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HGQ2112
Joined 2009
Posts: 1640

Real Estate Report - Guayaquil

12 years ago

I generally release extremely condensed excerpts from real estate country analysis reports on July 1, 2012, for public consumption. This year, business matters and various personal matters have kept me from being punctual. Utilizing the better late than never theory, I offer them as segmented summaries, with each city having its own thread. I wanted to present them in one Ecuador thread, but it would be huge. Frankly, many people won’t even read them and those that do will likely want to focus on one or two cities. I would say that this format will cause folks to have to “hunt and peck” for data, but I still deemed it the lesser of two evils.

This data is presented only for those who have an interest in their real estate purchase, also being an investment asset. For those just looking to buy a pretty house, no point in reading further. The perspectives shared are not for every buyer. Some have different motivations for their purchase, besides sound investing, and those perspectives should be equally respected.

We have a simple system for rating a locale:

Sell - We recommend selling your asset or portfolio as quickly as possible.
Hold - If you have bought already, hang onto the asset and wait for further market developments. If you have not bought already, then do not buy now, but perhaps begin to look around for future opportunities.
Buy - Means that it is a good time to acquire an initial or additional real estate asset in that sub-market, due to favorable long-term market trends.
Strong Buy - Means that an exceptional market opportunity exists and that the time is right for the immediate consideration of an initial or additional real estate asset acquisition in this sub-market. For those looking at portfolio diversity, spreading assets across “strong buy” markets is advised, prior to focusing on “buy” markets, if investment opportunities is your sole or primary reason for purchasing real estate.

We also employ two trending systems. The first is an upward mobility and downward mobility system intended to dictate if this property market is in an upswing or downswing from the last time we reported on it. Upswing markets will be denoted by an ? and downswing markets by a ?.

Also, we place certain markets “on watch”. This is neither a necessarily good or bad thing, but a caution that a pending review to upgrade or downgrade the market is imminent. We try our best to project whether that review is likely to be positive or negative, but some market dynamics are so complex that this projection is not always 100% accurate. it should be used for guidance and not as statements of certainty.

Without further delay...here is data for the market you selected to view:

Guayaquil Buy / On Watch
Crime...traffic...crime...traffic. Come on, let us all be honest. Hard to listen to anyone speak of Guayaquil for more than 30 seconds and not hear both of those themes mentioned. You should definitely heed the mention, but without excluding the rest of the story. Guayaquil has the highest absolute crime rate in Ecuador. First, I said “absolute”. It should. If my statement seems “morbid” or “pessimistic”, consider that Guayaquil has a population of 3,8 million people and rising. For some perspective, my previous hometown back in the USA was Chicago. Metropolis, right? Most recent population figures place Chicago inhabitants at 2.7 million people...and dropping...fast. Ironically, when I began using Chicago vs. Chicago population projections, they were almost dead even, while today those population numbers are heading in distinctly different directions. Perhaps that is partially because Chicago’s crime figures, in every category dwarf those of Guayaquil. Yet, when someone talks about Chicago all you here is...pizza...Chicago Cubs...pizza...Da’ Bears...pizza...Michael Jordan. Oddly enough...crime is not usually mentioned, unless it is a vague reference to the 1930s, such as, “Al Capone...bang, bang.” Sadly, Guayaquil cannot escape its legacy of crime, even though it has a population that is, as a minimum, over twice the size of the next largest Ecuadorian city. And in that dynamic gap between perception and reality lies an excellent, if somewhat selective, buying opportunity.

Guayaquil my be large...filled with crime...and have the driving intensity of NASCAR, but it also possesses many charms. Guayaquil is a city that is growing. It is growing on the back of good, old-fashioned commercial capitalism. If you are a business in Ecuador and you want to be noticed in the regional or international arena, you best come on down to Guayaquil. And...why not? Guayaquil has an internationally recognized award winning airport - actually, multiple award winning airport. Furthermore, not only is the airport compact and usually efficient, but it lies smack dab in the middle of the city center, making it extremely accessible to the business traveler, the city strategically looks to woo. By contrast, compare this to Quito’s airport, which had been located in “Timbuktu”, relative to the central city. Solution? Build a new airport? Where? In a location, identified as “Siberia”, even further from the central city. Ace move.

Guayaquil enjoys Ecuador’s largest and most active port facility, by far, further ensuring a fundamental economic catalyst for continued growth. The city is home to international banks, a booming national construction industry, and numerous “first-world” style malls, hotels and restaurants. The city further offers the pure genius, even if still underutilized, of Malecón 2000 - a mega riverside boardwalk that puts any other in Ecuador to shame. That should change with the massive River City, Pro-Nobis project that will sit atop Santa Ana Hill. Guayaquil, in short, is not only a truly cosmopolitan city, but is a commercial capital city, larger than Chicago and about the size of Los Angeles.

For all the accolades, Guayaquil, while admittedly amongst Ecuador’s most expensive real estate cities, still trades at a fraction of most other international commercial capitals, even smaller cities like Montevideo, Uruguay. What makes Guayaquil even more exciting is that while I have mentioned relatively expensive real estate prices, one must remember that Guayaquil is a huge city geographically, as well as population-wise. The key to investing in Guayaquil is to buy in the up and coming neighborhoods that either have been targeted for renewal or that border already well-established neighborhoods. In these neighborhoods, not only are prices not “high”, even in relative terms, but occasional bargains can be found that will produce strong upside potential. For those that prefer to experience Guayaquil for themselves, rather than listening to online chatter, come explore. Good real estate buying opportunities exist, in Ecuador’s commercial capitol, if you know where to look. We continue to rate Guayaquil a “buy”, with a watch for a possible upgrade, if it can do anything to reduce its crime and traffic issues.

Hector G. Quintana
[email protected]
“In a time of universal deceit, telling the truth is a revolutionary act.” -- George Orwell, “1984”

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SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
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Real Estate Report - Guayaquil

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