Investing in Panama: Too Early or Too Late?
Over the past six years, I’ve poured my personal life savings into various businesses and properties Panama. Lately, I’ve had moments when I’m not completely sure WHY.
Now that this global financial crunch has turned many investor’s lives upside down, I’ve had my own time to pause and re-think my strategy for investing in Panama. I’ve made plenty of mistakes and have also enjoyed a few lucky breaks. But looking back and forward at the same time, I can’t help but question the timing of my investments and more importantly, measuring my ongoing desire to remain here as a businessman and investor.
Bear in mind, my perspective comes from having spent the last decade in Costa Rica, where I continue to operate a Costa Rica travel agency and a luxury rental villa. My business interests in Panama are similar, with a boutique hotel in Pedasi, a travel agency and a few small real estate investments. Here are the questions I’ve been asking myself lately and some of the conclusions I’ve reached.
Am I Too Early?
In some respects, I feel like Panama is in a holding pattern, and that industry that I know and love (tourism) is not yet ready for prime time. I’ve written articles ad nauseum about the challenges Panama’s tourism industry faces, with both a work force and culture that are not yet service-oriented. It’s hard to expect that land values, rental income or other real estate values will continue to rise if there is no solid tourism infrastructure to support it. In the meantime, too few entrepreneurs seem willing (or able, see below) to stick their necks out and create the business start-ups necessary to ignite solid, sustainable tourism in Panama. Until that happens, I’m still cashing checks from Costa Rica to support my labor of love in Panama.
Am I Too Late?
Sure, it would have been nice to have snapped up a former Canal Zone house for $40k or 10 hectares on the Azuero Peninsula for $.50 per meter 10 years ago, but unfortunately I wasn’t in the financial position to do so when I was 24, nor was I (or anybody I knew) that bullish on Panama’s future. For a lot of investors arriving today, I DO think they are too late to make a killing in real estate, but if they are patient and fill the obvious gaps with service-related businesses and other good ideas, they can create value. Prices SHOULD be dropping soon and then Panama real estate might become very interesting…again. Unfortunately, rabid speculation all over the country has led to prices that have shut out pioneers, hippies and young business folks who might actually invest their personal time, energy and passion into small businesses that foster tourism, which in turn facilitates real estate. Seems like in Panama we’ve put the cart before the horse and as a result, gummed up the works.
Are Prices Here Ludicrous?
In most cases, I think they are. I’ve heard plenty of arguments to the contrary, but aside from a lot of excitement and speculation, I’ve seen no massive changes in Panama over the last five years that merit the doubling and tripling of asking prices for all types of real estate all over Panama.
Is The Future Bright?
Despite all the gloom and doom analysis by other bloggers and serial commenters, I still have a lot of hope for Panama. Why?
Passionate Expats
Wise Locals
A Huge Head Start
Regional Examples
Strange Days Elsewhere
Conclusion
I’m staying put for at least another two years to see the new administration takes us, the exact moment we hear the City bubble burst and because well, I love it here.
| Written by Casey Halloran |  |
This post's rating:
(3 votes, average: 4.33 out of 5)
Loading ...Related Stories
It’s A Great Time To Fish In Panama
Is Panama Still A Great Place To Make Money In Real Estate?
Panama Vacation Horror Story
Costa Rica to Invest in Panama Ag Sector
Filed under: Business, News, Real Estate on May 4th, 2009
the air is just starting to come out of the bubble in panama. as a multiple listing service is absent here, most people can not grasp the subtle shifts that are taking place in terms of increased inventory, pressure on prices, number of days on market, etc.
it will likely take the cumulative weight of all of those skyscrapers being dumped on the City market over the next two years to finally sound the wake-up call for investors, whether local or foreign.
when the City market finally hits that saturation point, then people will finally “get it”. prices will head south, speculators will start walking away from deals, and we’ll all watch panama’s version of a miami or dubai-style collapse. it’s just a matter of time. the impending City debacle will spill over to the reverted areas and then on to land prices in the interior.
investors thinking about condo purchases should consider what can happen when only half a building gets sold or if half the buyers/speculators default or walk away. in such a situation, the burden of maintenace dues falls on those remaining owners in it for the long haul. in the u.s., it is not uncommon for dues payments to double in projects where there is a high foreclosure rate. something to think about.
I think that there are going to be some walk aways it happens everywhere, for example Punta Pacifica it`s too crowded, there are going to be major traffic problemas, you can see it today and there still a lot of apartments to be occupied; I really think that there are other opportunities to explote about Panama, if you think about it this country still very young when it comes to tourism, this takes years to develop and doing so we need to adjust in order to better ourselves in areas such as services, we have to work on culture, on customer orientation at all bases goverment and independents, Panama does not scape the world crisis that is taking place but it will come back and strong, other countries in the region have done it why can`t we, at least I am positive!!, Regards,
.Hello- Any idea about the need of talented RN’s in Panama? I know there is a massive shortage. here in the US, however my wife (also an RN) and I are plannng to move to Panama soon, Thank you for your reply————– JEFF
The market is going to get very interesting… Good deals on the heals of a crash.
RN’s make $40 a day…