Monday, July 18, 2011

The real estate market on Prado

Cuba has a residential housing market, but it is truncated, distorted, and driven partially underground because the law permits trades, but not simple sales of residential property.

It’s perfectly legal for Juan to trade his three-bedroom apartment for Jose’s one-bedroom, and to go to the lawyers to transfer titles accordingly. What is not so legal is for Jose to also pay Juan money on the side to compensate him for giving up the property of higher value. Nonetheless, that’s the story of the Cuban real estate market, and it has been for some time.

For many, the process begins Saturday mornings on the Paseo del Prado where buyers and sellers meet in the boulevard’s shaded pedestrian walkway with signs, sales pitches, floor plans, and the occasional photograph of a property on offer.

I wonder how this marketplace will change when simple sales and purchases of homes are legalized, as the government has promised to do before year’s end. (See Reuters story here, earlier discussion here.) Will it come to an end? Will it expand? Will it become more a gathering of brokers than individuals? Will not-quite-legal agents and brokers spring up? Will a simple website make those Saturday mornings a quaint memory?

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