February 24, 2016

6 Facts Showing Rent & Housing Prices Have Increased Considerably in Cuenca Ecuador by Foreigners!

Once again we bring you the real nitty gritty about expat life in Cuenca Ecuador.  Each year the same question is asked "How many foreigners live in Cuenca" and each year for the past 10 years the same answer of a few thousand (4000) is conjured up just out of the blue. 

What this does is gives those who for one reason or another need to believe that foreigners don't raise prices while they go around spouting off that a few thousand foreigners could not possibly raise housing markets, rental prices, or any prices for that matter.  Their persistent and dogmatic forum postings say things like:

 I am so fed up with unsubstantiated claims (Gringo urban myths) that 4,000 gringos supposedly drive up prices for everybody in a city of 500,000. How does this make economic sense??? Somebody explain this to me with facts.



Ok, who's common sense should we use: how about the official office of the 'Ministry of Foreign Affairs' (MOFA) that processes and registers the visa paperwork!?  Moving on... 

Ministerio de Relaciones Exteriores
1. [Aunque para la Cancillería es halagador que los extranjeros prefieran Cuenca a los países desarrollados de los que provienen, el crecimiento de dicha población “necesita ser regulado”, según Humberto Cordero, secretario del Viceministerio de Movilidad Humana.

Según un estudio de la Universidad de Cuenca, los extranjeros prefieren zonas cercanas al Centro Histórico, a no más de 15 minutos de distancia en vehículo. Esto ha hecho que las propiedades en dicho radio de acción aumenten considerablemente de valor.]
This from the Ministry of Foreign Affairs
Translated for non-Spanish Speakers
[The ministry of foreign affairs is flattered that foreigners prefer Cuenca Ecuador, a developing country over their own country for retirement; however the MOFA states that the growth of the population needs to be regulated because of substantially higher housing prices.

A study by the University of Cuenca shows that foreigners prefer areas near the historic center, no more than 15 minutes away by car. This has caused the properties in that range to increase considerably in value.] 
 
SOURCE: The Cuneca Ecuador Study (2010 - 2011) of the Impact of Foreigners to Cuenca Ecuador - Click PDF for the 2011 study of the Impact of Foreigners to Cuenca Ecuador to get an idea of what the new study involves. (Can't find the new 2015 - 2016 study online, if there even is one)

 2Cuenca has 12,000 gringo/permanent residents now according to the 'Ministry of Foreign Affairs'. 

Ministry of Foreign Affairs (who better to get the facts from than the OFFICIAL office that processes the residency visas, uh?) 

[Según el último registro del Ministerio de Relaciones Exteriores, los estadounidenses que viven de forma permanente en la ciudad superaron los 8.000 habitantes; junto a europeos y canadienses sobrepasan los 12.000 residentes extranjeros.]

Translated for non Spanish Speakers

At the last registry of the Ministry of Foreign Affairs, the number of north Americans (U.S) who live permanently in the city exceeded 8,000; with Europeans and Canadians the numbers surpass the 12,000 foreign residents living in Cuenca Ecuador.

Notice the "El Tiempo" article says...AT THE LAST REGISTRY OF THE MINISTRY OF FOREIGN AFFAIRS.  Unlike the forum opinions attesting actual figures to some University study, these facts come directly from the official government offices that have a registry of all residence apps.

Is the Ministry of Foreign Affairs registry files mistaken? Could there still only be 4,000 gringo residents living in Cuenca years and years later? Please read the article yourself at the source: El Tiempo Newspaper

And how is it that year in and year out these nay-saying doubters throw around the same number of year round residents that was being touted ten years ago?  After many years, they’re still using the same number.  Read on.

The last paragrpah of the article in El tiempo the MOFA states:

[Since 2012 the number of foreign residents increased by 1,000 people per year. The trend continues, according to the Ministry of Foreign Affairs]

But just for fun we'll play the game with all the naysayers. Let's suppose there are still only 4,000 permanent residents living in Cuenca. So what! There is always a new influx of gringos coming that need to rent houses and apartments. Do you get that?

