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Despite hurdles, Cuba real estate market buzzing

Published on NewsOK Modified: April 30, 2013 at 3:03 am •  Published: April 30, 2013
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In South Florida, home to the largest Cuban exile community, stories abound of people buying homes for family still on the island, or using relatives as fronts for their own purchases.

"I am aware of a number of people who have purchased property in Cuba," said Carlos Saladrigas, co-chairman of the Cuba Study Group, which advocates for closer ties between the U.S. and Cuba as a way to promote democracy.

"And (there are) many others who are financing small businesses in Cuba owned by their relatives," he said.

Cuban law says only permanent residents are eligible to buy property, so any transactions involving outsiders are taking place through proxies. Sometimes the cash is wired to Cuba. At other times, money changes hands in overseas accounts.

A Cuban economist who is well-versed in the real estate market agreed that the presence of foreign funds is "significant," though exact figures don't exist. He spoke on condition of anonymity because he was not authorized to speak to journalists.

Maria Isabel Alfonso, a Cuban exile who teaches at St. Joseph's College in New York, said many recent Cuban emigres left for economic rather than political reasons, and buying property is one way for them to maintain ties to the island.

"For many years I have been trying to overcome that feeling of having lost the connection with Cuba," she said.

There are more pratical motivations for people who haven't left the island. Divorced couples have forced to remain under one roof for years, and multiple generations commonly cram together under one roof. The ability to buy and sell gives everyone more options.

When office worker Milu Selis needed her own space, she and a relative sold their place in Vedado, and each bought a smaller apartment.

"This greatly eases the problem of dividing," she said. "It makes life easier."

Selis and others say it has been surprisingly easy to navigate the bureaucracy, with title transfers taking place in days and a 4 percent tax levied on both buyers and sellers.

Some warn that potential buyers should be wary because Cuba's real estate market is far from transparent. They say buying in somebody else's name with no legal protection is inherently risky, especially since many buildings are in severe disrepair. And while Havana's stately mansions are still drawing big money, prices for less tantalizing properties are starting to stagnate or drop, they say.

"It's a very, very young, imperfect market and it's going to be very difficult as a result to get real supply and demand there," said Joseph Scarpaci, a marketing professor at West Virginia's West Liberty University who studies Cuba.

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Associated Press writers Andrea Rodriguez and Paul Haven in Havana and Christine Armario in Miami contributed to this report.

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Peter Orsi on Twitter: www.twitter.com/Peter_Orsi