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Why A Villa In Havana Now Costs More Than Miami

Article illustrative image Partner logo The Blue House, Cienfuegos, Cuba

HAVANA - From the end of 2011, when President Raúl Castro decided to legalize the buying and selling of houses between Cuba’s private residents, including foreigners who have “permanent” residence status, a flood of opportunity has opened up in the real-estate sector that would have been unimaginable in the past 50 years.

Cuba is now not only booming in terms of tourism – tourism from the U.S. is growing exponentially, partly thanks to Barack Obama’s decision to allow flights from the U.S. – but also in the real-estate arena.

The prices show the extent of the boom: luxurious colonial-style villas in the most desirable neighborhoods of Havana, the capital, are sold higher than similar properties in Miami, Florida. We’re talking in the area of $1 million.

Sure, the official sale documents will list smaller figures and the names of the new owners won’t be those who are actually paying, but rather dummy resident buyers who, in a year, do not earn even a fraction of the real sum handed over.

There are a swarm of intermediary real-estate agents, though still illegal in Cuba, who abound on the Internet, and are tolerated by the regime. They make sure that the sale deeds are impeccable and respect the new law, and have helped allow the Cuban property market to actually attract much more capital than the equivalent in the U.S.

Raining U.S. dollars

The “illegal” Cuban real estate agents, the so-called “correctores” who are usually to be found on Havana’s Paseo del Prado, confirm this. “The market is fantastic,” said one, who wished to remain anonymous. “We have never seen anything like it.” The reason? “Without doubt the money that’s raining from the United States and that’s destined for their family and friends in Cuba.”

The real buyers, in the large majority of cases, are Florida Cubans, who emigrated to Miami in the years following Fidel Castro’s revolution and who now, thanks to the new laws, are looking at the property market in their homeland. All emigrants dream of returning sooner or later to their country of birth and growing old at home, even if only for six months out of the year.

On the Internet, however, the best neighborhoods for someone looking for a house in Cuba, as long as they have a local dummy buyer or permanent residence on the island, are the high-flying Detrás de la Fachada, literally, “behind the facade” and Revolico.

In Detrás de la Fachada, a small villa with a garden, a terrace overlooking the sea, a living room, four bedrooms and three bathrooms, is put on the market officially at 500,000 CUC, an acronym for “convertible Cuban pesos,” or half a million dollars. In Revolico some villas in the luxury areas of Miramar or El Vedado, can even reach more than a million CUC. The intermediary earns on average 10% of the real sum paid by the buyer.

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