A modern four-bedroom house in Ecuador
$550,000
Located on the eastern edge of El Cajas National Park, a UNESCO-designated Biosphere Reserve, this contemporary home sits on four undulating acres outside Cuenca, Ecuador’s third largest city.
With the 110-square-mile park as a backdrop, the four-bedroom, three-bathroom home is “isolated and surrounded by nature,” says Ashley Rogers, Ecuador At Your Service founder and real estate agent. “But in less than 30 minutes, you can be at dinner or the symphony in Cuenca.”
The sellers teamed up with Cuenca architect Sergio Zalamea to create “a modern home where nature invites you, but one that is private, safe and secure,” said Ms. Rogers. The design includes underground fuel and water storage tanks and a discreet 818-square-foot apartment below the 1,830-square-foot main building.
A winding dirt track ascends from a paved local road to the house’s electronic gate and a steel-framed carport. The front door opens into a great airy room whose floor-to-ceiling windows offer expansive views of the mountains. “The house is near a cloud forest, so the landscape is always changing,” said Ms. Rogers. “Cajas is also one of the world’s best bird-watching areas. You may see condors or a llama, but you don’t see people.”
The great room, heated by a wood stove imported from Chile, opens onto a kitchen with stainless countertops and appliances. Opposite the kitchen, the owners have hidden a small office behind a detached entertainment center. German-made vinyl tiles, which resemble wood panels, cover the floors. Sliding doors open to a floating deck that juts out from the house.
The home, built in 2012, is being sold fully furnished, Ms. Rogers said. The main bedroom, with its bathroom, is on the same level. An oversized headboard hides a closet space behind the bed, and the wide window views the rolling Cajas landscape. A guest bedroom and bathroom are located in a short hallway.
Three feet below the main floor, the owners designed a two-bedroom apartment with a kitchenette and living room and a “huge pantry and food storage perfect for preppers or chefs,” said Ms. Rogers. The level is accessed through a private exterior entrance or a fold-down staircase under a steel door in the main room.
An antenna-based Wi-Fi system provides intermittent internet access in the area, and the Mazan River, which runs through the property, supplies the home’s water.
Cuenca, a city of about 700,000 residents in the Andean highlands of central Ecuador, is the top destination for foreign buyers in Ecuador, said David Morrill, editor of CuencaHighLife, an English-language news site. “It’s a cultural center with a rapidly increasing level of sophistication, and it’s relatively comfortable if you don’t speak Spanish,” he said. “You have the advantages of the big city without the problems of the megacities.”
Mariscal La Mar International Airport, about 2.5 miles east of downtown Cuenca, connects Quito and Guayaquil, Ecuador’s two largest cities.
Market Overview
Because foreign buyers prefer a limited number of locations and housing types, Cuenca’s market is “a story of two cities,” said Zach Cashero, president of MLS-Ecuador, an English-language listings and dates site.
“It’s a seller’s market when you sell to foreigners,” he said. “But there’s too much inventory for local buyers, who make up the bulk of the market.”
Before the pandemic, “the ex-pat community was mostly made up of retirees looking for small apartments for the low $100,000,” said Xavier Amoroso, owner of the HouseHuntEC agency in Cuenca. (Ecuador adopted the U.S. dollar as its national currency in 2000.) Most preferred to live in the Old Town, the surrounding “new town,” or in apartments along the banks of the Tomebamba River. But a wave of younger and wealthier buyers is driving increasing demand for homes in rural areas; Mr. Amoroso said: “They don’t want flats. We have beautiful mountains here with animals and nature. In a detached house, you can see it from your garden.”
In the wake of the pandemic, resident foreigners are also upgrading to larger homes. “If they lived in high-rise buildings, they now want access to fresh air and more space in the country,” said Ms. Rogers, the listing agent. At the same time, retirees who had chosen rural areas “needed to get closer to medical care. So we see a shuffle among people who were already here.”
With ongoing economic challenges for Ecuador, prices in Cuenca have remained stable over the past decade, Ms. Rogers said. “There are a lot of new high-rise buildings that are going up, and their prices are going up because construction costs are rising,” she said, estimating that “a nice high-rise apartment that an American would consider” averages about $1,300 per square foot ($120 per square foot). A “high-end home in a nice area” costs about $800 per square meter ($75 per square foot).
