The Ecuador Insider

The Ecuador government announced that for 5 weeks they will buy the un-exported banana produced by local farmers due to the decrease in international demand caused by the slowdown in the world economy.

According to the association AEBE, 4,200,000 boxes of bananas are exported weekly from Ecuador, of which currently only 3,000,000 are being bought by the world market.

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The government recently released a new plan that will attempt to make sure 75% of the population has access to the internet by 2017.

Currently, only 23% of households and 11% of businesses in Ecuador have access to Internet according to figures released by the Ministry of Telecommunications.

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According to Benito Cabrera, the sub-general of oil production of Petroecuador, as stated in an article in the newspaper El Universo, Ecuador will produce 58 million barrels of oil annually by next year, the current output is about 51 million barrels per year.

As well, this year they plan to drill 65 new wells, and for next year they plan to drill 95 new wells. The cost of production is $5 a barrel and it sells for $89-90 on the open market at today’s market prices. The sale of crude oil funds 30-40% of the Ecuador government’s budget annually.

What does this mean for property investors? I wouldn’t buy large tracts of land in the countries’ Amazon region, where most of the oil is found. Because if oil is found on your property, the government could nationalize it, they would pay you for your land but usually not as much as the market value.

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This week, a few words from a movie (Training Day) came to mind as I sat with a real estate agent on the coast of Ecuador.

“You Disloyal M***** F*****”.

But this time, I was on the positive end of the disloyalty.

You see, I was talking with the seller’s agent of a property I was interested to buy. The seller and I had already agreed verbally on the purchase price when the agent told me “actually, the seller was prepared to drop $20,000 further”.

I think he told me that because I had befriended him, or maybe it was his way of helping to close the sale thinking I would ask for another discount.

But what it really did was turn me off the buy and I ended up making a fuss about a small detail and backing out. Maybe I’ll let the property “marinate” and jump back in the game if it hasn’t sold within a few months.

This serves an important lesson for you this week, in Ecuador don’t disclose, even to YOUR realtor, the absolute minimum price you’ll accept when selling your property… they just might tell your potential buyers! And on the other end, if you’re buying in Ecuador be sure to ask the realtors, “So what’s the lowest bid the seller will take?” They just might tell you. That’s how it goes down here in Latin America!

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This week I’m pleased to announce the new discussion forum for expats located on this site here. Or access it from the link “Expat Q&A Forum” in the upper left hand corner of this site.

Ask questions, get answers, meet new people and network, 100% FREE, don’t delay ask your first question today to join our community online…

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