To follow up Obama’s restoration of trade relations with Cuba about a week ago, it seems worthwhile to look at other aspects of Cuba’s changing economy. The state of the real estate market in Cuba, specifically in Havana, has been on the rise as Americans and foreigners have begun to look for ways to purchase Cuban property. Some of the houses in Cuba are still owned by the government, but since 2011 the state has allowed homeowners to buy and sell property. Cuba law also prohibits nonresidents from purchasing property. But this doesn’t stop foreigners from getting a piece of this prime real estate.
Many Cuban-Americans and other foreigners who have relatives or friends living in Cuba use these connections to buy houses in the country. This sudden surge of demand has been one of the causes of increased housing prices in Cuba, where houses are now reportedly two or three times what they were three years ago. The reason for this surge is due to the openness of Cuba’s borders to Americans recent years.
There is still a travel embargo for Americans, but it isn’t difficult to get around this as there are 12 reasons of travel that allow US citizens to travel to Cuba. With travel to Cuba now being infinitely easier, there are more consumers flooding the real estate market. For Cuban-Americans this is way to return to old neighborhoods and regain Cuban citizenship. Other Americans see this real estate as untapped territory and the openness provides a chance for them to experience Cuba before tourism takes over the classic Cuban aesthetic.
The only potential roadblocks that these new homeowners may have to face are the poor infrastructure in Cuba and the risk of the government reversing private property laws. But the Cuban government has made measures to restore the infrastructure and even repair old buildings. If the private property laws hold then the Cuban real estate market could see a significant increase in demand. It becomes hard to judge whether this increase would be purely good for the Cuba. More Americans means more tourism and less of the authentic Cuban vibes. But tourism can be very healthy for countries struggling economically and more and more Cuba seems to be ready to receive new waves of international tourism.