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Ecuador & Inflation

Ecuador has low inflation because it is dollarized. However if Ecuador returns to the sucre and Ecuador’s government misspends, inflation may rise faster than inflation in the US.  This will cause the sucre to fall versus the greenback.

What will this mean to real estate in Ecuador?  For some real estate prices will rise for two reasons.

First Ecuadorians view property as real money.  They have not trusted the sucre for centuries so if Ecuador returns to the sucre…more Ecuadorians are likely to buy real estate.

The three main investments that fight inflation are:

#1: Commerce. (normally equities but sometimes bonds as shown below).

#2: The raw materials required by commerce (commodities).

#3 Real estate (required in commerce for production and consumption).

In Ecuador’s past when the old sucre fell, Ecuador real estate prices rose even more.

Some Ecuador real estate markets are better than others.  For example real estate that attrcats both Ecuadorians and North Americans will fare best.

I like Ecuador real estate because it has a growing gringo market. If Ecuador adapts the sucre and the sucre falls, Ecuador’s cost of living (for gringos who hold dollars and other currencies) will fall.   See more about this at Ecuador’s dedollarization.

This will push up demand for real estate that appeals to gringos which will cause some Ecuador real estate prices to rise even faster.

Many North Americans misunderstand Ecuador’s politics, the people, the rumors of crime, the entire ambiance of the place.  This has kept Ecuador real estate prices low. Yet North Americans are catching on and prices are beginning to rise but are still low in terms of other Latin American countries where a deluge of US, Canadian and European investors have arrived.

This is why I have been harping on the $79,000 condos (where Merri and I bought) north of Manta.

Ecuador-beach-condo

I doubt that investors will ever see prices this low again in our life time for the quality of construction and so much green space. There are only 63 units on 12 acres that include hundreds of fruit trees and an organic vegetable garden. (This unit shown above was not quite finished when I took the shot.)

Ecuador-beach-condo-clubhouse

The views are terrific like this sunset shot I took.

Ecuador-beach-condo-sunset view

Prices have risen on these condos, because of dollar based inflation. Cement and steel cost more everywhere now.  The $79,000 units are now $89,000,but this still offer an incredible value.   Plus there are a couple of units that were reserved at $79,000 but have been returned and Kjetil is offering the original price (a $10,000 savings) to Ecuador Living subscribers.

For details on the units below contact Kjetil at kjetil@haugancruises.com

Until next message, may you get a premium for everything you do.

Gary

Join us on an Ecuador coastal this winter.

Here is our latest group inspecting the hotel,which is one block from the Ecuador’s Pacific.

ecuador-real-estate-risk

We’ll view this hotel. It has a huge front porch.

ecuador-real-estate-risk

Large second floor veranda with ocean views.

ecuador-real-estate-risk

Beautiful flowered front yard.

ecuador-real-estate-risk

The building is really rough and needs work…but over 8,000 square feet of building. The asking price is $60,000.

Jan. 24-27 Coastal Real Estate Tour

March 16-19 Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one$1,349 for two

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one$1,799 for two

Better still join us all year in Ecuador! See our entire schedule of 27 courses, tours, mingos and expeditions we’ll conduct in 2009 and how to attend as many of them as you like FREE.

The course fee includes meeting at Quito airport (day before the
course)…transportation (by group bus) to Cotacachi and back to Quito.
Course fee does not include air are. accommodations, food or individual transportation.