Ecuador Real Estate Report

Free Five Year’s of Ecuador Real Estate History

Ecuador Real Estate Archive VIII

To help you get a feel of Ecuador real estate we have posted this special archive that lists many of the hundreds of messages we have shared with our readers about Ecuador real estate this decade.

Gary’s report on his latest Ecuador real estate tour.

Clouds rise, fragile milk lace, floating dreamlike in the daybreak’s breeze. Fields of green are adorned with apricot rays of early morn spread over razor edged ridge lines and announce the dawn.

Quito Ecuador-August 2000, Breakfast at one of the highest restaurants in the world. The city of Quito’s elevation is nearly 10,000 feet and the Quito Hotel sits on one of the city’s highest knolls, overlooking downtown and surrounding valleys. The hotel’s seventh floor restaurant is one of the highest points in town with a commanding view east, north and west. Daybreak here is one of life’s memorable events.

Merri and I watched the mists rising off the valleys, sunlight filtering through the clouds and saw the city waking up, a few headlights glimmering in the dawn, local indigenous salesmen carrying bundles of goods to their stalls and the scenic mountain peaks coming into view through the gray haze of fading night.

We are focusing on Ecuador strongly now because in the past thirty years of live, work and travel abroad I have manage to stumble upon five golden real estate opportunities, Hong Kong in the early 70s, London in the late 70s, the Isle of Man in the early 80s, Naples Florida in the Mid 80s and now Ecuador. The first four opportunities returned from five to twenty times my investment in just short years and Ecuador may be the best of them all.

The fact that Ecuador has been through several years of enormous political and economic turmoil has kept prices so low, yet have given time to learn the market and where the opportunities are.

One amazing feature about Ecuador real estate is that on every trip we learn something wonderful, surprising and new. We shared this last journey with 100 readers and saw incredible value, but the spotlight went beyond money and was focused on the Ecuadorian people. They have suffered extreme adversity, yet their sweet nature and desire to please seems hardly diminished at all.

Despite the severe monetary hardships the locals have felt, this trip was smoother than any of the trips we’ve experienced before. Our efforts may have been profitable because the austerity has created prices so low many found it hard to believe, but the lightness of spirit in the people we encountered went beyond wealth.

Gary & Merri Scott discuss Ecuador real estate in the top floor restaurant of HOTEL QUITO.

Ecuador Real Estate Guayaquil

For example we spent our first night in Guayaquil at the first class Oro Verde hotel. This five star hotel has accommodations with an opulent, European feel of rich hardwoods and marble polished until gleams. Service was always good but now we noticed a special caring at every level of staff from the general manager to the young shoeshine boy.

These people have suffered every financial humiliation imaginable including a currency plunge from 3,000 to 25,0000 sucres per dollar. Now in an ultimate economic insult their currency is being totally removed. U.S. dollars, nickels dimes and quarters have become the currency on the street. After September the greenback will be the only official currency. Sucres will cease to exits. Yet the hotel’s blend of Swiss training, a large .75 cent per hour labor pool and has loaded this hotel with ever-ready, wanting to please staff. There is not a hint of anti-American resentment.

Despite warm, friendly, really competent service and world class accommodations prices were decidedly third world. Breakfast for Merri and me at the hotel‘s Patio restaurant was from a sumptuous buffet that overflowed with a dozen varieties of fresh croissants, rolls, pastries, breads, platter upon platter of fresh fruit, cereals of many types including an intoxicatingly rich muesli, thick tropical juices, numerous hot plates of eggs, bananas, potatoes, sausage, ham, tamales, omellette bar, many cheeses, fish, quiche, cevichi and more. Thick Ecuadorian coffee and steaming milk, a variety of teas and herbal teas and sweet Ecuadorian cocoa finished the choices. Yet our bill was barely over five US dollars, for the two of us and the entire time we were hovered over by pleasant, helpful staff.

