Over building in Ecuador.

Evidence of too much Chinese influence these days.
In China the overbuilding is in the millions of units.

- No existing homes available for sale
- Only new homes available and those built or being built have substandard construction and are overpriced or both

Sounds to me that not enough homes are being built as demand is out-stripping supply and forcing higher prices for less desirable properties.

SawMan wrote:

- No existing homes available for sale
- Only new homes available and those built or being built have substandard construction and are overpriced or both

Sounds to me that not enough homes are being built as demand is out-stripping supply and forcing higher prices for less desirable properties.

Provided they are actually selling at those prices.

mugtech wrote:

SawMan wrote:

- No existing homes available for sale
- Only new homes available and those built or being built have substandard construction and are overpriced or both

Sounds to me that not enough homes are being built as demand is out-stripping supply and forcing higher prices for less desirable properties.

Provided they are actually selling at those prices.

True.

This is in fact what occurs in Panama City - abundance of unsold new units at what seems above market pricing.  In Panama City much of the investment in the new towers comes from unreported illicit money needing to be laundered into a long-term investment (under many layers of secretive corporations and foundations).  So, the holding period of these "investors" are much longer than most people as profits on resales are of secondary importance to long-term protection.

SawMan wrote:

This is in fact what occurs in Panama City - abundance of unsold new units at what seems above market pricing.  In Panama City much of the investment in the new towers comes from unreported illicit money needing to be laundered into a long-term investment (under many layers of secretive corporations and foundations).  So, the holding period of these "investors" are much longer than most people as profits on resales are of secondary importance to long-term protection.

The Chinese deal is that the people in the middle class have few other investment options, so many own extra homes that are neither selling nor renting.  Prices will collapse or there will be huge ghost towns, or maybe both.

mugtech wrote:

The Chinese deal is that the people in the middle class have few other investment options, so many own extra homes that are neither selling nor renting.  Prices will collapse or there will be huge ghost towns, or maybe both.

If not mistaken, there already are many places in China that are huge ghost towns. Although have heard several of those ghost towns are being built, and or, were built based more on future growth for 20-30 years down the road. If, in fact that's true, or is just some face saving, I have no idea.

Home for Sale

This ad amazes me. I think is way over priced. I check this ad a week before and the description was diferent.

Anybody knows the area? I have seem grafiti everywhere. Not the kind that has nice art and rawings, the kind that the gans uses to mark territory.

SawMan wrote:

mugtech wrote:

SawMan wrote:

- No existing homes available for sale
- Only new homes available and those built or being built have substandard construction and are overpriced or both

Sounds to me that not enough homes are being built as demand is out-stripping supply and forcing higher prices for less desirable properties.

Provided they are actually selling at those prices.

True.

This is in fact what occurs in Panama City - abundance of unsold new units at what seems above market pricing.  In Panama City much of the investment in the new towers comes from unreported illicit money needing to be laundered into a long-term investment (under many layers of secretive corporations and foundations).  So, the holding period of these "investors" are much longer than most people as profits on resales are of secondary importance to long-term protection.

We saw this happen overseas. A lot.

Existing modest buildings demolished and new highrises installed in their place. New buildings remained completely vacant and unoccupied for years.

Because the development companies could borrow against the ever-rising (on paper anyway) value of the highrises to get more money to build more buildings. If they sold off the apartments they couldn't leverage the value of the building. So they never sold the apartments. Not that any normal citizen have afforded one of those apartments anyway.

Cities all over the world are full of these empty buildings. This is a global ponzi.

And in a lot of these 'developing countries' there is insufficient infrastructure to support this development.

At least Ecuador is doing it on only a very tiny scale.

Maria,

Observations I can offer:

1) Ecuador real estate is definitely not overbuilt, in fact, it is likely under-built on the coast, driving folks looking for certain sub-market categories to other foreign markets, where inventory is more plentiful;
2) Ecuador needs a slew of entry-level, lower cost housing;
3) At the other extreme, Ecuador needs a slew of top-grade, exceptional quality luxury end housing;
4) What you address to be witnessing - more building, but higher rental costs - is inconsistent with market realities. New inventory on the market tends to drive down the cost of rentals, not increase it, unless there is a "for sale inventory glut", which other than one possible city, there is not.
5) I think your challenge is finding a real estate professional that knows the markets in which you have an interest. Not a guide...tour operator...or even the infamous "local" that some naively speak of...but a vetted real estate professional.  That would be my advice, Maria.

