Our report on the real estate market in Panama City 2020 / 2021 describes the trend of the real estate market in the exceptional Corona year 2020 and takes a look at Panama’s real estate in 2021. As in the previous year (Report 2019 / 2020) we only report about high quality real estate in prime locations in Panama City, which are located in the UNESCO Old Town “Casco Viejo”, in the promenade street “Avenida Balboa”, in Punta Pacifica and on Ocean Reef. Because these are the locations in which we are active ourselves and can report on prices & rents realized by us.

Those who wish can use the following link to learn about the main events and the historical real estate market trends in Panama City over the last decades.

Anyone who has ever been to Panama City will have noticed that the skyline and thus the supply of residential real estate is huge. That is why we have always focused on unique, hard to duplicate locations with good quality. These are stable in value and easy to let.

The year 2020 had started very well for the real estate market and the economy of Panama. The new Panamanian government had only been in office for six months and new major projects were in the starting blocks (including the city beach Panama City, the fourth bridge over the Panama Canal, the third metro line, and the new cruise ship terminal). In addition, Panama’s copper mine had just gone into operation and the old town “Casco Viejo” was full of large groups of tourists.

And then the corona virus came to Panama…and everything was stopped.

The Panamanian government took a strict course against the virus from the beginning and implemented a hard lockdown of the country from mid-March on. This lockdown was gradually relaxed from mid-June and finally ended on October 12th with the opening of the international airport and tourism.

• Due to the month-long lockdown, which also applied to the real estate industry, there were hardly any sales during this period that could be used to determine a trend for prices.
• Since the beginning of October, furniture stores have been well visited again and many are sold out. Confidence is back.
• However, the Corona-related higher unemployment in Panama will probably affect prices and rents of C and D properties (lower quality locations).
• B properties (medium to good locations & qualities) have proven to be quite crisis resistant in terms of both prices and rents.
• Prices in prime locations in Panama City are at about the same level as before. Owners are not willing to sell at really lower prices. Of course, there are always exceptions, but a trend cannot be seen.
• At the same time, the Corona credit moratorium was recently extended until June 2021, which is why credit-financed real estate is not under stress. In general, the credit share of real estate in Panama is quite low, which makes it less vulnerable to crises.
• Many expats (employees of multinational companies / tenants for A-locations) had temporarily returned to their home countries during the Panama lockdown. During the lockdown it was difficult to find new tenants and to arrange viewings. Therefore, rents for new leases for A-locations have fallen 10-15%. Expats have been returning to Panama since the reopening of the airport in October, which is again supporting rental demand and is already noticeable.
• Since October we have also been seeing international buyers in Panama again. These come from Europe and we ourselves are seeing, for example, increased demand from German-speaking Europe for applying for second residences in Panama and opening bank accounts.
• In addition, our real estate partners in Panama are reporting increased interest since the reopening of the airport from wealthy people from South America (including Argentina, Chile and Colombia) who, due to various crises in their home countries (often accelerated by the Corona crisis), consider USD real estate in Panama as a “safe haven”. The Bloomberg report (info link) published a few months ago, which reports on the escapes of millionaires from the countries of South America to Panama and other interesting locations, also fits in with this.
• Panama is regionally in a very good position for a strong recovery in 2021. The recovery will be slow, but has already begun. And as long as Panama remains a stable and safe country due to its international importance, this recovery is likely to occur much faster than in other parts of Latin America
• The above mentioned mega infrastructure projects will bring new labor force and thus rental demand to Panama.
• We continue to buy real estate in Panama City in a prime location in the first row by the sea at approx. 2,300 – 2,500 USD / sqm and rent it out furnished in Corona times at approx. 12 – 14 USD / sqm (previously 14 – 15 USD). If the rental market remains at the lower level for a longer period of time, purchase prices will probably also be adjusted accordingly.
• The purchase of smaller apartments (40-70 sqm) in A-locations can be interesting in times of crisis, because the rental budgets are in general smaller. These are also available in buildings with CoWorking areas (Offer-Link).
• At the same time 2-bedroom apartments keep their attractiveness, because you can integrate your home office very easily.
• An increased demand is currently experienced by beach apartments near Panama City, because you can also work from there in your home office (info link).

