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Abstract

In the present investigation the prices of immovable property destined for housing in the city of Loja-Ecuador were valued, by means of the analysis of the financial ratio PER (Price / Rent) with the application of gross and growth yields that derive from said ratio. The PER was used to identify the average number of years that an investor takes to recover their capital placed in real estate, based on the return the annual rent generated by the houses.
The results were obtained from a sample of 403 properties for sale and lease, located within the six parishes that make up the urban area of ​​the city of Loja. The findings show that the most profitable area, and that also has the highest price per square meter, is the central parish "El Sagrario", on the contrary, the most expensive parish in the city is "El Valle". As a final result it was determined that the average PER in the city reaches a proportion of 28.63 years, which is a value similar to the levels observed in economies where the real estate bubble phenomenon of 2008 occurred, but clarifying that it is not necessarily this result is conclusive for a real estate crisis.
Keywords: PER, real estate bubble, sale price, housing.