Cuba: The Real Estate Revolution
You say you want a revolution? Well here it is. On November 11, 2011 the new and improved Castro regime, purportedly lead by Fidel’s brother Raul, instituted a policy allowing for the sale and purchase of real property.
Previously, a Cuban citizen could own property but did not have the right to sell it. As such, properties have been held and maintained by families for up to four generations, but as the families grew in numbers, the rooms in a house or apartment didn’t. Consequently, it is not uncommon for three to four generations to live under one roof. That scenario sounds like a sit-com just waiting to happen; 22 1/2 Men, 23’s Company, 37 is Enough, Modern Families (I’ll leave my agent’s number if Hollywood is listening). But seriously, what does this mean to the investor, speculator, banker and realtor? I’m glad you asked. In order to determine the potential emerging market, I’ve sought the opinion of various industry participants and asked each to share their own unique perspective. Question: Does Century 21, with 8,000 branches in 71 countries, have any plans to open offices in Cuba and/or the U.S. which would specifically serve clients who are interested in this new market? Answer: "C21 does not currently have plans to expand its presence onto the Cuban mainland or market." Annia Garcia, Broker/Owner of Delphi R.E. Miami Fl. Ms. Garcia is of Cuban descent and offers; "Speculators from Italy, Canada and Spain are and have been investing in the market for some time now. American investors think Cuba is beautiful but they are still scared that the government can take back properties if they wanted to."
On another but related front, I think it would be unfair to only consider the economic and capitalistic aspects of this scenario. As such, the feelings of the Cuban people should also be considered as part of this equation. I’ve taken the liberty to poll the average man, or in this case"hombre" in the street. Who, by the way, has a literacy rate of 99.9%. Leonardo, who is a Cuban citizen living in town of El Vedado, Havana was asked his opinion regarding potential U.S. buyers. Is it "Yanqui go home" or does the average Cuban welcome future American buyers? "We do not have bad feelings against the Americans or any other foreigners. We do welcome any help to our economy."
Questions that remain: the owners of U.S. properties that were expatriated by the government in 1959 have yet to be compensated. (1.8 Billion +/- owed) Will the Cuban government offer reimbursements? And if so, will the value be based on the 1959 market? Will the compensation, if any, be retroactive? That’s another Cuban crisis to be explored at a later date.
Ultimately and in-short, until the embargo is fully lifted, U.S. citizens can not directly purchase Cuban real estate. And if purchased indirectly through third parties, it is as always, "Caveat Emptor," or in this case; " Precaucion al Comprador."