Cuban property market booms after limited reforms

A local housing office in Havana Officials say there has been a big rise in homeowners trying to update their papers so they can sell

The jingle for the Hola Habana TV show has a distinctly retro ring to it, but in Cuban terms the daily programme is groundbreaking.

In a country where commercials were banned as brainwashing and property deals long prohibited, state television is now advertising private houses for sale.

Every day the Hola Habana presenter reads out a list of properties on offer.

"We get countless applications by post or email, or brought into our offices," explains department boss Marta Cepeda, as the team wraps up a week's recordings.

"House sales are still a new thing, but there's big demand. Interest has really grown."

For decades the only way to move house in communist Cuba was to arrange a swap. Officially, no money changed hands but the highly restricted and bureaucratic process spawned a thriving black market.

Faster or otherwise prohibited swaps could be secured for a fee; house sales were even disguised through arranged marriages: you'd pay, wed, transfer the property title, then divorce.

But for almost a year now Cubans have been free to buy and sell their houses legally as part of the limited programme of reforms initiated by President Raul Castro.

Street sales

In a run-down Havana suburb, Eduardo Marquez is seizing the opportunity.

In the street outside his flat, a battered, 1950s American car has its own "for sale" notice propped in the window - another sign of the changes here.

Start Quote

Eduardo Marquez

Now we're allowed to sell and that means I'll have money to take to America”

End Quote Eduardo Marquez Property seller

Eduardo is leaving Cuba for good to join his wife in the US, so he is selling their two-bedroom flat, contents included.

"Before, you had to leave the state everything if you emigrated: the car, the house - they confiscated the lot," he explains.

"Now we're allowed to sell and that means I'll have money to take to America."

But the advertising slots on Hola Habana are limited, and while an increasing number of house-sellers are advertising online, internet access is restricted and expensive.

So every weekend Eduardo Marquez joins a growing throng on Havana's Paseo del Prado.

House-owners line the once-grand avenue with handwritten signs on scraps of cardboard. There are more notices pinned to the trees all around.

Once the signs would have read "To Swap". Now, most say "For Sale."

"I've got a lot more sales on my books than swaps now," says Yolaida, one of many unlicensed agents "facilitating" both types of transaction for a fee.

"Swapping was much more complicated. People used to wait up to a year for something that suited them. Now they can buy and sell wherever they want. It's much faster and simpler."

Opening up - a little

The property market remains closed to foreigners and even Cubans are only permitted to own one home, to prevent speculation. But the freedom to sell has brought all sorts of people out onto the streets.

For Sale signs on the housing market Outdoor advertising: Owners list the benefits of their properties

"These changes had to happen," says architect Juan-Carlos, who's browsing the tree-ads. He's planning to pool resources with a friend, buy a bigger flat and start renting rooms to tourists to supplement his small state salary.

"The economy needed to sustain itself and I think things will open up more now, little by little," he says.

Perched nearby is an elderly man, looking to sell his flat. He does not want to give his name.

"I need the money," he says simply, explaining that his 200 pesos ($8; £5) pension does not last a week. He has decided to downsize and use the extra cash to start up as a street trader selling sweets.

"Better to live uncomfortably, but to eat," the pensioner reasons.

Distortions

Potential buyers complain that finding affordable properties is not easy, though.

For Sale sign on Havana's alternative housing market There are suggestions that many sales are disguised as "donations" to incur a far lower fee

Gauging average prices is difficult as sellers admit they only declare a fraction of what they make to the tax authorities: there's a 4% tax on house sales.

But highly desirable places are advertised online at $100,000 or more, and even modest properties are often priced far beyond the reach of most Cubans.

An average state salary is under $20 a month and bank credits are small and still difficult to obtain.

It is an indication that much of the money coming onto the market is from Cubans' richer relatives abroad.

"There are all sorts of distortions," agrees Omar Everleny, head of the state-run Centre for the Study of the Cuban Economy.

"But the government can't wait until a state worker can afford to buy a flat. You need to open up the possibility first, then reach the point where workers' salaries cover a deposit, at least.

"The main thing is that people have another weight lifted from their shoulders, another prohibition."

Marry and donate

There are other peculiarities.

While anecdotal evidence points to a boom in property sales, official statistics from January to August only record about 15,000 transactions, while the number of property donations is twice that.

That appears to support claims that many sellers are disguising house sales as "donations", which incur a far lower fee.

For many Cubans, though, the change - albeit imperfect - is welcome.

"The situation was crazy in the past," says Miguel, a young man weighing up the market on the Paseo del Prado. He is looking to sell his flat before emigrating to Canada.

"Before, if you wanted to buy my apartment, you'd have had to marry me, then I could donate it to you," he says.

"This way is better for everyone."

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