Is Cuenca, Ecuador, Real Estate Entering a Buyer’s Market?
Cuenca, Ecuador, is a rare find among expat destinations. Latin America has its share of quaint mountain retreats, eclectic beach towns, and even cosmopolitan cities.
But Cuenca is in a class of its own.
It’s large enough to house a wealth of cultural offerings and first world amenities, yet not so big that it loses its small town feel. It’s authentically Ecuadorian, but with enough North American familiarities to make expats feel right at home.
These factors, combined with its ideal climate and low cost of living (including housing), are the reasons that Cuenca, Ecuador, real estate has been in such demand in recent years.
Cuenca, Ecuador: From “Panama” Hats to Publicized Hotspot
Cuenca’s roots date back to the ancient Incas, before it was conquered by the Spanish in the mid-16th century. Many of the churches, plazas, and other structures they built still remain, earning Cuenca a place as a Unesco World Heritage Site.
The city thrived as an important industrial, manufacturing, and agricultural center. It also saw much success from the production of the erroneously named “Panama” hat, which was made from local palms. Other lucrative industries included the making of ceramics, furniture, and jewelry.
While tourism was always central to its economy, the industry really began to pick up speed over the past dozen or so years. However, the big tourist and expat boom came in 2009 when International Living named Ecuador as the world’s best retirement destination, citing Cuenca as its most attractive city.
Since that time, expats from all over have flocked to Cuenca in droves. They range from retirees to young families or singles, looking to start a business or even work for their same company by telecommuting from abroad.
Why Expats Love Cuenca
Sure there’s the culture, the colonial charm, and the ideal climate (temps in the mid-70s year round). But lots of cities offer those same perks.
Here are a few of the factors that make Cuenca, Ecuador, real estate stand out above the rest when expats are choosing a place to retire or raise their family.
It’s an incredibly livable city.
There are a number of features that not only add value to Cuenca’s already-desirable real estate. They also make residents’ day-to-day life much simpler and more enjoyable.
Recent infrastructure projects include pedestrian walkways, bike paths, underground parking facilities, and a light-rail system that will transport an estimated 100,000 people per day. As a result, very few people find it necessary to own a vehicle in Cuenca.
Other pluses include about 20 modern medical facilities (offering highly qualified medical professionals and state-of-the-art technology), shopping malls, high speed internet, and plenty of restaurants and bars.
It’s family friendly.
In addition to its beautiful architecture, Cuenca is full of public parks and common areas where families can gather. It sits high in the Andes Mountains where four rivers converge, allowing for plenty of opportunities to explore the surrounding natural environment.
Cuenca is also extremely safe, with very little violent crime. It’s quiet and conservative, with most establishments shutting down by 10:00 at night (or at least turning down their music).
Of utmost importance for families with children are quality schools, and the ones in Cuenca are top notch, eliminating the need for a costly private education. The community as a whole places great value on education. There are also multiple universities, which even offer Spanish classes for adults who want to learn the language.
It has a well-established, yet integrated expat community.
Cuenca’s population is quite diverse. In addition to locals and expats from all over the globe, there is also a huge number of Ecuadorians (born in other parts of the country) who’ve lived abroad and then chose Cuenca upon returning to their home country.
North American expats alone account for an estimated 4,000 of the city’s roughly half a million inhabitants. What’s unique about Cuenca’s expats is that they generally live intermingled with the local culture, rather than separated by themselves in a gated community (as expats in many other cities do).
However, they’re still well organized as a group, with many expats events being held regularly.
The cost of living is pleasantly low.
As expenses go, Ecuador offers one of the world’s lowest costs of living. As Ecuador goes, Cuenca is on the higher end. That being said, those two basically cancel out, placing Cuenca on par with (or in many cases still cheaper than) most other expat hotpots in Latin America. Although most would argue that Cuenca has far greater perks and amenities.
Dinner and drinks for two at a first-rate restaurant can be had for $30 or less. Haircuts start at $1.50, as do four-course lunches. A dozen roses cost a mere $2. You can even hire full-time domestic help for as little as $10 per day.
Cuenca, Ecuador, real estate is also affordable. You can get a two bedroom, two bath condo near downtown for as little as $80,000 or rent a fully furnished place for $650 per month. Throw in low cost utilities, food, and transportation, and you could easily get by comfortably on $1200 per month. For $1500 you could really live it up.
