In a tough economy, Cuban real estate is booming.
If the old real estate adage really exists – all about location, location and location – and then about 100 miles from Florida, this is a boom time. The property market in Havana, Cuba, is soaring.
The communist country is seeing its colonial mansions and art deco apartments for hundreds of thousands of dollars. Joining the Caribbean landscape or a treasured place in a pre-revolutionary community can cost as much as $1 million. The price surge is accompanied by speculation in the burgeoning and risky cash-real estate market.
The housing boom is taking place in some parts of the country, which is an anomaly of the Cuban economy, austerity measures, power cuts and fuel shortages that have cost daily lives.
A 12-storey apartment building is visible between two rare empty plots on the island’s famous waterfront, Malecon. Residents call it the blue unicorn.
“That’s because it’s the way it is, and it’s painted blue,” said Yoandi Rizo Fiallo, a real estate broker.
This is a hot property in Cuba.
Rizzo walked through the creaking halls of the building, past the creaking elevator, to the front door of his latest project.
“Welcome,” he said with a smile, as we stepped into a bright, clean, modern, open white apartment. In contrast to the dilapidated fading of the panoramic city buildings, the sensory shock is breathtaking through the huge panoramic Windows on the back wall. Fast forward, bright blue Caribbean can enjoy the beautiful scenery.
“Two or three years ago, this apartment could have been half the cost,” Mr. Rizzo said. Today’s price is about $280,000. The new owner, rizzo declined to say, is restructuring another $50,000.
He added a bathroom to each of the three bedrooms and updated the kitchen with modern appliances. Mr. Rizzo said the new owners plan to turn once-dilapidated apartments into high-end beds and breakfasts to welcome visitors to the island. “Really, it’s a crazy market right now,” he said.
A new phenomenon
The cubans are riding in a frenzy. Five years ago, President raul castro began letting homeowners buy and sell real estate. But it was only in the past year and a half that relations between the United States and Cuba began to warm up, and the real estate boom began.
The U.S. trade embargo prohibits americans from buying property on the island, and Cuban law allows only residents to buy homes. But that hasn’t stopped foreigners from finding loopholes and adding to the frenzy.
Juan Pablo Mugesia and a group of friends hang out behind the blue unicorn apartment. At least once a week, he says, he knocks on his eight-story apartment gate – he says most foreigners will come to quote. He lives in a three-bedroom apartment with his brother, mother and father, and says his father is holding on – now.
“If he gets a good price, he’ll go, if not, we’ll stay,” said mughia. He says about $250,000 of cash sounds right.
In decades of living in crowded, dilapidated buildings and apartment, cost of living in the past few decades is too high, can’t keep on average about $25 a month salary, many cubans are fulfilled.
Luis Vargas, Musiega’s neighbor, says there is no fear that foreigners will take over the place or change its neighbors. He says such sales can help everyone take the lead.
“Now the whole family can move out and do better,” said vargas. “With the income, each brother can cheaper places in town to buy a small house, may be able to buy a car, drive it as a taxi or starting a small business,” he said.
Only cubans can buy legally.
Real estate agent eduardo perez says he receives daily visits from foreigners looking for access to the market. He runs one of several websites in Havana real estate. Mr. Perez said if they had relatives or Cuban friends here, he could help the caller.
“You have the money, I have a legal name in Cuba, we can do business,” he said.
Buyer Anaslay Serrano said she would not have been able to buy the place on a small salary if she were not a Belgian husband.
“My husband is not Cuban and makes it possible for me to buy a new house,” she said in English.
It’s about 1,000 square feet, and it’s a post-revolutionary building, so the rooms, including the kitchen and the living room, are very small. Serrano says she bought it for $28,000 and will spend another $5,000 to fix it – and may even sell it for good profits later.
Real estate agent perez said serrano would get about $40,000 in rent if he did well in the improvement. ‘everything is getting so fast now,’ he says. “The Cuban business is very young, no problem, for that reason, we don’t know about other ways of doing business.”
Mr. Perez studied real estate in any way, mainly from reality shows in New York. He watched offline piracy of American TV programs, which are sold in Cuba every week. He tried to “flip” the house with a catchy phrase in Spanish.
There are no rules, no clear rules, not to mention property insurance, and Yoandi Rizo Fiallo, a real estate broker, says the Cuban market is a big risk these days. He says many of the buyers are sentimental cuban-americans, sons and grandchildren who reclaim citizenship and buy homes in the family’s old neighborhood, regardless of value.
“It’s all about the heart, not the brain,” he said.
Above all, the city has poor infrastructure, poor roads, unreliable electricity and water. There is no guarantee that the government will not reverse existing private property laws.
Back at the top of the blue unicorn apartment, with a $250, 000 penthouse, it began to rain and a stream of water poured into the stairwell.
“This is a problem,” rizzo said. “we’re selling a million dollar house for a city that isn’t ready for millionaires.”