Cuban property market booms after limited reforms

Latin America & Caribbean
9 October 2012 Last updated at 01:30 GMT

Cuban property market booms after limited reforms
Sarah Rainsford By Sarah Rainsford BBC News, Havana

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.

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.

"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.

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."

http://www.bbc.co.uk/news/world-latin-america-19755852