This article analyzes the potential frenzy in Cuba’s real estate sector, as momentum picks up in wake of rapprochement talks with United States. Here are excerpts; see full article in the link below:
When the communist island began allowing citizens to buy and sell their homes almost four years ago, it was a godsend for Nieves Puig Macías. The 56-year-old retired architect is suffering from an array of health problems — from bad kidneys to a bum arm — that make it hard for her to get around her three-story home. She’s been hoping to sell it and move into a ground-level dwelling. But two years later, she says she has a new problem: greedy real-estate agents who are so keen on turning a profit that her house has languished, overpriced, on the market.
In just a few short years, Cuba’s nonexistent real-estate sector has boomed into a multifaceted, sometimes frenetic industry: Hand-scrawled “Se Vende” signs hang from dilapidated colonial structures and modern condos, there are real-estate magazines and agents, and almost a dozen home-buying websites have sprung up despite the island’s extremely limited Internet access.
Puig says her five-bedroom, five-bathroom home would sell for $55,000. But agents keep trying to slap an additional $5,000 to $10,000 onto the price tag. “There are people who are interested in buying it, but the intermediaries want to earn too much money,” she said. “And it makes me so angry — I won’t let them.”
If the rebirth of Cuba’s real-estate industry has brought with it free-market woes, those issues are likely to get worse in coming years. As the U.S. and Cuba continue their slow-dance toward rapprochement, it has fueled American fantasies of seaside Caribbean homes on the cheap, and Cuban dreams of deep-pocketed buyers rushing across the Florida Straits.
A combination of strict laws on both sides, however, is keeping that from being a reality. For starters, the U.S. embargo makes it illegal for Americans to invest on the island. And while Cubans and foreign permanent residents can buy and sell freely, those who live abroad are relegated to a few tightly controlled housing enclaves that aren’t particularly a bargain.
Even so, some are already jockeying to be on the front lines of an eventual land rush, buying property under the names of eligible family and friends. Such under-the-table sales have been going on since the 1990s, but accelerated after real estate sales were legalized and now with the anticipation of a new relationship with the United States.
REAL ESTATE RUSH
“A lot of people, without any hesitations, without any analysis or knowledge of the market, are rushing in to buy real estate in Cuba under the assumption that the Americans will soon come and the prices will double or triple,” said Hugo Cancio, a Cuban-born entrepreneur who is launching the quarterly OnCuba Real Estate magazine in South Florida in coming days. Combine that with Cuban exiles who want to return and “you now have an emerging market where the prices are not proportionate to reality,” he said.