However, Corona also offers opportunities.
With the island project “Ocean Reef” (info-link) they offer buyers among other things guaranteed USD rental income of 6% annually after costs. Even during the Corona Lockdown, many properties were bought here even before construction began, since people feel more relaxed on the islands than in the city center. “Ocean Reef” is the most successful real estate project in Panama City. The quality and location of this island property is unique in Latin America, as it is located directly in front of the center of Panama City, but due to the island location, one can enjoy its tranquility.

Also in the UNESCO old town “Casco Viejo” (Info Link) the purchase prices remained approximately on the level before Corona. For used properties in good locations you pay about 3.000 – 3.500 USD per square meter. The renovation works in the old town are running at full capacity again and new beautifully restored colonial buildings are being built. However, many stores and hotels that depend on tourism are still closed and this affects the attractiveness of the old town. Nevertheless, the Corona pandemic has also brought an advantage here. Because in the old town, whose narrow streets are often congested with cars, certain streets are now closed off at set times so that restaurants can use the beautiful streets for their tables.

Basically, the Casco Viejo is a very unique and stable value real estate location, since the approximately 850 buildings on the peninsula in front of the skyline cannot be duplicated.

The plan for an city beach in Panama City, which was initiated last year and would have significantly increased the attractiveness of the entire city, is not being realized at the moment. Instead, a viaduct bridge road will be built to connect the promenade road of Panama City with the Causeway (Pacific Island Road in front of the city).

Panama serves as a “safe USD haven” for investors and companies in Central and South America. Current crisis in the neighboring South American countries reinforce this effect. Exactly for such wealthy investors from South America, Panama has created a new investor visa, which promotes foreign direct investments in Panama and at the same time grants a residence permit under certain conditions. Whoever wants to invest in the region of Latin America will not be able to ignore the Panama location in his considerations right now.

As in the past, Panama’s objective is therefore to emerge from the crisis better than its neighbors and to remain the more attractive and safer country for investors.

And in times when there are political and regulatory developments in Europe and the USA that do not appeal to every investor, Panama will continue to be an attractive location for asset diversification. We are also happy to assist you in applying for a second residence in Panama (info link).

Property prices in Panama City (A-locations) have historically often followed the trends in the USA (e.g. Miami) and these have risen strongly this year. During the Panama-Lockdown this was not possible, so there is a certain need to catch up.

Although the purchase prices for 1A real estate in Panama City are roughly at pre-Corona level, I advise every buyer to negotiate the seller’s price nevertheless. If you don’t need a loan, but can pay directly with equity, you have a very good basis for negotiation. We are happy to help with our experience in this context.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

According to Forbes, Panama City is the real estate market on the American continent where an investment will pay off fastest after the Corona crisis. Forbes calls Panama City the best example of a city on the continent that has created its own stable brand. In its report, the magazine analyses foreign real estate as an investment and sees very good opportunities for real estate in Panama.

This is due to the fact that Panama City is the regional headquarters for hundreds of multinational companies and a true business and financial center. As a result, there is a rich and diversified pool of buyers and tenants from all over the world. In addition, Panama’s economy is supported by the Panama Canal, which generates about 40% of Panama’s GDP.

Please find the Forbes report by clicking on the link.

Real estate in Panama is very diverse. No matter if it is a pure capital investment or if you want to emigrate to Panama. The following link provides a good overview.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

In my podcast we talk about the opportunities and risks of real estate in Panama, but also about the economy, the country and its people. Just click on the following link to listen.

The real estate market in Panama is very diverse. No matter whether it is a pure capital investment or a new residence. The following link provides a good overview.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

We expect real estate prices to rise in Panama City. Since 2016, the real estate market in Panama City has been characterized by a buyer’s market, which allows investors to generate interesting real estate returns. In our article we would like to explain what is currently changing and why we expect rising prices.

