Now is the Time to Buy Beachfront Property in Ecuador

Monday, July 13, 2009

Dear Reader,

Before my trip to the coastal areas, all my mental imagery of Ecuador centered on the highlands—cold nights, snow-capped peaks, high altitude, women in shawls with babies in colourful blankets, and men with plaits. I’d never really given Ecuador beachfront any thought, until my research uncovered some surprisingly affordable property. I couldn’t resist checking it out.

I headed to Salinas, one of the country’s major coastal resorts, through hills, mountains, grassland, trees and cacti—all with their own peculiar shade of bright green. There were small wooden houses on stilts, with the structure made of bound cane or reed, and a thatch palapa style roof on top.

The infrastructure is generally good if a little patchy in some areas. I traveled on the Ruta del Sol, the coast road from Salinas to Manta. It was an ideal way to see a large section of the breathtaking coast of Ecuador.

On the approach to Salinas, the vivid green scenery gradually gave way to brown scrub, caused by the mixture of salt and sand in the soil. The entrance into the town has dirt sidewalks, small houses, tiny shops with the owners watching the world drive past. Just when I started to wonder what I was doing here, the scene switched. The beach area came into view…the houses gradually increased in size…a modern shopping mall appeared…a swathe of high rise hotels emerged…a totally different world, to cater to the middle- and upper-class Ecuadorean families who vacation here.

Salinas sits a on a spit of land, a two hour drive from the international airport. The hotels form an arc on the bay, facing the calm ocean, separated from the water by the Ruta del Sol road. A boardwalk runs the length of one section of the beach, alongside the Ruta. There is a yacht club in the bay, with boats anchored around it. Beach umbrellas, a plethora of Pinguino ice-cream parlors, some small bars and restaurants, casinos, nightclubs, and jet ski hire comprise the amenities.

The other side of the beach, behind Salinas Yacht club, is more residential. You won’t find bars, restaurants, or shops. The perfect arc of tan sand stays pristine thanks to a cleaning crew. Gleaming boats are moored at the Yacht Club, presumably owned by the wealthy families from Quito and Guayaquil who have been coming to their weekend homes in Salinas for generations.

Average pricing here runs around $750 to $1,000 per square meter for a condo right on the sand with uninterrupted ocean views. Construction quality looked good, interior finishes above average. So what is the catch? I can hear you ask. The infrastructure is good. The cost of living is very affordable. The climate is ideal for beach living. Why are the prices still so low?

That can be explained by saying that in the four days in Salinas, I saw only one other foreigner. My husband asked him where all the other expats were. The man—who owns a home on the beach and has been coming to Salinas for more than a decade—explained that there weren’t any. He said that he really enjoys Salinas, the friendly locals, and the beach. Most of all, he appreciates the price he paid for his home which was on the sand—a location that he could not have afforded elsewhere.

Pricing is tied to the relatively small pool of Ecuadorean middle-class buyers who can afford a weekend retreat on the beach. Ecuador’s economy is not on a boom, rather a slow steady climb from the recession of the late nineties. Average salaries are a fraction of those in the U.S. The number of potential buyers is limited. However, more expats are turning their attention to the coastal regions—previously ignored in favor of the elevated, mountainous areas of Ecuador. And once those expats start to enjoy Ecuador’s low-cost beach lifestyle and realize what good property deals there are to be had, they will buy…putting an end to the underpriced property.

Margaret Summerfield