How Hard Is It to Buy a House or Apartment in Cuba Today?

By Laura Bécquer Paseiro  (Progreso Semanal)

HAVANA TIMES — People say it’s easier to get to the moon than to buy a house in Cuba. One might take this as mere hyperbole, but the truth is that the prices one comes across in the island’s real estate market are so high and the mechanisms to access this market so complex that it is probably easier to dream of life on Earth’s satellite than in one’s own place in the country.

The issue of housing in Cuba still needs to be seriously addressed and the real estate market is still in diapers. That said, like everything else in Cuba, there are different ways to materialize one’s dream of having a home, be it through legal mechanisms or “under the table,” where everything seems to move more quickly and smoothly.

“It cost me 8,000 CUC,” (around 9,000 USD) says Yanet, who has lived in Havana for 6 years, after leaving Cacocum, a town in Cuba’s east-laying province of Holguin. Her foreign boyfriend – whom she met on Facebook, or so she tells us – helped her pay for an apartment in Havana’s neighborhood of Cerro. It has only one living area, where the bathroom, kitchen and bedroom are merged into one (she puts away the mattress when people come to visit). Though the place is small, she says she is happy. “It’s mine. It’s hard to own anything here,” she says while explaining that she bought it “empty, I had to bring and install all of this (household appliances and water installations). So, it cost me twice the property price, after all was said and done.”

Ismael’s parents are Cuban government officials and served as diplomats for four years. When they returned to Cuba, the official letter afforded some government employees, facilitating the purchase of a modern car valued at 30,000 CUC, was still in effect. They decided to sell this letter and, with part of the money earned (some 14,000 dollars), bought Ismael an apartment near the neighborhood of Santos Suarez, in the municipality of Diez de Octubre. Like Yanet, Ismael had to spend a greater amount of money on home repairs.

“The process of buying or selling a home in Cuba is fairly bureaucratic,” 27-year-old Irina categorially says. At her young age, Irina already owns a home, something unusual in Cuba. She told Progreso Semanal that her mother worked in Venezuela as a medical doctor for more than 3 years. Her earnings there, the money made from the sale of a house in Marianao and some savings made it possible for her to buy a larger home in Luyano.

“The first thing you need to do is look for offers on Revolico [an online classifieds page], to have an idea of what the market looks like,” she explains. Prices oscillate between 25,000 and 60,000 CUC (28,000 to 68,000 USD), depending on the area you’re looking in and the characteristics of the property (the number of bedrooms, whether it has a large patio or not, whether it’s an apartment inside a building or a house, etc.) All of that has an impact on price, she tells us.

Keep in mind that the average salary for a professional working for the State is just over $20 CUC a month.

Once you’ve chosen the house or apartment you like and have met with the seller, you head over to the Housing Institute office in your municipality, for this entity to value your home in Cuban pesos. “My house was valued at 4,000 regular Cuban pesos (200 USD), but I bought it in Revolico at 12,000 CUC,” he tells us, unable to account for this disparity. “The only thing they told me at the Housing Institute is that they were going to fix that “disparity” soon, because a lot of money was being lost.”

Then, you go to the Notary’s with the seller to transfer ownership of the property over to you. From there, you head on down to the bank to deposit the 4,000 Cuban pesos (or the sum the property is valued at). “You run into a wall when it’s time to pay a tax equivalent to 5 % the value of your house. In my case, it was 200 Cuban pesos. You have to fill out a form with a lot of technical information at the National Tax Administration Bureau (ONAT), but they don’t even have a printed copy of it, and they won’t accept it unless you fill out all of that information. Around the corner from the office there are people who fill out those forms for 1 CUC or 25 Cuban pesos. You either pay or perish in a bureaucratic labyrinth,” Irina tells us.

Once you have that document, you go back to the bank and deposit the required sum. Then, you have to head over to the Real Estate Registry within a term of two months to register your home.

Price Disparities and Regulations

Who sets the prices of homes in Cuba? Of all the issues involved in buying a house or apartment, the price of these properties is the thorniest, as “run-of-the-mill” Cubans find it impossible to pay for one with their salaries alone and there are no bank mortgages available.

The prices in Cuba’s incipient real estate market are determined on the basis of location. A one-bedroom apartment in Miramar is far more expensive than a two-bedroom property in San Miguel Padron, given the area’s distance from downtown.

Unofficial Internet pages such as Revolico and Cubisima offer classified ads where one can purchase and sell products, including houses.

Another option for those seeking to buy or sell a property is Cuba’s official real estate portal. At Islasi, you can find a 447-square meter apartment (with five bedrooms and four bathrooms) at 341,000 CUC. You can also come across a ground floor, 508-meter square, three-bedroom apartment with two bathrooms in Alta Habana (municipality of Boyeros) at 130,000 CUC. Offers include the province of Matanzas: a house in the city of Cardenas costs around 20,000 CUC.

People like Yazel, who is tying to sell his home in Marianao, don’t understand such “disparities.” “What market should he go by, the informal one? How can one determine the value of a home?” he wonders.

The problem is that government authorities value properties in regular Cuban pesos but all sales are effected in hard currency and at abysmally different prices. According to the law, the referential value is multiplied by 4 at provincial capitals and 1.5 in other municipalities.

This is a new process as, after years of restrictions applied to almost everything having to do with housing, the “prohibition” was finally lifted at the beginning of 2012. The norms, published in Cuba’s Official Gazette No. 35 (on November 2, 2011) specify that “one of the requirements is registering the property in the Real Estate Registry.”

The new legal norms eliminated prohibitions and established mechanisms for the sale and purchase of homes, donations and exchange of properties. They also established other mechanisms for the granting of home building and repair subsidies to low-income people and those affected by hurricanes and natural disasters, as well as the granting of credit to aid in construction efforts.

At the time, the aim was to “eliminate prohibitions, make procedures related to the transfer of properties more flexibile and aid in the voluntary re-arrangement of living conditions by property owners.”

This process led to a dramatic increase in the sale and purchase of homes and repair and construction efforts. However, the country’s housing deficit has not been overcome, particularly in cities such as Havana and Santiago de Cuba, where one out of five Cubans resides.

Understanding the “disparities” caught sight of in Cuba’s real estate market is a difficult task. Years will be needed to untangle this mess and for other issues to become cleared up, so that owning a home ceases to be a mere dream.