April 28, 2012

Cost of Living: Who Says You Have to go Frugal in Cuenca!

Well it looks like the good folks at International Living want you to know that you don't have to go frugal to live well abroad.

Ok, so you don't "have" to go frugal to have a better life abroad, including in Cuenca Ecuador. 

“When you think frugal you think old tires in the yard, bad neighborhood, and an old home needing repair, but this…this is nice, and for $250"!  Said an Ecuadorian real estate broker friend of ours when she came over to our home for dinner.  “You guys are doing a good job, more people should do what you're doing”. She says this even though she herself makes a living providing rentals to expats that go for two to four times the Ecuadorian rate. 

Let's put the shoe on the other foot for a moment: Let's say you live in a fairly decent apartment in Los Angeles, California for the normal for locals, average rental rate of $3000 a month.  Unknown to you is that a change is coming soon.

The mainstream Retirement Press is highlighting L.A. as a great place to retire for less.  The articles are aimed at expats in Hong Kong paying $16,000 (true price) a month in “desirable Hong Kong gringo neighborhoods”.

The promoters hook them up with agents in the city eager to make fat rental commissions off the expats. They're nice people and all, but they have no scruples about showing the expats $6000 to $8000 a month apartments because, well, they're such a bargain compared to Hong Kong, and, you know, the commissions are higher. And besides, there's lots of demand from expats from Hong Kong eager to save lots of money compared to what they're now paying in Hong Kong.

Soon enough your Los Angeles neighborhood is overtaken with "expats" from Hong Kong bragging about what a deal they've got on their $6-$8K a month “luxury apartment”. Unknown to them, the $3k apartments are just as nice. 

Next month, your landlord evicts you because he wants to rent to the "nice foreigners" who pay more. You are looking for a rental now and can't find anything unless it's twice what you were paying before.

In the meantime, the mainstream retirement press is having a field day writing articles in the mainstream news on the web about what a great place L.A. is to retire for less than in Hong Kong.  They highlight rental prices in the $6 to $8 thousand a month price in their articles showcasing them as “normal rentals”.  An obvious bargain, compared to Hong Kong, according to the slant in the articles.

The writers do not live in L.A. and neither are they retired there.  They do visit occasionally, just long enough to talk to the rental agents described above.
The rental and real estate agents love them, and the Hong Kong readers eat it up.

While this wonderful scenario is unfolding in your city, you hear a lone voice crying in the wilderness:  here ye, here ye, look ye, retire in L.A. Just like we have, be frugal and rent a nice apartment for $3,000 a month. 

The mainstream press in response snickers at the word “frugal” in their promotional advertisements, telling their followers to turn up their noses at those lower beings, because hey, you don't have to be like them, you don't HAVE TO go frugal.

Frugal is only for those lower beings, we are much better than that. 

In the meantime, the news gets out to the local L.A. Residents:  the Hong Kong foreigners are filthy rich, and not only that, they're dupes, why else, the locals reason within themselves, would the foreigners  pay two to three times as much for rent as they could?  They must be so rich they don't care.  Well then, since they're that rich and don't care, let's raise our prices too when ever they come around.  And that's exactly what happens.

One day, you and your friend go into a sewing shop asking for a skirt that should cost $20 dollars, and, because you just happen to outwardly have the same features and looks as those other foreigners you are quoted $180.  (statement based on a true story here in Cuenca).

You go home, shaking your head in amazement.  You sit down to relax with a cup of coffee and read the L.A. Real estate ads for fun.  To your amazement, you see ads for ¼ acre lots on the river for a million dollars.  These are aimed at the foreigners, because no local in his right mind even if he has the money, would ever pay such a ridiculous price.  Why, they could retire on that!

The river is not anything spectacular as these things go.  It's just a river, locals wash their laundry in it, and some defecate and urinate in it. Even the city dumps waste in it.

If those Hong Kongers would just step outside of their “superior gringo gulches” they would find that they can buy a whole house right on a huge deep water lake with sailing and water sports for the same price as that ¼ acre lot on the river in L.A. or sometimes less – right there, in their own country.  You know, there's a recession going on back home in Hong Kong. But is anyone paying attention?

Of Course not, how could they?  The mainstream retirement press would never highlight such things even if they knew them.  How would they ever be able to sell “the dream” to all those rich foreign dreamers.  You know, the grass is always greener on the other side of the fence.  Or is it?  Watch out because, if you hold your nose up too high, you might step in a pile of dog poop, or trip on a rock or a piece of metal while crossing that greener grass!  Especially here in Ecuador.

4 comments:

  1. It's supply and demand. The same thing happens in Texas when people from California buy the "cheap" property in Texas.

    Even if the people moving to Cuenca aren't willing to pay more than the locals, the increased demand will still drive up the price unless and until more housing can be built.

    There is only so much land in the "desirable" areas and people can either pay enough to live there or they can pay less and live somewhere else.

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  2. I would be interested to hear more details about the $180 skirt incident. I'm thinking that the lady simply didn't want to sell your friend the skirt as opposed to trying to Gringo-gauge...

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  3. Agree completely. After making the post, and upon some reflection, it occurred to us that might have been the case. Still though, it was worth mentioning because well, northerners are used to buying something when it's for sale without being surreptitiously refused.

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  4. Sorry that I came up as "Unknown" Haven't quite figured out the commenting yet...

    Dena

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