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


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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

malecon

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.

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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?

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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.

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  • 1 year later...
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

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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.

 

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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

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  • 5 months later...

It's 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 the property, the developer loses money. This law has its own pros and cons. I couldn't buy real estate in Cuba at the time, and now, with a cigar in my hand, I look at the sunset and realize that here it is no worse than in Cuba. Stunning sea views, very warm climate, friendly people, low taxes. This is my paradise for me, where I like to come in the summer with my family and spend a wonderful vacation. I plan to buy another house here in the coastal area.

 

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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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  • 9 months later...

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.

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