Cuenca, Ecuador, Real Estate Is Still a Solid Investment
While not the rock bottom prices you’ll find in some parts of Latin America (including elsewhere in Ecuador), Cuenca, Ecuador, real estate is still a bargain. It’s much pricier than the Cuenca of a decade ago, as properties have been appreciating at rates between 5-12% over the past 10 years, but it’s proven to hold its value well.
El Centro, the compact historic district, remains the most expensive area, and condos boast the highest returns. Just outside the city center are a number of neighborhoods (such as Estadio, 12 de Abril, Remigio Crespo, and the Zona Rosa) that are cheaper and still within walking distance.
Beyond those are areas like Totoracocha and Ordonez Lazo that offer larger homes, plus some modern apartments, at bargain prices. Suburbs such as San Joaquin and Chaullabamba are even more affordable, but those living on the outskirts would need a car due to the less frequent bus routes.
Cuenca’s popularity among students and tourists results in a larger than average pool of potential renters. This is great for those who own property there but only live in it during a portion of the year. Due to the affordability of Ecuador’s real estate, many choose this option, sometimes owning a beach house, a city flat, and a country retreat.
What’s the Future of Cuenca, Ecuador, Real Estate?
Isn’t that the million dollar question. While I can’t say exactly where the Cuenca’s real estate market is headed, I can tell you about a few trends that have been noticed in the past year or two.
The market seems to be cooling down.
Cuenca’s property values are still holding steady, but the days of double-digit appreciation appear to be over. Homes are staying on the market longer, and fewer are selling in general.
There won’t be a huge bursting of Cuenca’s real estate bubble, like what the U.S. experienced in 2008 (due to a history of more responsible lending standards, among other factors), but the market does seem to be topping out.
Construction and new developments are slowing.
There are still plenty of large-scale projects, mostly condominiums, underway in Cuenca, but the number is down from between 40 and 45 a few years ago to closer to 30 today. Likewise, the Chamber of Commerce reports the issuance of fewer building permits.
With more properties on the market, there’s an oversupply of housing for buyers looking for properties over $80,000. There’s simply less demand for new construction properties.
As a result, property values could decrease slightly.
The above factors are likely to lead to a buyer’s market that could help to stabilize, or even decrease, the cost of properties in Cuenca. This decline won’t be a rebound resulting from investor speculation and anticipations of long-term profit, as some expat towns have seen.
Rather, it’s more of the market’s way of righting itself following several years of increasing material and labor costs that had driven up prices considerably. In other words, it’s a good time to score a great bargain.
Many gringos are shifting from buying to renting.
It’s hard to say what’s driving this trend. One possibility is that various categories of expats (e.g. retired couples, families living abroad for only a year or two, etc.) just aren’t looking to buy something long-term.
What they need instead is a turn-key rental complete with furniture, included utilities and a property manager who speaks English. These types of properties average around $850 per month but can vary greatly depending on size, amenities, and location.
Even those mid-range visitors to Cuenca often opt for a nice unfurnished rental for a mere $300-$400 per month with flexible one- to two-year lease terms.
More and more buyers have their eyes on the historic district.
With the introduction of the new train system, as well as the addition of number of public parks and plazas, the historic district has never been more appealing. As a result, El Centro is becoming a highly coveted area for buyers looking to live in a historic building in the center of it all.
It’s also a prime location for developers who want to transform centuries-old properties into boutique hotels, swanky lounges, and luxury condominiums. It’s likely that the historic district could look like a totally different place in another 5 or 10 years. Relatively speaking, that is, since zoning regulations exist to preserve the authentic charm of the city center.
How Much Cuenca, Ecuador, Real Estate Will Your Dollars Currently Buy?
Here are some examples of current listings in the Cuenca area.
A mere $65,000 gets you a 2 bedroom/2 bath condo near shopping and a short cab ride away from El Centro.
$115,000 buys a modern two-story 3 bedroom/3 bath home near the historic district with high end finishes.
For $215,000 you get a 3 bedroom/3 bath home located 3 miles west of downtown that has an open floor plan, a landscaped outdoor space with built-in barbeque, and parking for 3 cars.
With $320,000 you can buy a four-story colonial home in El Centro, complete with 5 bedrooms, 4 baths, and a separate commercial space with income potential on a whopping 7,350 square feet.
What Are You Waiting For?
Cuenca, Ecuador, is one of the most desirable locales in all of Latin America. It’s full of authentic culture (plus modern amenities), breathtaking skylines, and some of the region’s friendliest people.
It offers affordable living without sacrificing any creature comforts. And it’s about to be cheaper to get in than it has been in years. How much more convincing do you need? Check out what Cuenca, Ecuador has to offer today.