Hector

It's all in who you know...We went with a "Professional" (LOL) agent who showed us many places. None of which matched remotely our price range or short list of needs. Just by chance while looking at a property we met a person showing that property - a friend of the seller - who was a longtime resident, speaks English/Spanish, and honest. After many more showings by the "Pro" and being charged BY THE HOUR we contacted the NON Professional. Thru him and his contacts he found us our property at a very good price. Anybody in EC can be a professional agent, get business cards, dress up, even have an office, drive you around. Getting someone who you trust, understands your needs and your price range takes a bit of detective work. PM me if you would like his name.

aterosin - I am afraid for the purpose of informing the general readership, I must quibble with your observation.  The very fact that you stated: "After many more showings by the "Pro" and being charged BY THE HOUR..." - stop...right...there!  There is not a single, true real estate professional in the Ecuador market, or ANY real estate market in the world, that would charge you for showings.  Sometimes a client has a "special request" that may require extensive travel or expense for a real estate pro and at such time, at their sole discretion, a conversation may be opened to determine "covering costs", but real estate professional most certainly do NOT charge "time or showing fees". What you were working with was a "tour operator", NOT a real estate professional. Just because it might have been an exclusive and personalized tour, it doesn't make it any less so.  For a real estate pro, charging showing fees would be like your walking onto a BMW dealership in search of the latest model and having the salesman say, "That will be $50 to show you our inventory." They charge, because they don't have the inventory to close. Simple as that.

Hector G. Quintana
[email protected]

Hector, I appreciate your perspective however we had two different "Pro" agents on different visits to EC that showed us properties in and around Cuenca. One was recommended by the International Living folks as well as several other expats and the other PRO was recommended by a friend of ours.  Both of these pro's had offices, business cards, nice cars, and a list of references for us to check. BTW, the fee was $15.00 per hour. Our lawyer also told us that this hourly charge was standard procedure in Cuenca. Our "non-pro" did not charge us by the hour or in any other way.  In fact, he never mentioned a fee however we did "tip" him generously for his weeks/months of helping us find our property. We understand things are done differently in different parts of the world. I'm simply giving our experience. No need to quibble...

aterosin wrote:

One was recommended by the International Living folks

That says it all.

This is true. Some realtors in Cuenca call  it Real Estate Tour and they charge if we want to see their places.
I got a call from a Cuban lady saying that she had an apt for rent but, it will cost us $15 to go with her. I said we dont need no one to take us no where, we have our own transportation.
She said her fee is the way how she works and if we dont like she is not going to tell us anything about the place.
I said, well.. bad luck. Thank you for your call.

MugTech,  Glad you said it...so I didn't have to.

Hector G. Quintana
[email protected]

Maria,

Good for you!  And keep saying, "Thank you, but no thank you" to the charlatans that would have you believe legit real estate agents charge showing/touring fees. Sure mark that they can't sell enough to keep the business afloat and that, likely, due to limited REAL inventory. Believe me, I know the websites. About 75%+ of the listings are dated, sold, belong to someone else as the listing agent or outright fictional.

Hector G. Quintana
[email protected]

THanks you for the thoughtful post.  You are absolutely correct in your observation that there is overbuilding across Ecuador.  This is a developing country and it is developing too fast, many believe and the overbuilding is part of that picture.   Ecuadorians and I have discussed this issue off and on -- and discussed as well the very high levels of personal debt here, cost of imported vehicles being snapped up, etc etc.  I have lived here for three years and it is staggering to watch this situation emerge before your eyes, almost daily..  I saw the same thing happen in CHile from 2002 - 2008.  CHile is not Ecuador but I mean the development in the developing world appears to happen overnight in some cases -- and for Chile, mostly sustainable due to other economic conditions like their incredible copper market across the world, and FTAs with the U.S. EU and CHina, etc...  THe Ecuadorian government has maintained high levels of borrowing which many feel cannot be sustained for long and people in QUito are predicting a crash (with the amounts owed to CHina etc. etc.the precariousness of the oil market which the country depends on). If you are over 50 and have been in SPain or in the U.S> since 2004/05 through the present , you have seen what is emerging here. A serious issue for this little country.

International Living says IT ALL, for sure -- bull ------ always, lies and seduction.

THat is I-N.   Nothing there when you get there.