Mr. Amoroso said the “average suburban luxury home,” on half an acre of land, costs $550,000 to $580,000 on average.
Mr. Cashero of MLS-Ecuador said the average price of mid-range apartments is $125,000 to $150,000, while a “mid-range detached house that a foreigner would look at is on average $150,000 to $200,000,” with the top at $600,000 or $700,000. That’s more estates.”
Prices have skyrocketed in Cuenca’s old town, with its limited stock, strict building codes, and Spanish colonial architecture. “When we started in 2009, nobody cared about these properties,” said Juan Heredia, founder, and CEO of ISAM Proyectos Inmobiliaros, which converts older commercial properties into multi-unit residential buildings. Now they go for about $1,600 per square foot, he estimated, significantly more than what they cost a decade ago. “Foreigners want to be here. It is where social and cultural life takes place.”
Who buys in Cuenca
While Ecuadorians power the market in greater Cuenca, the city has long attracted retirees with its low cost of living and high quality of life. Most of them are Americans, with a small fraction from Canada and Europe, according to Maite Duran, founder of the Gringo Visas consultancy, which helps foreigners obtain visas. ““Americans see the cost of groceries here compared to back home, and they are amazed,” she said. “Services here are pennies for the dollar.” In 2018, the International Living website named Cuenca one of the world’s top retirement destinations, sparking another wave of arrivals.
The Ecuadorian government has courted foreign buyers with accessible, cheap visas. The latest Digital Nomad visa launched in March 2022 requires proof of employment with a minimum monthly income of $1,275, Ms. Duran said. The most popular key remains the Retirement Visa, which requires a monthly payment of $1,275 from sources such as pensions, dividends, or Social Security. It specifies a price of $250 per month for dependents or additional applicants. Visas, valid for 24 months, “provide the same benefits and guidelines as any Ecuadorian, including access to government health insurance, opening a bank account, and the opportunity to work here,” she said.
About 30 percent of the real estate market is driven by Ecuadorians who repatriate, said Ms. Rogers, the real estate agent. “They drive up prices just like ex-pats do,” she said. “They are opening new businesses like restaurants. It’s a creative pool of newcomers.”
More Ecuadorian buyers are moving to the old city, ISAM’s Mr. Heredia said. “When we started, 85 percent of our buyers were foreigners,” he said. ‘Now it’s 50 percent locals. And since the pandemic, we have seen more families working remotely with young children and young people.”
Buy base
There are “virtually no restrictions” for foreign buyers in Ecuador, said Grace Velastegui, co-founder and partner at Grace Nelson’s law firm in Cuenca. “There are some exceptions around the borders with Peru and Colombia, but foreigners don’t buy there,” she said.
Notaries oversee real estate transactions, “although we always advise foreign buyers to hire a lawyer,” Ms. Velastegui said. “Many people here claim to be real estate agents, but they’re not.”
The attorney conducts a title search, and both parties sign an “earnest money agreement,” which includes a small goodwill deposit for taking the property off the market.
Most of Ms. Velastegui’s foreign clients grant her power of attorney for real estate transactions, “and not just for people outside Ecuador,” she said. “If you don’t speak Spanish, it is mandatory to have a representative translate for you during the closure.”
Most foreign buyers pay cash “because they have to,” says HouseHuntEC’s Mr. Amoroso. He said that mortgages aren’t available to foreigners until they’ve lived in Ecuador for three years, although cash-short buyers can arrange a mortgage directly with sellers on rare occasions.
Websites
Languages and currencies
Spanish; U.S. dollar
Taxes and Duties
Buyers in Ecuador can pay a total of about 3 percent of the sale price in taxes and closing costs, Ms. Velastegui said. That includes notary fees, a 1 percent transfer tax, and a municipal registration fee that varies by region and sales price.
Attorney’s fees are generally about 1 percent of the price; a power of attorney agreement costs an additional $80.
The cost for visas starts at $450, said Ms. Duran. Her company charges $1,550, including visa fees, to complete applications.
Brokerage commissions in Ecuador range from 4 to 6 percent, Ms. Rogers said. The annual property tax on this home totals about $40.
