Cuba’s Monetary Unification Slows the Sales of Homes

“There is no one to sell to,” lament the owners who offer their houses in the dull Cuban real estate market. (14ymedio)

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14ymedio, Havana, 31 January 2021 — “No one here to buy and sell?” asks the clerk of the notary’s office on 20 de Mayo Street, in Havana. Clients are waiting to make a will or formalize a power of attorney, but requests for procedures related to housing have disappeared from these offices since the monetary unification. The uncertainty surrounding the Cuban peso brought the island’s real estate market to a halt.

If until a few months ago most of those who lined up at Cuban notaries hoped to formalize the donation of a property or the sale of a house, now the most demanded procedure is “the power of attorney so that a relative can represent the owner in case that he leaves the country,” a worker at this notary’s office in the neighborhood of El Cerro told 14ymedio.

“For a couple of years we began to notice a decrease in the number of sales that we manage every day,” acknowledges the employee who preferred anonymity. “With the pandemic it also decreased a lot, but what has happened since the beginning of the year doesn’t have to do with the coronavirus but rather with monetary unification. People are afraid to sell in Cuban pesos (CUP).”

Fears of a devaluation of the national peso run throughout society but are felt most strongly in commercial operations that involve large sums of money. Although the authorities have imposed a fixed exchange rate of 24 pesos for every dollar, in the informal market the US currency is already priced at between 47 and 50 CUP.

“So there is no one who sells,” recognizes Ulises Brito, who for more than a year has been trying to sell a four-bedroom house in the Playa municipality “equipped with everything to function as a vacation  rental.” With residence in the United States, Brito repatriated to the island a few years ago to open a thriving business to rent rooms to tourists, but things did not turn out as expected.

“The diplomatic thaw was shipwrecked and my entire business was designed for the massive arrival of American visitors,” acknowledges the entrepreneur. “Then the coronavirus appeared on the scene and it is no longer worth staying here because this country is going to need a long time to recover and I cannot continue to lose money.” But after making the decision to return to the US, Brito has not been able to sell the house for months.

“I started asking for $80,000 and I’m already going for $65,000 but I can’t keep going down because the house is in very good condition and each room has a renovated bathroom, which cost me a lot of money to rebuild.” The man does not want to hear or talk about the Cuban peso. “The transaction has to be done in dollars and the interested party must deposit the money in my US account. Nothing at all in national currency.”

On the Revolico digital site, where nearly 300 classifieds for the sale of houses are added every day, most of the ads are from sellers who have not found a buyer for their home for months. The economic crisis that continues to deepen on the island, the rise in living costs and the loss of purchasing power of broad social sectors linked to tourism have hit the real estate network hard.

Notary’s Office on 20 de Mayo Street, Havana. (14ymedio)

The current situation is very different from that of the end of 2011, when the government of Raúl Castro authorized the sale of homes after decades of prohibition and a frenzy broke out among many Cubans willing to acquire or get rid of a house. The measure was a starting signal in a country with 3,700,000 homes, 85% of them individually owned.

Less than two years after the decades-long sales ban was lifted, the emerging real estate market reached some 80,000 transactions. Real estate agents appeared on the scene and opened private offices, which operated under a home exchange and sales manager license. But shortly after, many ended up in court when it was found that they charged the client a commission on the transaction, something prohibited by law.

In practice, those managers pocket between 10% and 25% of the total amount paid by the buyer, but legally they could only charge for the efforts to connect and inform people interested in carrying out this type of operation. The official onslaught against them ended with the closure of their offices and the real estate market moved again, mainly through advertisements on digital sites.

But even these hurdles had failed to dampen the home-buying enthusiasm that gripped a country with a deficit of more than 900,000 homes. It was the “Ordering Task”*, with the disappearance of the convertible peso and the rise in the costs of basic products and services that has dealt the hardest blow the sector has had since it was authorized a decade ago.

“I left a power of attorney for my sister to sell my apartment in the city of Santa Clara,” Carlos Luis Alonso, a Cuban stranded in Mexico for a year, comments to this newspaper. Together with his wife and a five-year-old son, the migrant dreams of finding a buyer for his home who can deposit the money in a Mexican bank account and use those funds to reach the United States.

“In the house where we are staying there are two more Cuban families who are in the same situation: trying to sell a house in Cuba so that they will pay for it in real currency here,” Alonso details. “But no one has been able to sell anything because when they find a buyer, they want to pay them in Cuban pesos and that is paper, not serious money,” he laments. “I thought that having a house to sell meant having capital, but now I neither live in it nor can I convert it into the resources that I need.”

“Three-bedroom house for sale a few meters from the Old Square of Havana. Do not waste our time, only for buyers with dollars,” warns a classified that has been repeating itself every day for months in a Telegram commercial thread. “We do not accept Cuban pesos,” underlines the text he adds to avoid being confused: “Only with hard currency.”

*Translator’s note: The Tarea Ordenamiento (Ordering Task) is a series of government actions that include ’unifying’ the two currencies — the Cuban Convertible peso and the Cuban peso — resetting wages and pensions, resetting prices, and other measures.


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