Ecuador Real Estate Salinas

The caring of the people did not change next morning when we rode two hours to Salinas for our first real estate inspection. There we visited the brand new (opened in August) apart-hotel Colon Miramar. Salinas is Ecuador’s leading coastal accommodation (not Merri’s or my favorite) reminding us of Miami beach. High rise condos line a smooth crescent beach overlooking a blue Pacific bay. The exclusive Salinas Yacht Club gleams a short distance across the water, with super cruisers and sailboats snuggled gently in first class docks. Here the people who served probably earned less than a hundred dollars a month, yet we found nothing but complete and earnest service.

The property we viewed is the third Colon hotel in Ecuador (the other two are the Guayaquil and Quito Hiltons). This is a first class building, with every accommodation. There are hotel rooms and a number of condominimized apartments. The two condos we viewed included a 1,300 square foot, two bedroom unit facing away from the sea. The asking price of $85,000. The unit facing the sea was US$120,000. These are the most expensive apartments we would see on the entire trip and the broker who led this tour explained that actual selling prices would almost certainly be much lower. One delegate summed up prices perfectly when he explained that the architecture in this building is exactly like all the new buildings in San Francisco. “The difference”, he said, “is you cannot buy a closet there for this price!”

What that reader did not think of as well (we are so far removed from the ideas of service in the U.S.) is that for about $300 a month (total) he could also have a maid, driver and cook. These apartments also can be included in a rental plan with the hotel.

Ecuador Real Estate Coastal

After refreshments and a two hour drive north up the coast we arrived for lunch at the award winning ecological resort Alandaluz which adjoins Machalilla National Park. We dined in a huge bamboo restaurant overlooking lush gardens embraced by organically grown fruit, vegetables, herbs, bamboo and exotic palms. Delegates viewed charming bamboo and thatch apartments with names like “The Tree”, “The Poet” and “The Painter”. This tiny village is run by people who care for more than just making a buck and it shows. They have a respect for beauty, harmony and nature and are trying to take responsibility for the present and the future with a passionate embrace for life, light and land to preserve it for future generations. They say the humans, animals, plants, skies, land, sea and horizon itself are all unanimous in this preservation.

Yet our impeccably served meal of fresh organic fruits, grains, vegetables, shrimp, fish and tasty blackberry juice (a local favorite) cost less than five dollars a head. The rest of the coastal trip worked this way as well. People served us caringly and perfectly everywhere we visited, from the Oro Verde hotel in Manta (where they saw nearby houses on the beach for as little as US$24,000 and 1,800 square foot apartments with terrace and sea view plus ocean front swimming pool at very negotiable prices in the US$ 100.000 range) to the lunch in a small restaurant overlooking the fishing village of Crucita. This area is famous for hang gliding and the restaurant owner provided a professional to take delegates on free rides off the cliffs and out over the indigo sea.

Ecuador Real Estate Quito

In Quito the people were even friendlier. Such warmth is unusual in a huge city (in the U.S. road rage and ill tempers are more likely to be found than smiles). Service was friendly and earnest and though many people there are suffering extreme financial hardship, tips were not expected. When money was given for extra-ordinary service the recipients seemed surprised and genuinely pleased.

Several delegates also expressed surprise that Quito was a real city, with modern buildings, broad avenues and every infrastructure one would expect. They thought with such low prices they would find a ramshackle shanty town instead of a modern city with broad avenues and gleaming high rises everywhere. Quito is a was called ‘Paris of the south” in the Victorian era and is truly a place where you can get anything.

Here the delegates viewed modern spacious apartments of material and décor not seen in North America for years at prices not seen in decades. The property they saw included new, central apartments for US$25,000 and really beautiful 1900 Sq foot three houses in the Tumbaco valley outside of Quito at US$ 88000 asking price.

Model adobe houses of incredible architectural design at the architects Barro Viejo which can be built for US$ 15-20 sq. foot, incl. fixings, bath, etc. were also viewed.

