufacturing and agricultural sectors.
A century ago Cuenca grew rich as the manufacturing and exporting center for “Panama” hats, made from toquilla palm grown on on the coastal plain. The hat industry still thrives, the tourist trade is lucrative and Cuenca produces much of Ecuador’s ceramics, tires, furniture and jewellery.
Cuenca had been slowly luring American expats for more than a decade, but that trickle turned into a torrent in 2009 when International Living magazine ranked Ecuador the “world’s best” retirement
location, and Cuenca as Ecuador’s top city. Supporting this status is Cuenca’s rich cultural life – from its Spanish-language academies and symphony orchestra to film festivals and an international art biennial – along with around 15 medical centres and easy access to Ecuador’s Pacific coast beaches.
In recent years, Cuenca has continued to receive top ratings for expat destinations, most recently in the 2016 ratings of best places to live published by InterNations.
Cuenca’s public sector is investing in the city both to attract foreigners and to improve quality of life for all citizens. The local municipality has launched a series of infrastructure upgrades including construction of more bike paths, pedestrian walkways, underground parking facilities and a $250 million light-rail system expected to carry 100,000 passengers per day once it’s complete in 2018..
“Cuenca offers newcomers a really enviable quality of life,” says Jorge Espinosa, whose tourism firm Luxury Destinations Ecuador has launched a real estate division. “Along with its reasonable size, Cuenca is at a slightly lower altitude than Quito, which means warmer temperatures,” he adds, “while its numerous cultural offerings have helped give the city the title ‘Athens of the Andes’.”
Espinosa says that another attraction of the city is its youthful sense of optimism. “There are six universities here and they help make Cuenca a dynamic community that people are proud of,” he said.
Compared with other Latin American retirement communities such as Panama City or Mexico’s San Miguel de Allende, Cuenca remains relatively affordable. Housing costs, priced in U.S. dollars, the country’s official currency, are roughly $1,200 per sq metre for a condo and $700-$900 per sq. metre for a private house, according to David Morrill, a financial writer for several UK publications and websites. Those prices are between a half and two-thirds of the rates in Panama and San Miguel, he says.
Now may be a good time to buy in Cuenca, say local realtors, who say the market has cooled off from two or three years ago when appreciation was running at bout 12% a year.
“After a long run-up, prices have stabilized and we are transitioning to a healthier buying atmosphere,” says José Parra, who sells to both locals and expats. “Right now, there is still uncertainty due to a slower economy and a new law that raises capital gains taxes, so sales are slow. Both candidates in the current presidential race say they will reduce capital gains and provide other incentives for developers so I expect to see improvement in the market by the end of the year.”
Parra adds that rentals are also very attractive to foreigners. “You can rent a fully furnished, 2- or 3-bedroom condo in Cuenca for as little as $700 a month, which is a fraction of what you would pay in other areas popular with expats.”
Cuenca and Ecuador have also attracted attention for a health care system that allows foreigners to join for as a little as $80 per couple per month. “This is a big draw for many expats,” says Morrill. “Health care costs in the U.S., even with government programs like Medicare, are a huge burden for many retirees.”
Credit: Financial Times of London, www.ft.com