Located between two vast Andean mountain ranges and overlooked by snow-capped volcanoes, the city of Quito is typically a stop-off for travellers visiting the Galápagos Islands, 864 miles west in the Pacific. Yet Ecuador’s capital, the second highest in South America, is becoming a strategic commercial hub in its own right with an increase in foreign buyers, mainly from the US and Canada. “Soon there’ll be a diner and a baseball park,” says one incomer with his own flower-export business, who moved to Quito from Wisconsin six years ago.
Ecuador is attracting multinationals and entrepreneurs from the continent and beyond: according to the financial information website MarketWatch, 5,000 to 10,000 US expatriates live permanently in Ecuador, a country of 15.7m people. And in the coming years, the country can expect a lot more. Newly-refurbished road networks and air connections and a stable, US dollar-based economy are not the only things that are encouraging overseas buyers to invest — the country is also one of Latin America’s biggest exporters of bananas, shellfish and cut flowers, as well as superfoods such as quinoa and cacao.
Affordability is another key attraction, especially for retirees — Ecuador does not tax Americans’ social security income; trips to the doctor are cheaper than in the US; and property taxes are considered low when compared to Europe, with further discounts available for homeowners over the age of 65. Developers have snapped up plans for business centres and high-end hotels located near the new Mariscal Sucre international airport, about 40km by car, northeast of Quito’s old town. Daily direct flights to Miami and New York take four and six hours respectively. Young professionals, typically working in the engineering and telecoms sectors, are today busy scouring the property market for bargains. David Zhang, 33, from Beijing, purchased his newly built two-bedroom apartment overlooking La Carolina Park in the central Benalcazar district for $210,000. He works for an internet provider involved in plans to lay down extensive high-speed fibre optics beneath Quito, bringing much-needed connections to a city for which the surrounding mountains are a major obstacle.
There are other Chinese residents in Zhang’s neighbourhood. The average price per sq metre in the city centre is $1,000, according to local agents — compared with, say, $1,800 in downtown Panama City, another area with a thriving expat community. “Prices are just catching up,” says Caridad Vela, director of the real estate magazine Clave, but from a low base — the average price per sq metre for residential property in the capital was just $190 in the mid-2000s.
Quito’s housing market has had a tough time. During the country’s currency transition from the sucre to the US dollar in 2000, Ecuador was throttled by a financial crisis and, for seven years, the property market was at a standstill. Today, new buyers are boosting demand. Since coming to office in 2007, president Rafael Correa has worked hard to improve credit lines for residents. “Houses can be purchased for anywhere between $40,000 and $200,000 under the government’s subsidy programme,” says architect Tommy Schwarzkopf, who runs Uribe & Schwarzkopf, one of the top developers involved in public-sector projects in the country.
Estimates from the US Department of State suggest that more than 600,000 Ecuadoreans fled to Europe and the US during the 1999 banking crisis, but that returning nationals are now strengthening demand and pushing up property prices. Remittances have dropped from 6.6 per cent of GDP in 2007 to less than 3 per cent in 2013, according to figures from the World Bank, and returning Ecuadoreans account for about a third of local sales. Average house prices in Quito increased by 7.4 per cent annually over the same period. Isobel Finbow, a 25-year-old journalist from Suffolk in England, moved last summer to the Guápulo district of Quito, a picturesque suburb that is popular with expats. Monthly rent for her apartment is half of what it would have cost her in São Paulo and a third of what it would be back home.
Her property, which overlooks a valley peppered with whitewashed villas, is a 20-minute drive from the old town. At the top of the hill, closer to the financial district, a modern five-bedroom house with a limestone patio and a pool is priced at $1.6m through Plus Valia real estate.
“By Latin-American standards the value for your dollar is incredible,” says Finbow, “and security is not an issue, unlike many other regional capitals.” Despite that, many Quiteños (city natives) are choosing to live in gated communities. This partly reflects the style of new properties coming on to the market. A 1,020 sq metre, four-bedroom home inside the Rancho San Francisco community in the suburb of Cumbayá with a gym, indoor pool and walled garden is on the market for $2.3m through Nexos Inmobiliarios.
A similar-sized property outside a gated community in Cumbayá, with a whirlpool bath big enough for 14 people, is on the market for $990,000 through the same agent. East of Cumbayá, in La Viña del Rio, a neoclassical-style villa with imposing columns and jungle views is on sale for $1.69m through the MLS Ecuador agency.
Although tourists need to keep a wary eye on pickpockets, violent crime is much less frequent than elsewhere in South America. The old town — which in 1978 was one of the first cities to be awarded Unesco world heritage status — has undergone something of a facelift since Correa came to power. Now dozens of coffee houses and independent retailers sit among the traditional street vendors lining the cobblestone avenues.
Some of the more adventurous buyers are even choosing to live in the old town. Prices for two-bedroom, colonial-style apartments with original features start from $600 per sq metre. “Museums have reopened [under the current administration], mansions restored and four embassies from Mexico, Nicaragua, Palestine and El Salvador are moving in next year,” says Diego Aulestia, minister for housing and urban development.