Is Panama Still A Great Place To Make Money In Real Estate?
Panama City’s Ever Expanding Skyline
Panama has once again been chosen to top another list of great places to invest. This time it made the top spot for long-term investment along with – Albania. For a number of years now Panama has made the top spot in many lists including safety and investment.
Some of these lists have been proven to be fake. Often times lists are dreamed up by companies looking to further their own agenda. This most recent list was created by Property Wire, which bills itself as the premier global property news service.
What I found most interesting about the article was that one reason they give for placing Panama so high on the list is because property values have been growing at 25% per year. Does the author of this study honestly believe that amount of growth can continue indefinitely? Yes, property values have increased substantially over the past couple of years, but from what I’ve seen the ever increasing real estate prices have started to discourage people from investing here.
A condo that would have sold for $100,000 two years ago is now selling for double. That’s great news if you were one of the many early birds that took advantage of the rock bottom prices. It’s not such great news for the many, many people that bought later on in the game and now can’t sell their properties because there are so many on the market. Of course people are still buying properties in Panama, but the good old days of super cheap real estate are now over.
Panama was a property speculators dream a few years ago, now there are fewer areas of the country where you can find a great investment with the potential to make money on a flip. Panama City developers are still building high rise condos, but the market won’t be able to hang on forever. The Property Wire article mentions that more Americans buy a retirement home in Panama than anywhere else in the world. Have Panamanian developers heard there is a real estate and economic crisis currently taking place in the US? If a person can’t sell their home in the US, they probably can’t afford to buy a retirement property in Panama, but the skyline continues to expand.
Panama does have many great draws for foreign investors including the canal expansion, the official currency is the US dollar, Panama is one of the safest countries in Latin America, and of course the cost of living is less than in North America. These are all great reasons to visit, retire or buy a second home in Panama, but is Panama still a great option for long term investment? I suppose only time will tell.
| Written by Rebecca Tyre |  |
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Filed under: Living & Retirement, News, Real Estate on July 21st, 2008
thank you for this post. there is an article in today’s La Prensa that basically states that the entire cost of the Cinta Costera will be passed along to condo owners(mostly gringos and other foreigners) that are buying along avenida balboa, bella vista, punta paitilla, and punta pacifica. calidonia is also mentioned but those people there are broke.
the government is going to place some sort of tax assessment that will certainly be in the many thousands of dollars per unit owner. when this news finally reaches the pre-construction buyers of these condos there is going to be hell to pay.
i wonder who gets sued when the condo buyer takes delivery of a unit thinking he/she was going to have 20 years of tax exoneration and then suddenly receives a special tax assessment for $10,000 in the mail. does the developer get sued? is it the real estate agent? the agent’s broker? is it the promoters of the real estate fairs? the seller of a resale unit?
there are murmurings that other special assessments are to follow to upgrade the electrical grid, water/sewer systems, etc. something tells me that there are soon going to be thousands of very unhappy foreign condo owners and an equal number of very happy lawyers in panama city.
Hi Rebecca,
I enjoyed reading many of your stories.
I look forward to my visit of Panama soon.
Thank you, Jered.
Sorry, but Panama was never a great place to make money in real estate. If you’ll do your research, the Panama real estate market, since the late 1970’s, has been the result of money laundering activities. Selling and reselling real estate investments has, for the past several decades, been a method of choice to clean dirty money — one shell company sells it to another. When you look at the GDP of Panama and the PCI of the residents, then look at the skyline, anyone with a basic knowledge of financial crimes would get the picture. This is not to say that all transactions in Panama have an illicit base, but those rooted in dirty money are substantial.