Sale of houses in Cuba is a million business

Altos precios y burbuja inmobiliaria, la otra cara del boom turístico en Cuba

HAVANA, 6 sept. A two-story, six-bedroom house in Santa Fe, a coastal area west of Havana, sells for $ 1.5 million. Another house “capitalist luxury of the 50s in the best area of ​​Miramar”, another exclusive neighborhood of the capital, is bid for $ 600,000.

The sale of houses in Cuba is a million business that moves a monetary value close to half of the gross domestic product of the island, according to a study published in the magazine CubaGeográfica, published in Miami.

According to conservative estimates of the study’s author, the sociologist and urban planner Carlos García Pleyán, the volume of the sale of houses is estimated at 37 billion pesos per year, [about $ 1.5 billion] about half of the GDP reported by the government between 2011 and 2014.

The sale of houses was authorized in 2011 and from there a boom in the real estate market. According to the expert, who lives in Havana, in 2012 45,000 homes were sold and 88,000 sold in 2013.

“The market may have reached 100,000 transactions per year, but already in 2015 it seems that its volume began to fall. At the moment, the immigration restrictions imposed by the United States in recent years have contributed to contract the market, “he said.

The market is clearly divided into properties that range between 5,000 and 25,000 CUC, located in peripheral neighborhoods and more available to the local population, and others in better condition in central, tourist and near the sea, with prices starting from 50,000 and up to one million CUC. A CUC, the Cuban convertible currency, is equivalent to $ 1.13.

The average annual salary in the state sector is about 360 CUC per year, which suggests that foreign capital is involved in this segment.

Many Cuban-Americans have invested in houses on the island, either as a home or to open a business run by their relatives. Although foreigners can not buy houses directly, many employ third parties on the island, García Pleyán explained.

Havana, Matanzas and Santiago de Cuba have the highest housing prices. Among the most expensive places are the beach resort of Varadero in Matanzas and the capital municipalities of Playa, where the exclusive neighborhoods of Miramar and Siboney are located; and Plaza, where the popular Vedado and Kohly are located, a residential area where many Cuban soldiers live.

The expert clarifies that his observations – based on an analysis of the announcements of sale published in several digital sites in 2017, press articles, studies and available data – are limited by the scarcity of official statistics on the subject.

A quick look at the portal for the sale of houses in Cuba,, shows more than 1,000 listings of properties over $ 100,000. Forty-three refer to properties that exceed half a million dollars, the majority in Havana.

Several advertisements in Porlalivre use the adjective “capitalist” to indicate that the construction of the property preceded 1959, which adds value to the property, since it is considered of better constructive quality.

“It’s a capitalist apartment on the 1st floor, along Avenida L, half a block from Habana Libre,” says an announcement published on August 2. Its owners ask for $ 100,000.

A classified on a house in that same area includes precise instructions on payment: “Money in Canada, 400,000 dollars in the US, 200,000 CUC in Cuba and $ 200,000 dollars [in] Cuba”.

These exorbitant prices do not appear in the final sales contracts, in which buyers and sellers usually agree to put a figure close to the nominal value of the property that appears in their title.

Last year, the government set minimum referential values ​​for the sale of houses, based on their location and other criteria, in order to collect more taxes. But still, the difference between the values ​​set by the government and the real prices in the market are enormous.

María Rodríguez, a real estate agent or “buying and selling manager”, as she is known in Cuba, said that the owners of the million-dollar properties that are offered through the Internet are Cuban, but that the buyers of this type of property are foreigners or “Repatriated.”

A sale of this type of property can take “months and years,” he said in a telephone conversation from Havana.

The “repatriates” are Cuban émigrés who have returned to live in Cuba. Many do not actually reside on the island but have acquired permanent residence to recover rights such as owning homes.

The Cuban government declares as “émigré” the Cubans who reside for more than two years abroad, who lose their permanent residence in the country and several property rights, civil and political. This process can be reversed through a process known as “repatriation”.

Returning Cubans, those who receive remittances from relatives abroad, Cubans with prosperous businesses as well as artists and athletes, have formed a new class that, together with foreigners, is causing a process of gentrification in the capital, says García Pleyán .

The process becomes more evident in areas such as Old Havana, in which this type of buyers has even made whole buildings, with the aim of turning them into Airbnbs and hostels for tourists, despite laws that forbid it.