Expat Community > Ecuador

HGQ2112
Joined 2009
Posts: 1640

Real Estate Report - Salinas/Punta Carnero

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:

Salinas/Punta Carnero Strong Buy / On Watch
Perennial favorite Salinas has done well for us over the years and continues a “strong buy”, but alas some cracks have begun to show, meriting that it be placed “on watch”, for a possible downgrade in 2013. While the downgrade, if it even occurs, is unlikely to take Salinas below the level of “buy”, it warrants some analysis. Salinas has been the undisputed premiere resort community for the Ecuadorian elite and middle-class for quite some time. Unfortunately, it seems that this positive designation has led to a bit of resting on its laurels, or, at least reputation. This has led to several other alternate beach towns flexing their muscles over the last 5 years and Salinas is not alone anymore, as a vacation hot spot, although it still remains in a class by itself - for now. This trend of relying on its past glory, forsaken much in the way of innovation, coupled with two other developments, leads Salinas to go “on watch” for 2012. The first of the two developments is the continuously stalled finalization of the commercial terminal, to truly brand the Salinas Airport as international worthy. While to some extent this is more a psychological boost, than a major economic catalyst, the continued, now postponed a minimum of 5 times, goes directly to the previous issue of the cities inability to generate meaningful progress and chance. A failure to have a clear time line for the airport’s completion by 2013 will be viewed as a negative indicator for the region. Secondly, since breaking off as its own Province, Santa Elena continues to struggle with unemployment and poverty, to an unfavorable degree compared to the national average. This year, while most Provincial governments were able to point towards an increase in economic activity and a decrease in unemployment, Santa Elena was listed amongst a handful of laggards that did not meet the grade. While Salinas, proper, is largely spared this indignity, well outperforming the Provincial averages, how long before the Provincial problems come to roost at the door of Salinas? Without a more cohesive, cooperative and consistent Province-wide economic plan in place by 2013, the view for Salinas will be negatively impacted. Salinas remains a fantastic investment option for now, but storm clouds are appearing on the horizon. Let us hope the winds of change blow them away.

Item of Note: Many locals might feel slighted at the failure to mention Punta Carnero, which many see as having its own individuality as opposed to Salinas. Still, so long as Punta Carnero falls under the same local municipality control as Salinas, it is hard to separate the two. Punta Carnero remains the quieter, more serene, surfer side of the peninsula, for Salinas proper. However, it would be egregious not to mention the extensive level of renovation taking place Punta Carnero side, including the launching of two newer hostels, the pending arrival of an exciting new condominium tower project, unlike anything seen on the Ecuadorian coast and the possible repositioning of the Hotel Punta Carnero into something different...and better.

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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Real Estate Report - Salinas/Punta Carnero

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