In modern city districts, we concentrate on very special locations where hardly any building land is available. These are the Pacific promenades in Panama City with unobstructable views of the sea and the entrance to the Panama Canal. We select the properties according to their micro-location, the quality of construction and rentability. In the UNESCO colonial old town “Casco Viejo” there are basically only about 850 houses on a peninsula, of which about 50% are already renovated or under restoration. Due to the nature of the peninsula, the supply of real estate here is naturally limited. The properties have a great potential for appreciation and we concentrate on details that are in demand (quiet locations, balcony, parking space, etc).

Based on the following points, we expect property prices in Panama City to rise:

• We only buy in the special locations mentioned above, which cannot be expanded due to lack of building land.
• Since 2016, we have had a buyer’s market in Panama City which allows us to buy in prime locations in the modern city at around 2,500 USD per square meter and to rent at around 14-15 USD per square meter. Like every economic cycle, this one will come to an end and we are currently seeing new international investors discovering the real estate market in Panama City, as they can no longer generate interesting real estate returns in their home markets. Here our real estate market report Panama City 2020.
• Due to the worldwide unstable political situation many wealthy families are looking for safe international USD locations. Panama is one of them.
• In the past, political unrest in South America has often led wealthy families to bring their assets to Miami or Panama. Both Spanish speaking, legally secure and with the USD as currency. Whoever wants to invest in the Latin American region will have Panama on the agenda right now due to the lack of alternatives. Under the following link you will find the consequences of the South American crisis for Panama.
• The current crisis in South America is leading Panama to further expand its status as “Hub of the Americas“. More than 250 multinational corporations appreciate the security and geographical location of Panama as headquarters for their Latin American business. In 2019, more new groups have once again set up headquarters than in the previous year.
• Directly in front of the skyline, a city beach (info link) modelled on Rio de Janeiro is to be built, which should greatly enhance the value of the properties.
• Further large infrastructure projects in Panama City will be completed in 2020 (cruise terminal, congress centre, airport terminal) and will bring many new people to Panama. With Metro Line 3 and the new Panama Canal Bridge, new projects will start in 2020 (info link).
• In 2019, one of the world’s largest copper mines started operating in Panama, which will further support the already strong GDP growth.
• Since 2002 Panama has been one of the fastest growing countries in the world economically. It is good to invest where economic growth already exists.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

Our report about the real estate market in Panama City describes the trends in real estate prices in Panama City in 2019 and gives an outlook for the year 2020. Since the real estate market in Panama City is very diverse, we concentrate in our report on the locations and qualities in which ourselves and our customers are active as buyers. These are the prime locations in Panama City, located in the UNESCO Old Town “Casco Viejo”, in the promenade street “Avenida Balboa” and in Punta Pacifica. These are basically residential properties of very good quality in unique locations.

To understand Panama and the real estate market in particular, it makes sense to use the following link to familiarize yourself with the main events and historical real estate market trends in Panama City. The following real estate prices in Panama City are prices & rents realized by us and/or our customers in the year 2019.

We concentrate on the locations and districts mentioned because they are unique, stable in value and good to rent.

Apartments in the promenade street “Avenida Balboa” are characterized by the breathtaking view of the Pacific Ocean, the islands and the ocean tankers waiting for the entrance to the Panama Canal. They are close to metro stations, workplaces, shopping malls and are therefore popular with the multinational companies in Panama and their employees who are looking for apartments to rent in Panama City. Panama City is the headquarters of 250 multinational corporations. Most of these companies control their activities in Central and South America from here.

We concentrate on the best quality residential towers in relation to construction quality, property management and amenities. The same applies to selected properties in Punta Pacifica. Properties in the prime seaside locations in metropolises are in demand all over the world and will remain so in the future, as the supply is limited.

We are currently seeing a buyer’s market that, with the right strategy, delivers very interesting return figures. While many locations in the world have to struggle with high purchase prices and correspondingly low rental yields, we buy in the first row at the Pacific for approx. 2,300 – 2,500 USD / sqm and rent furnished for approx. 15 USD / sqm in the prime location mentioned above. This enables us to achieve gross rental yields of approx. 7% in USD in the fastest growing country in the western world.

