A Real Estate Revolution In Cuba May Be Underway

Photo: oneworld365.org
Photo: oneworld365.org

Listed at $1.2 million, the penthouse has broad terraces, marble floors and stunning waterfront views stretching from the Darth Vader-style Russian Embassy to Meyer Lansky’s old Riviera hotel.
That might seem pricey for a Communist country whose average worker earns around $20 a month. But owner John Jefferis, a 57-year-old hotelier from Bermuda, says his target buyer belongs to a different demographic altogether.
“There are very few apartments that can be legally purchased by foreigners, and when there’s a limited supply of something, usually there’s a premium for the price,” says Mr. Jefferis, who adds that jet-setters like his expat neighbors here can probably afford to splurge. “It’s not their first or second or third home, put it like that.”
It is all part of a real-estate revolution sweeping Cuba. More than five decades after Fidel Castro seized power here, ordinary Cubans are starting to accumulate real wealth by buying and selling their homes. Authorities are dusting off plans to develop a luxury vacation-home market for foreigners. And a diplomatic overture between Washington and Havana is fueling a frenzy of speculation over what might happen here if Americans can legally buy real estate again.
“You can’t imagine how many calls we’ve been getting from U.S. citizens,” said Yad Aguiar, who co-founded the Ontario-based Point2Cuba.com in 2011, one of several sites that have popped up in recent years to connect prospective buyers and sellers.
For now, the 54-year-old embargo remains in place, meaning Americans can’t buy property here, or even travel to the island as tourists. And Cuban law bars nonresidents from owning homes outside a few limited experimental developments. But that isn’t stopping some foreigners from trying to wriggle through loopholes to get their hands on real estate now in the hopes of striking it rich.
That is especially true for Cuban-Americans who fled the country after the revolution and are now starting to exert an increasingly important economic influence here. Exempt from U.S. travel restrictions, they can visit relatives here and funnel them money to fix up fading homes-or even buy one for themselves using a family member’s name and dealing in cash.
“Lots of Miami Cubans are just flying there and buying-people with $300,000 or $400,000 or a million under their mattresses,” says Hugo M. Cancio, a Cuban-American entrepreneur who is launching a quarterly real-estate publication in Cuba.
Nereida Margarita Álvarez, who runs a bed-and-breakfast out of her family’s stately, century-old mansion in the once-exclusive Vedado neighborhood, says she was recently approached by a Cuban offering $400,000 for the place, which, to be sure, could use a new paint job and some plaster work on its 18-foot ceilings. She says she turned down the offer, which she assumed had to have been financed from abroad. “I don’t know where he got the money,” she says. “No Cuban has that kind of money.”
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