Would it be madness to invest in a Communist state? It might raise a few eyebrows, but the opportunities are out there. With its crumbling colonial architecture, little changed since the days of Ernest Hemingway, and streets full of battered 1950s Buicks and Chev-rolets, Cuba has long been caught in a time warp. Yet there is change in the air: now that Fidel Castro has finally gone into retirement, the Communist regime is loosening its grip, and recent events in the USA led to a softening of Washington’s nearly 50year-old embargo.
Yet would you really want to invest your hard-earned money in a home in one of the few countries left on earth that - in theory, at least – still espouses Marxism-Leninism? Andrew Macdonald, an entrepreneur who has worked on a variety of projects in Cuba and across Latin America for more than a dozen years, is hoping the answer will be yes or "Si".
The island’s 11m people are still counting the cost of this year’s hurricane season, which has already been more than devastating than most, but Macdonald insists the long-term prospects are good. “It’s the Caribbean plus much, much more – like romance,” he enthuses over mojitos in the London branch of his chain of El Floridita bars, which take their name from one of Hemingway’s favourite watering holes in Havana. “It’s cultural, it’s glamorous, it’s exotic – Cuba has influenced the whole of South America, and reinfluenced Spain itself.”
Keen to take it's tourism industry upmarket and away from the all-inclusive tours with which it has hitherto been associated, the Cuban government this year announced plans to build nine golf-centred complexes on the island – which is almost the size of England – and, inspired by the success of such resort developments elsewhere in the world, decided to add residential property to the mix.
The Carbonera resort, which Macdonald’s company is developing, will be the first of the nine and set to be completed in 2011. And, in a move that may leave Castro’s more ideologically rigorous compadres choking on their Cohiba cigars, the properties will be situated in that most yanqui of institutions, a “country club” – and a six-star one to boot, with a marina close at hand.
The development will be about an hour’s drive east of Havana, near Vara-dero, the beach resort at the centre of Cuba’s drive into package tourism. It will be on a considerable scale, with 165 villas, ranging in size from 360 to 500 square metres, and 650 one, two- and three-bedroom flats. With prices expected to be set at about 1500 a square metre when the project goes on sale in November 2010, through Savills, an entry-level one-bedroom flat should be considerably cheaper than elsewhere in the Caribbean.
As well as Britons and other Europeans, the project is aimed at Canadians, who do not face restrictions on visiting the country and have become a mainstay of its tourist industry. It may appeal to Americans, too – especially those of Cuban origin – even if the boycott prevents those who live in the United States from buying in their own name.
That the authorities are allowing foreigners to buy at all is a sign of how far Cuba has come since the collapse, over 17 years ago, of the Soviet Union, which deprived Castro not only of ideological inspiration, but of his country’s main source of financial support. One of his first acts after seizing power in 1959 was to expropriate private property – putting his regime on a collision course with Washington, which has maintained a hard line against Havana ever since.
Macdonald insists property rights are safe these days, although, for the time being at least, the properties will besold on 75-year leases rather than freehold. This could change in the next few months – Macdonald says discussions are being held with authorities about “the most appropriate mechanism”.
Still, the time when British or other overseas buyers can pick up a flat or house outside designated areas such as Carbonera remains a long way off. Although the constitution now allows private property ownership, and the majority of Cubans own their own homes, they are not allowed to buy or sell them to each other, let alone to a foreigner. Instead, they can merely “swap” them – though money inevitably changes hands with such deals, albeit unofficially.
Cuba a step too far?
If you’re after sun and sea, though, is it worth looking at Latin America at all when you could buy in one of the more established Caribbean destinations, or in Thailand, or perhaps Dubai?
John Howell, senior partner in the International Law Partnership and a veteran of the foreign property scene, expects the housing markets of Nicaragua and other countries in the region to benefit from a “creeping American-isation”, boosted by the desire of that country’s baby-boomer generation to find somewhere warm – and cheap – in which to retire.
Cuba, however, remains a special case, Howell believes – especially because there is no guarantee that the country will experience the gentle transition from communism to capitalism enjoyed by the Soviet Union’s erstwhile eastern Europe satellites. “It’s a fabulous place, and will come right in the end, but it’s cheaper than the rest of the Caribbean for obvious reasons,” he says. “If I had a pot of fun money I could afford to lose, I would buy there, but it’s not the place to invest your life savings.”
Legal Advice
It is advisable to obtain qualified legal advice when purchasing a property. In some countries it is mandatory to make a property purchase through a legal representative. Your legal advisor will advise on the title of the property (its' legal ownership and any restrictions) to ensure you are getting exactly what you are paying for. In addition information can be obtained regarding any planning/building restrictions or permissions affecting the property. Planned developments for the area surrounding your property may also affect your decision to proceed with the purchase and your legal advisor should be able to obtain this information on your behalf.
After reading all of this and you still want to live in the land of the Old man and the Sea, here is a link to Cuban-Realtors.
http://www.homegain.com/Buyer/NM/Cuba-Realtors
