Cuba’s real estate market is booming. But will it last?

[El Presidente]

https://www.miamiherald.com/news/nation-world/world/americas/cuba/article217887040.html

Cuba’s real estate market is booming. But will it last?

BY ARMANDO H. PORTELA

El Nuevo Herald

September 06, 2018 08:46 PM

The numbers are stunning.

To buy a house in the once-elegant Miramar neighborhood of Havana, the average Cuban must have saved all of his salary since British troops captured the city in 1762.

That house would cost about 100,000 Cuban convertible pesos, or CUCs — the equivalent of $1.13 U.S. What isn’t even close to equivalent is the pay scale. The average Cuban earns 370 CUCs per year as a computer programmer, state shop administrator, policeman, postman or teacher.. 

 

That disparity alone isn’t startling. Almost every city in the world has elegant homes that only the elite can afford, while average residents live in moderately priced homes. But in Cuba, the price for even a modest home far outstrips local wages.E UP!

According to official figures, the 5,000 CUC asking price for a dilapidated residence in less-desirable Havana neighborhoods like Alamar Jesús María, Luyanó and Párraga equals 13.5 years of salary for an average worker. A modest 20,000 CUC apartment in Vedado amounts to 54 years of average earnings.

Successful business owners, medical personnel who have worked abroad, artists and others may be able to afford the high prices. But its people living abroad – some of them Cubans, some not – who are often buyers.

Making the situation more difficult for island-based Cubans is the financial structure. Cubans cannot access mortgages or bank loans. Real estate purchases in Cuba are generally made in cash — although sometimes the buyers throw in a car, another property, television sets, air conditioners, water pumps and even furniture.

The largest transactions are often discreetly sealed outside Cuba, many of them in Miami.
 

Since the Cuban government legalized the sale of private residences in 2011, thousands of houses and apartments have changed hands each year.

 

It was a time of change throughout the island, noted Emilio Morales, director of The Havana Consulting Group, a Miami company that monitors the Cuban economy. “The authorization for selling homes arrived at the same time as self-employment and the elimination of the ‘White Card’ permit to travel abroad. People started selling their homes to invest in a business or to finance their move abroad.”

Today more than 8,000 properties are available for sale in Cuba at any one time. Four out of five are in Havana, home to one in four Cubans.

The island’s complex real estate market is plagued by a lack of information, funding shortages and legislative gaps. Sellers don’t trust real estate agents, who are not officially organized. There are no independent inspectors or appraisers, no property insurance or transparent documents.

But perhaps the heaviest cloud over the real estate market is the well-founded fear that the laws allowing the sale of private homes can be recalled at any time.

“The current trend toward limiting the private sector, from restaurants to home rentals that were proving so successful, will soon bring with it a contraction of the real estate market,” said Morales. “That was the real aim, because the private sector was winning the competition against the inefficient state sector at all levels, from shoe manufacturing to hostels in private homes.”
A half million for a house in Havana? It’s not that unusual

For now, and seen from abroad, there’s no sign of a slowdown in the real estate market. But there are also no signs that tomorrow will be better, even though it’s one of the sectors of daily life in Cuba that most benefited from the reforms.

[bpm32]

2 hours ago, SenorPerfecto said:

There should be a total ban on foreign land sales until Cuba's economy is 100% free and average wages start to approach those of neighboring nations in the Caribbean. It's the only way to prevent the military dictators from selling out the whole country to fatten their own pockets, and keep all of Havana and every desirable seacoast area from falling into noncuban hands.

 

It would be so sad if no Cubans lived in Havana.

I was under the impression that only Cubans could buy property, so that a foreigner could only buy under a Cuban’s name. Is that not correct?

[oliverdst]

10 minutes ago, bpm32 said:

I was under the impression that only Cubans could buy property, so that a foreigner could only buy under a Cuban’s name. Is that not correct?

I think that too.

[Nino]

5 hours ago, bpm32 said:

I was under the impression that only Cubans could buy property, so that a foreigner could only buy under a Cuban’s name. Is that not correct?

That is the law - only Cubans can buy a property.

And the real estate market stopped "booming" after Obama canceled the "dry feet/wet feet policy" as most sales were going to finance the escape from Cuba.

[PigFish]

On 9/13/2018 at 3:16 PM, El Presidente said:

But perhaps the heaviest cloud over the real estate market is the well-founded fear that the laws allowing the sale of private homes can be recalled at any time.

... man do I love the equality and economic stability created by Marxism!!!