In general, the supply of living space in the modern city has grown strongly in recent years, which has led to falling prices in some locations. As described above, we focus on a specific part of the Panama City property market, where supply is limited and demand good.

In these locations, the prices for buying and renting have not changed significantly since 2018.

Panama City Town Casco Viejo

Directly in front of the skyline of Panama City you will find the UNESCO Old Town “Casco Viejo” (Info Link), where about 850 buildings are listed as UNESCO World Heritage Sites. Many years ago, the Old Town was considered the most dangerous part of Panama City. But with the beginning of the restorations of the beautiful colonial buildings since 2003, the Casco Viejo has successively transformed into a very charming and popular district, in which meanwhile about 50% of the buildings have been restored or are under restoration. As the buildings vary a lot in terms of location, floor plan, quality and equipment, it is much more difficult to name flat purchase prices and rents. In some streets of the old town of Panama City it can be very noisy due to restaurants, renovation work and traffic, whereas in other locations you can enjoy the charm and peace of the old town on your own roof terrace. It depends very much on the right choice of property. Since the number of buildings on the peninsula is naturally limited, it is basically a very unique and stable property location. In our preferred locations and qualities within the old town of Panama City you pay for used real estate approx. 3,000 – 3,500 USD per square meter and rent at 14-18 USD. New restoration projects are much more expensive and usually range between 4,000 – 5,500 USD per square meter.

Ocean Reef Panama City

Outlook for the year 2020

Since July 2019, the new government of Panama has been in office (Info-Link) and here people are waiting for the new projects that promote the economy and bring new workers to Panama. These have a positive influence on the real estate market in Panama through their rental demand. Among the most important major projects are the construction of the fourth bridge over the Panama Canal, on which Metro Line 3 will run and connect the districts on the other side of the canal with the city center. Construction is scheduled to start in 2020. The first cruise terminal and the new exhibition centre in Panama City will also be completed in 2020. Both will lead to a strong increase in foreign visitors to Panama City. The economy will benefit from this and new real estate investors will arrive in Panama City.

And of course the planned beach for Panama City, which would significantly upgrade the attractiveness of the entire city and have a significant impact on real estate prices on the Pacific Promenade (Info-Link).

Panama serves as a “safe haven” for investors and companies in the USD region. The current crisis in the neighboring South American countries reinforces this effect. Rich people in these crisis countries are looking for safe USD investment locations such as Panama for their capital. And those who want to invest in the Latin American region will probably also have Panama on their agenda right now for lack of alternatives. As real estate investors, we are noticing this these days, as we are facing increasing international competition when buying real estate in Panama. However, this should have a very positive effect on prices.

Here is our report “The impact of the South American crisis on Panama“.

In Panama, one of the world’s largest copper mines went into operation in 2019, which will further support the already strong GDP growth. So far, the raw materials sector has had little impact on the Panamanian economy. This will change in the future.

Panama’s population is very young with an average age of 26 years (Germany 44 years) and the population is growing with 2% p.a. (Germany 0.2%). As a result, purchasing power will grow again and the demand for residential properties will increase.

Besides all the positive facts, Panama’s economy continues to struggle with the following difficulties:

• Poor education system of the population
• Reputation as a tax haven although Panama is no longer on the EU or OECD blacklist
• Lack of qualified specialists

According to the IMF, Panama’s economy is growing faster than most of the rest of the world. The economy and government are working to establish Panama as the “Singapore of Latin America“. As the geographical centre of the entire region for business, trade and logistics. These are important elements for the attractiveness of the investment location and the real estate in Panama.

Many of our investors use USD real estate investments in Panama to diversify their assets. Others, however, are also looking for another location outside the euro zone for their lifetime and at the same time apply for a second residence in Panama (Info-Link). Panama and its real estate market have so far been relatively unknown outside the American continent. Due to political developments in many countries around the world, international wealthy investors are increasingly looking for safe new locations.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama