The Real Deal Miami

Residential real estate boom in Cuba may not last much longer

Home prices have soared beyond the affordable range for the average Cuban, and the government could reverse its 2011 decision to legalize private home sales
September 08, 2018 09:15AM

Havana (Credit: Joe Raedle | Getty Images)

The prices of houses and apartments in Cuba have soared since the Cuban government legalized the sale of private residences seven years ago.

But the government has been putting new limits on the island’s private-sector economy, which may signal an end to Cuba’s real estate boom.

That trend “will soon bring with it a contraction of the real estate market,” Emilio Morales, director of the Miami-based Havana Consulting Group, told the Miami Herald.

Thousands of houses and apartments in Cuba have been sold annually since sales of private homes became legal in 2011. About 80 percent of homes sold are in Havana.

Many of the home buyers reside outside Cuba because home prices have risen beyond the affordable range for many working-class Cubans on the island.

In the Miramar area of Havana, for example, a house would cost approximately 100,000 Cuban convertible pesos (CUCs).

But average annual pay is just 370 CUCs for Cubans who work as teachers, police officers, state-store managers and computer programmers.

Cubans who live on the island lack access to mortgage financing, so they typically buy homes with cash. Further limiting Cuba’s real estate market is the absence of independent building inspectors, property insurers and appraisers.

But the biggest threat to the island’s real estate market is the possibility that the Cuban government will make private home sales illegal again. [Miami Herald]Mike Seemuth