Quito, Ecuador Real Estate: Holding Up Through the Global Recession

In a country as geographically diverse as Ecuador, it is not surprising that its capital – Quito -finds itself spurned by most international retirees and second home buyers. …

In a country as geographically diverse as Ecuador, it is not surprising that its capital – Quito -finds itself spurned by most international retirees and second home buyers. They would rather be at the country’s many beaches or majestic mountains. Foreigners who move to the city are usually there because of a job relocation or a government assignment.

However, as Ecuador’s popularity as a destination grows, Quito finds itself shoved into the limelight. It doesn’t disappoint those who stop to take a look. "Quito is a cultural and tourist center and fairly sophisticated by Latin American standards. The suburbs in the lower valleys surrounding the city are growing rapidly," said Sylvan Hardy, editor of Ecuador Real Estate News.

About Quito, Ecuador

Perched at 9,350 feet above sea level amidst the Andes, Quito – the capital city of Ecuador – is surrounded by the lush beauty of Guayllabamba river basin. After La Paz, Bolivia, it is the second highest capital city in the world. Even though it is located just 15 miles south of the equator, Quito boasts spring like weather year round because of its high altitude. It is a popular destination for tourists and language students alike.

Long before the Spanish established the city in 1534, Quito was an important Inca center and its history stretches back all the way to the second century. Quito’s historical center is believed to be one of the best preserved in the Americas and was the first city in the world to be declared a World Heritage by the U.N. 

Quito is also the capital city of the Pichincha – a province that shares its name with an active volcano. The city is located on the Eastern slopes of the volcano, which last erupted in 1999. Aside from covering Quito with ash, the most recent eruption didn’t do much damage to the city. Before 1999, Pichincha’s major eruption was in 1660, more than three centuries ago.

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In 2005, the population of Quito was estimated at 1.5 million, making it the second largest city in the country after Guayaquil. As the capital of Ecuador, the government is one of Quito’s major employers. In addition, universities and tourism related businesses are also mainstays of its economy.

The city is divided into two major sections, the old town and the new town. The old town reflects the Spanish era, replete with winding cobblestone streets, beautiful Spanish baroque style churches, and well-preserved colonial buildings. The new town, among other things, encompasses Quito’s major shopping district, universities, and some government institutions. 

Quito has a good public transport system, according to The Guardian. It also has a wide variety of restaurants and bars and a decent night life. However, walking alone at night is not recommended. Petty crime such as pick pocketing is rife in parts of the city and violent crime is on the rise. Last year, the number of personal and property crimes jumped by 30 percent when compared to 2007, according to Stratfor – a global intelligence service. Still, Quito is considered to be one of the safest cities in Latin America.

Quito real estate

Real estate prices in Quito have yet to show the dramatic falls some world capitals have seen. To be sure, prices are not rising currently. "Prices may be falling slightly," said Hardy. He estimated a three to five percent drop. Nonetheless, "the market for Ecuadorian buyers is still good although the number of sales are off by about 5 percent for the first three months of 2009 [when] compared to 2008," Hardy said, quoting market statistics from the local real estate association.

Just like anywhere else prices in Quito vary according to location and type of property. In general, new condos can cost roughly between $900 to $1000 per square meter while properties that are five to ten years old can go for anywhere between $600 to $800 per square meter. Interestingly houses, yards and all, are cheaper than condos. "New houses in good neighborhoods can be had for $600 $700 a meter and used houses for less," said Hardy.

There is no multiple listing service (MLS) for real estate in Quito or the rest of the country. In general properties are put on the market by owners and buyers deal with sellers directly. International buyers who are interested in purchasing real estate in Quito can hire an agent who would then canvass the city on their behalf. Ecuador has no restrictions on foreigners buying property in the country. The buying process is actually quite simple.

However, buyers should research all aspects of the purchase process before jumping in. "They should do their homework in terms of understanding the market, knowing a reasonable price to pay for a given property," said Hardy. "They should also have an attorney handle [their] purchase. In much of Latin America lawyers are not involved in property transactions and buyers often get what they pay for. Also, buyers should get references -from other foreign buyers, if possible- when choosing a real estate agent," he added.

Looking ahead

Experts are optimistic about the prospects of Quito’s real estate market. "I think the market will weather the bad economy and be strong again once [the economic] turn-around begins. Quito and Cuenca are the most popular cities in Ecuador for foreign buyers and I don’t see this changing," said Hardy.

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