Cuba's new real estate market

Brookings just published (pdf) a paper of mine on Cuba’s new real estate sector, which represents one of the most interesting new features of the Cuban economy.  After decades of limited, in-the-shadows transactions, a November 2011 law ended the prohibition on simple sales of residential property.  The result is a market where demand is bifurcated between those with normal incomes and those with high incomes or relatives abroad interested in making a purchase, and there is no mortgage finance to smooth over the difference.  Information is imperfect in this market, but in its way it’s a vibrant market with brokers operating on foot and on line, and money coming in from abroad.  A by-product of this change is that Cubans are registering their property titles in large numbers regardless of whether they intend to sell, and transactions carried out illegally in the past are being legalized and properly documented.  If you count property rights as an element of human rights, this is a step forward.  A property title only has full meaning if you can liquidate the asset it describes, and Cubans can now do that.