According to the MOFA there are 10 new applicants a day processing permanent resident visa paperwork in Cuenca immigration. That's 50 per week, 210 per month and yearly that's approx. 2060 visa requests, not counting for the last part of the holiday month of December.   If only half retain residency (that's a full 1000 per year that would be leaving)  that would be more than 1,000 new residents each year residing in Cuenca! Which coincides with the MOFA statement of 1,000 new residents each year!
 
[Since 2012 the number of foreign residents increased by 1,000 people per year. The trend continues, according to the Ministry of Foreign Affairs] 

It doesn’t take many gringos who demand what he or she likes, river views, near to El Centro, walking to store, no stairs, pets, a yard, etc…when they all ask for similar cookie cutter housing, for landlords and real estate agents to get wind of it and raise prices on their homes that have these amenities!! But all the gringos have these same demands! Now do you see? It’s not that hard or difficult to get.
 

3. Listen and read what other expats are saying, that have lived here for 3 to 6 years, about rental prices. Are large groups of gringos lying about rental prices doubling, or is it what’s really happening? What or why would a large group of people get from lying about something like this anyway? Please see our video "What's it Like Living in a Tourist City Like Cuenca".
 

4. In 2011 a taxi driver told us not to pay more than $250 to $300 dollars for a 3/3 house.  Should we not believe the local who has lived here all his life, or should we believe the stumped gringo(s) who only just moved here 6-months ago?
 

4 years later: Look online, look in the paper, ask around and you’ll soon discover that the $250 house has vanished. Now the new price for a decent house (same value as the $250 house) is between $450 to $700 dollars rental price. You can get a whole lot of house in a lot of parts of the world for that. See Cuenca Ecuador Rental Market Compared to 8 others Countries.
 

According to Numbeo the cost of renting in July 2014 was showing 50% higher than Medellin. Now, 8 months later it is showing a 72% higher rental market than Medellin. And this is according to 46 renters who live in Medellin and 46 renters who live in Cuenca. Who better to talk about rental prices than the renters themselves!!!?

          (top) July 2014 screenshot taken from Numbeo.com
         (top) February 2015 screenshot taken from Numbeo.com
 

The facts are everywhere, but some gringos show perplexity and wonder how just a few thousand gringos can raise prices that they don’t believe it. A doubting Thomas will never believe until something happens to them to show otherwise.  Just because Thomas doubted, did not change the fact that his Lord was standing right in front of him.
 

6.  Returning Ecuadorians (with money to spend) were descending upon Cuenca in the thousands. These wealthy Ecuadorians have been living in the u.s for more than half their lives, working and saving, and now many of them are returning to their homeland of Cuenca. Many of them live in gringolandia because they are gringos.  They call themselves that.
 

Okay, now that you know some of the facts, let’s do some more considering. When we reverse the process, or let’s say, put our self in the landlord / agents shoes, we just need to ask ourselves this: If all the gringos and all the returning Ecuadorians went back to the u.s tomorrow, who would the landlords rent their $600 and $700 houses and apartments to?
 

The majority of (Cuenca) Ecuador are wage earners and small mom and pop business owners. Are they going to rent a house in Cuenca for $600? No, they probably are not going to rent anything over $300 dollars unless one of the earners in the home is a doctor, lawyer, professor; you know, a wealthier Ecuadorian.
 

Are the majority of renters in Cuenca, doctors, lawyers, and large business owners, or are they wage earners and small mom and pop business owners?  CIA world fact book says the latter. So then we must ask the question again, who is going to rent all of the houses and apartments that were typically priced at the local rental rate of $250 to $300 back in 2011 that are now typically $500 and $700?  Still stumped? It is not rocket science.
 

Many times because of unbelief for one reason or another, we just have to step outside of ourselves to see something, you know, “get it”, even if it is right under our noses.

Until we write again, you might like to read these related articles too.
We're an Expat Family of Five, Living Frugal, Healthy and Happy Abroad. We live in Cuenca, Ecuador and travel the Ecuador coast whenever we get a chance. We just adventured throughout the country of Panama for five weeks! Come along and enjoy some of our experiences with us!

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