Cuba’s Real Estate Market Shaken With End of Privileged Emigration to the US

Cuba's Real Estate Market Shaken With End of Privileged Emigration to
the US / 14ymedio, Zunilda Mata

14ymedio, Havana, Zunilda Mata, 16 January 2017 – The sign is still
hanging from the balcony. "For Sale," it says in big letters that can be
seen from the street. But Jorge no longer wants to auction off the
apartment on Emilia Street in Santo Suarez. With Barack Obama's decision
to end the "Wet Foot/Dry Foot" policy, this 52-year-old Havanan has lost
interest in obtaining, at any cost, the money to get him to the United
States.

The buying and selling and private homes was authorized in Cuba at the
end of 2011, after having been prohibited for decades. Decree-Law 288,
approved at that time, allowed the transfer of property between both
"Cuban natural persons living in the country," and "permanent foreign
residents of the national territory."

After the authorization, numerous private real estate companies emerged,
and a flood of classified announcements inundated the housing sections
of digital commerce sites such as Revolico, Por el Techo, Cubisima and
Casas Cubanas. Many of the property descriptions include, "Selling to
leave, I'm in a hurry."

"They are more likely to lower prices and accelerate the whole process,
because they need the money as soon as possible"

"The housing market has been fueled largely by houses whose owners have
plans to emigrate," Juan Alberto Fonseca, an economist and manager of a
small office in Vedado that helps interested people sell or buy a home,
tells 14ymedio.

"That motivation makes them more likely to lower prices and accelerate
the whole process, because they need the money as soon as possible,"
says the specialist. The end of the program that allows Cubans to
automatically obtain residence in the United States "will directly
influence the number of houses in the market," he says.

Since the implementation of the immigration reform in January 2013, some
671,000 nationals have traveled abroad. Of these, 45% have returned to
the island, and of the rest, according to figures released this week in
the daily official Granma, many have not yet been gone longer than 24
months, the maximum time away that had been set in the law if a citizen
wanted to maintain the right to reside in Cuba. (Prior to the reforms
the maximum time Cubans could remain outside the country while keeping
the right to reside in the country was 11 months and, under the new
agreement with the US, the Cuban government has said it will extend that
time to four years.)

Official figures do not specify whether travelers or emigrants have paid
for their departure from the country with the sale of a car, a house,
land or other properties such as appliances, jewelry or a cemetery
plot. It has become common in recent years to exchange one's possessions
for an amount that will allow emigrants pay visa fees, tickets,
transportation and payment to the coyotes that lead to the US border.

"We have sold everything, we can not go back," says Charly Medina, a
Cuban who was stranded in Turbo this week and received "like a bucket of
cold water" Washington's announcement that it was eliminating the
immigration privileges enjoyed by the islanders. "With the sale of our
house in Santa Clara we were able to get here, but we do not have
anything else," he explains.

Charly's story is also the story of many of those who have stayed on the
road to the United States border. If they were deported to the Island
they would face the harsh reality of not even having a place to sleep.

"So far we have not noticed a drop in the number of houses for sale, but
we are preparing for this measure to have an impact on the market," an
employee of Zafiro Real Estate, located in the suburb of Miramar,
tells 14ymedio.

The real estate agent predicts that many will remove their homes "from
the listings, so it is possible that there will be a rise in prices in
the coming months." However, she believes that in the short term little
will change. "The vast majority of those interested in emigrating do not
yet believe that the United States will strictly uphold Obama's
provision," she adds.

The latest official figures, which are for the year 2013, indicate that
the emerging real estate market reached about 80,000 transactions that
year, double that of the previous year, according to Aniuska Puente
Fontanella, a specialist at the Registry Office for Property, Commerce
and the Heritage of the Ministry of Justice.

The practice of two-part payments, the first in Cuba in convertible
pesos (CUC) and the second in dollars or euros in the destination
country of the seller, has become common in the national real estate
market. The law, however, states that transactions must be made in Cuban
pesos (CUP) or CUC.

Each property's title establishes a minimum reference value in CUP for
the dwelling. That is the value that is usually stated during the
purchase transaction and, on that amount, the buyer pays a 4% tax on the
transmission of goods and inheritance and the seller the same amount on
personal income. However, the actual transaction is made for an amount
that is often ten times the declared amount.

Economist Juan Alberto Fonseca explained to this newspaper that "many
owners prefer that part of the money be delivered to their family in
Miami, Madrid or any other city to avoid having to take too much cash
through the airport if they are going to emigrate."

Source: Cuba's Real Estate Market Shaken With End of Privileged
Emigration to the US / 14ymedio, Zunilda Mata – Translating Cuba -
http://translatingcuba.com/cubas-real-estate-market-shaken-with-end-of-privileged-emigration-to-the-us-14ymedio-zunilda-mata/