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(EMAILWIRE.COM, February 17, 2009 ) While Cuba still remains off-limits to Americans, there is a heated debate on whether or not Obama's administration should scrap the half-century old embargo on the island nationÂ…
After all, Fidel Castro no longer holds the reigns of power and his brother Raul seems to be ready to relax the Communist Party's grip on the economy.
That said, save another revolution, change in Cuba is likely to come very slowly. However, this has not stopped many investors from keeping a close eye on Cuba.
That the island has attracted real estate speculators shouldn't be a surprise. After all, Cuba is a beautiful country whose natural and cultural landscape has not yet been lost to over-development. It has had a fascinating history.
Its people are mostly educated and have a strong sense of self. Cuba has received consistently high marks on the United Nations' Human Development Report.
Of course, the country also faces huge challenges. Its economy is in tatters. Its infrastructure is substandard. Worse of all, it faces an embargo from its biggest potential market, the United States. "Time pretty well came to a standstill following the Revolution in 1959," said Christopher P. Baker who authored, among five other books, ‘The National Geographic Traveler: Cuba.’ Not much visible development has taken place since then.
Real Estate in Cuba
"Most Cubans own their own homes, and some, such as tobacco farmers, own land, but sale is not permitted," said Baker. "Home-owners are permitted to exchange homes with Government approval on a like basis, that is properties must be similar." Still, this doesn't mean property transactions involving money don't take place.
The underground property market is thriving in Havana, the nation's capital, according to the International Herald Tribune. Prices are on the rise with as much as £36,000 changing hands. Speculators want to get a hold of historic homes with the expectation that private property will once again be the norm in the country.
Some of the home exchanges taking place are legal and deal with similar properties. Most, however, involve swapping for a bigger or smaller property, with the party getting the bigger place paying the party wishing to trade down.
Buying real estate in Cuba
"As a general rule foreigners are not permitted to purchase property. A single exception was made about 10 years ago, when condominiums in Havana were built for sale," said Baker who is considered a regional expert on Cuba. That said, there are about a dozen projects in the works that are planned with international buyers in mind. "These projects are golf course and marina developments financed through sale of residential units to foreigners."
It looks like the first of these new real estate projects to get Government approval will be The Carbonera Club, according to ‘Havana Journal.’
U.K.'s Esencia Hotels and Resorts Ltd recently announced they are taking applications for pre-launch property ownership opportunity at the club. The Carbonera will consist of 720 properties, among which will be various sized villas and apartments.
The development will also include, among other things, a hotel, a spa, sports clubs and a golf course. Because of the embargo, property purchasing at The Carbonera Club is not open to American citizens.
"Another project is at Bahia Honda, about one hour west of Havana and has received preliminary approval from the Cuban Government, but approval at the Council of Ministers' level is pending," said Baker. The Bahia Honda project will include three golf courses and a 500-slip marina.
How fast things will move depends partly on the Cuban Government and partly on factors that are out of the island's hands. The country hasn't recovered from the effects of the three hurricanes it suffered in 2008 and the world is heading fast towards a recession. These two factors alone could delay the above projects for the foreseeable future.
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-ENDS-
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