Cuba Property Market Open for Business

04 November 2011

The property world went mad this week when Cuba opened up its property market to private buyers. This is incredibly significant for Cuba, where many people are forced to live in squalor, unable to move because of the communist laws preventing property sales. While many would simply buy and sell on the black market, they did so in fear of consequences were they caught, and were often the victim of corruption and fraud.

 

Cuba's leader, Raul Castro, younger brother of the infamous Fidel Castro pledged to legalise housing by the end of this year and he has kept his promise. We can only hope that he is so quick to tear down the rest of the oppressive communist laws.

 

When Fidel Castro took power he immediately banned all property transactions, and passed ownership of properties onto their inhabitants. In the communist penchant, the state was to provide, housing, food, work and everything that the people would ever need.

 

Unfortunately this failed to materialise, and housing was one of the areas where the government fell shortest. Not least because the US embargo put a stranglehold on building supplies. Existing stock deteriorated quicker, and new construction failed to keep up with demand.

 

In legalising house purchases, Raul Castro has taken the biggest step away from communism in 50 years. With the sale and purchase of property legal, we can expect to see the chronic housing shortage starting to ease, employment being stimulated via increasing construction, and of course increasing tax revenues, which will hopefully pay for further reforms.

 

"With a housing market, suddenly people have some wealth and that’s a stake in the economy that generates activity,' said Ted Henken, a Latin American Studies professor at Baruch College in New York. He added: 'This is a very positive step in the right direction.'

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