Ecuador Real Estate Otovalo

After hearing attorneys, accountants, U.S. expatriates and even an indigenous Yatchak (Shaman) speak on differing aspects of Ecuador the group headed north along the Pan American highway towards the shopping village of Otovalo. Here amidst the Twin volcanic peaks, Chimbaroso and Pichincha, and clear Andean skies the group encountered perhaps the sweetest Ecuadorian people of all. The indigenous Ecuadorians are Incan ancestors and live in fertile patchwork valleys, crisscrossed with plantings of corn, potatoes and Quinoa. Though they are the poorest of all with incomes ranging as low as $30 a month they have a charm and sweetness that cannot fail to touch one’s heart.

There are some economic reasons for Ecuadorians to be feeling even brighter. The roads and bridges were in much better shape than those our previous tours encountered. A year’s worth of road work after El Nino and La Nina have improved transportation throughout the country. Better paving is not the only improvement we found in this Andean nation either.

Ecuador’s economy appears to be improving. The consensus from the many experts who spoke to the group is that Ecuador’s economy has turned the corner and is now ready to improve. A recovery may be on the way based on five cornerstones of higher oil prices, dollarization, government reorganization, privatization and a simple rebound.

Ecuador is the second largest oil exporter in South America and oil the Ecuadorian government’s main source of income. As oil prices have skyrocketed so have government revenues. In addition the government is now finally starting to privatize oil, telephone, electricity etc. If this trend continues the economy will be helped enormously.

There are some problems associated with all this change. Dollarization will hurt the poor from a psychological and buying power point of view, (someone who was earning 100,000 sucres a week will be earning four dollars. This will make their income seem less. Buying power will drop as low cost products and services (shoe shines for example) that used to cost less than the lowest U.S. coin in regular circulation will rise. Also inflation will now not be offset by currency devaluation and is still expected to run about 30% in the next year.

However the good news is that the dollarization law prohibits the National Bank of Ecuador from printing money or from being a last resort lender to banks. This will force the government to increase their spending discipline which should force forcing it to reduce costs and keep privatization on track. This should reduce long term inflation and increase the economic efficiency in years ahead.

Will the economy improve and the people of Ecuador become even sweeter as the economy improves? These are answers no one knows, but what I do know is the country offer sweetness and opportunity now. During this limited time before the economy really recovers this rich country offers a special blend of wonderful service, low prices and a sweetness we may never see in this world again.

The final inspections on the tour was in a visit back to the coast and the Casa Blanca Resort where delegates found everything, tennis, golf, marina and water sports, yet 600 to 1400 Sq. foot apartments and houses and apartments from US$ 30.000 to US$ 77000 with financing, including golf membership.

The tour ended with a visit to Otavalo, the largest market in South America. Wool coats, handmade “fishermen” sweaters, and vicuna blankets cost under $10. A good leather coat goes for under $100. Panama hats are made in Ecuador, and the least expensive come in their own handmade balsa boxes for about $3. Rugs, jewelry-especially silver and emeralds, crafts, wood carvings, and pots are on offer at bargain-basement prices.

The group lunch at hacienda Cusin, a 17th century monastery that has been converted into a lovingly restored 40 room hotel. There the delegates saw new houses, built to look 300 years old available on seven year leases (the price is $25,000 which seemed expensive to us but did include all hotel facilities.

On the way back to Quito the inspected brand new pre fabricated vacation homes that can be purchased for as little as $3,000. These houses were previously only $800, so we can see some effects of inflation already, but these sweet little places (about 460 sq. feet) are still a bargain for a vacation home in the mountains or on the sea.

Interested in a second place to live with good services, low prices and wonderful investment opportunity. Visit Ecuador.

Contacts

Dr. Andres Cordova. Tel:593-2-241-105. Fax: 593-2-920-665 Email: andres.cordova@garyascott.com

Andres is an attorney in Quito. His firm represents the National Bank of Ecuador and other government economic agencies as well as private individuals. He is also advisor to Gary Scott’s International eclub.

We have continual Ecuador real estate tours.

I hope to see you in Ecuador. Until then, good investing!

Gary

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