Carry on! -Piggy

[BrightonCorgi]

Is there some samples of property prices.  Prices sound cheap in article.  Even if you got 5-10 years out of it; could be less than staying at hotel if you frequent there.

[dgixxer252525]

Haha I love reading these articles ..thanks Pres! Do you buy them in CUP? CUC? Or the once "imperialist" dollar that is now a part of the revolution? And who do you pay...? The family living there now or the family who originally built/bought the house pre 1959? 

[Ryan]

As has been said, only Cuban citizens (I think also permanent residents in Cuba) can buy property in Cuba. Permanent residency is very hard to get without marrying a Cuban, I know foreigners who have been living for years in Cuba on temporary visas, meaning regular travel outside Cuba to renew their visa.

Cuba doesn't give out citizen-ships (naturalization), even by marriage. I think I have heard that Cuba has granted three people naturalized citizenship since the revolution. And Che Guevara was one of them.  

There have been exceptions in the past for foreigners buying property in Cuba. I think, for example, the Atlantico apartment building on the Malecon is Italian owned, bought during a brief window in 1995 for very specific property types, I could be wrong on that. Anyway, any exceptions would be very rare.

Then there's the "Buy a property in Cuba in the name of a Cuban friend" gig. I lost count of the laughs I've had over rum and coke at stories of those escapades, resulting in a "not recommended" conclusion!  

 For samples of property for sale in Cuba here's Revolico. Cuban Craigslist. As it's Cuban, mainly for browsing in Cuba, pictures won't be of the highest resolution.

https://www.revolico.com/vivienda/compra-venta/

As with most places, "location, location, location" applies. But the effect is amplified in Havana. $13,500 will buy an apartment in Regla, on the other side of the Harbour from Habana Vieja and reachable on a ferry I think based on a design by the Swiss Family Robinson. It's very regular though.

Something similar where a tourist might consider staying and it's $100k very quickly.

 

 

 

[Nino]

22 minutes ago, dgixxer252525 said:

Haha I love reading these articles ..thanks Pres! Do you buy them in CUP? CUC? Or the once "imperialist" dollar that is now a part of the revolution? And who do you pay...? The family living there now or the family who originally built/bought the house pre 1959? 

Me too - always good for a sad laugh.

What @Ryan says applies.

Now let's see : Forget about paying in CUP or CUC. That is funny Monopoly money.
Have Dollars, Euros or Swiss Francs ready - all other need not apply.

You pay your trusted best "Cuban wife" or "girl friend" or your best trusted "Cuban friend" as the property will be on their name.
Just like buying "real" Cohiba boxes from that friend who has an uncle whose wife has a grandfather who knows a cousin who has a neighbour working at El Laguito.

And the "original family" is the last real threat should they one day claim back their original property that was confiscated back then by the Cuban gvmt.

But hey ... no risk no fun, right ?

Guess spending money on Cuban cigars and rum is a safer bet.

 

[JohnnyO]

You have to be a Cuban resident to own a home. Many that live in Miami have dual residencies have bought homes. In Playa 50-$100K might get you a decent home but ALL will need repairs. Those massive homes in Miramar might cost $1 million. Havana a small apartment $25-30K.  In Pinar for $20K you can get a house. In Holguin $5K will do. Whoever is selling the house is likely leaving the country and wont want local currency. The government gets 4% of the transaction. If you buy an apartment and the roof is leaking from your neighbor above he is not obligated to fix it if he doesn't have the money. You'll have to pay for the repair and the association needs to approve any work. If they smell foreign investment they will do their best to take it away. Finally, if you don't have someone in there 24/7 when you come back from your 2 month hiatus even the light bulbs will be missing. John

[Hookmaker]

It is very stupid that only Cubans can buy real estate in Cuba. This hinders their economic growth. If the Cubans will not be able to buy a property, then the developer loses money. How stupid...

Well yes and no, but it also hinders stinking rich capitalist from the US, China etc. etc. to buy up easy picking beach front property everywhere they please.
In Denmark you also have to be a citizen to own property, - had we not kept that rule, not a single foot of beach front would’ve been available to Danes today


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[decsmarg]

Until recently, neither locals nor foreigners could buy real estate in Cuba - the country did not have the institution of private property. In 2011, Cubans and foreigners permanently residing on the island allowed transactions with housing (though, limiting the number of objects in the ownership of two - a decent citizen should have one main house and one - for recreation, no more) https://www.boutiquehomeplans.com/. Since 2014, non-residents can also invest in island real estate. Clearly, now the housing market is growing, hands have been untied, and now it is possible to invest.