the real estate bust here in panama is only beginning. nobody really knows how many empty apartments there are or will be here in the city. nobody knows how much of the buying in the last 3-5 years was speculative rather than for end-users.

there has never been a building binge in panama quite like what we’ve seen in the last few years. i’m unaware of anything like it in latin america. if you look at the debacles unfolding in miami and dubai right now, you have to be concerned about panama. prices in miami are half what they were three years ago. dubai prices are in freefall where there are virtually no buyers at all.

the developers, promoters, speculators, banks, agents, etc. have, in my humble opinion, drastically over-estimated true market demand for luxury apartments in the city. they believed their own hype and ignored basic fundamentals about supply and demand. that’s what greed will do to you. it blinds.

the real estate industry got more than a little carried away in the past few years. perhaps most importantly, the industry never focused on the rights of the consumer. now, stories about fraud, stolen deposits & unfinished projects are multiplying. when a happy buyer closes on a home he tells one or two other people. when a developer steals a deposit from a buyer, that buyer tells ten or twenty other people.

panama won’t feel the full brunt of the coming storm until all of those fancy apartments are built-out. then we’ll see if anyone moves into these projects, what happens to prices, and what happens to other nearby sectors and niches like casco viejo.

gregorio, el gringo