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

Investors and entrepreneurs frequently ask me why they should invest in Panama. The background to this question is often that people don’t know much about this small country at the Panama Canal and that they have concentrated on their home market. And this although there is much competition and falling yields. In this article, I will look at the reasons why our investors invested in Panama. The main reason for them is often “diversification outside the euro zone”. This involves both investments in entrepreneurial projects and real estate in Panama.

(All info links with blue background are clickable)

Most people know exactly three things about Panama. Namely the Panama Canal, the story “Oh, how beautiful is Panama” and the Panama Papers. All three have something to do with Panama, but Panama is much more important for the world economy and has much more to offer investors.

Diversification
The economy, the real estate market and the stock market have performed well since the end of the financial market crisis in 2009. Especially the German market. This was the reason for many investors and entrepreneurs to concentrate on the domestic market, as yields were correspondingly attractive. For some time now, however, yields on German government bonds and first-class real estate have tended towards zero, and the stock market has also become more volatile in recent months. If you consider the weak growth forecasts of the European economy and the problems of individual European countries (Italy, France, Brexit, etc.), this is quite logical. In general, our investors all have a common reason for investing in Panama: Diversification outside the Eurozone. This involves the diversification of assets, the entrepreneurial portfolio and, in some cases, the life plan. Some of our investors no longer feel comfortable in Europe and are therefore establishing a Plan B. This means that they obtain a residence permit for Panama with our help and then often buy a property that can be rented out and used later by themselves. Panama has the USD as its national currency and is a very interesting country due to its political and legal security, which is why more than 250 multinational companies are based in Panama and most of them even have their headquarters for Central and South America. Companies such as Nestle, Adidas or the United Nations have done their country research and ultimately decided in favor of Panama. Under the following link you will find a good report on “Diversification”.

Diversification always makes sense, especially in politically and economically uncertain times. The only investor who should not diversify is the one who is always 100% on the right track! (John M. Templeton)

Yields
In Panama City in the prime locations the gross rental yields are approx. 6-7% p.a.
Modern apartments in Panama City on the Pacific Promenade are priced at approx. 2,500 USD per square meter and are rented at approx. 15 USD per square meter. Here you have an amazing view of the Pacific, the islands and the old town. This unique location naturally also applies to the historic UNESCO Old Town. In both parts of the city, the multinational corporations are looking for rental apartments for their employees so that you can achieve regular and attractive rental returns in USD. Population growth and average age are important aspects of investment, as both have a major impact on future purchasing power and demand. In Panama, population growth is about 2% p.a. and the average age is 26 years, which is very positive compared to Germany (0.2% / 44 years). The following links provide an overview of yields on international real estate markets and historical price trends.

Economy

• One of the fastest growing countries in the world
  (GDP growth since 2002 approx. 8% p.a. average / IMF forecast 6% p.a. for the next 4 years)
• Local currency is the USD
• There are 250 multinational companies in Panama; most of them have their Latin American Headquarters (e.g. Nestle, Roche, Adidas, DHL, but also the United Nations)
• Second largest free trade zone in the world
• Government debt is very low at 38% of GDP (vs. 86% in the euro zone)
• Panama’s economy is shaped by the service sector (about 75% of GDP) and benefits strongly from the mega infrastructure projects and the Panama Canal, which has another record year.
• In May 2019, the IMF reports on Panama’s economic quantum leap
• S&P raised Panama’s rating from BBB to BBB+ in April 2019
• Key economic figures for Panama

Politics
Panama is a democratic country where elections are held every five years and is considered politically stable. That is one of the reasons why international investors and companies have decided to invest here, because “an investment is only as safe as its country”. On 05 May 2019 the presidential elections took place in Panama. These elections have a big influence on the start of new major projects in Panama and are therefore very important for companies that are interested in doing business in Panama. Panama has made great efforts in recent years in the fight against money laundering and enacted various laws, so that Panama no longer appears on a black list. The European Union recently even decided to establish its diplomatic headquarters in Panama City.

Safety and security
Life in Panama is usually safe and normally you won’t get in touch with crime because Panama is considered the safest country in Latin America. This is also an important reason for the large corporations mentioned, because for them it is important that their thousands of employees feel safe in Panama. The following is still relevant in connection with security in Panama:

• Panama does not have its own military, because the USA protects the borders of Panama.
• Panama’s constitution protects private property for both domestic and foreigners
• The land register of Panama and the purchase procedure are very similar to the procedure in Germany.
• There are no hurricanes and no major earthquakes.

Life
In 2019, the company “International Living” once again voted Panama the best country in the world when it comes to the question of where to retire. They justify it with the unique combination of natural beauty, climate, standard of living, medical care and safety, which no other country has to offer in its entirety. In Panama City you will find hospitals at a high international level, as many doctors have been trained in the USA. You can find the full report at this link.

Besides all the advantages there are of course a lot of things that Panama should do better. These can be found in the previous link.

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

This “Real Estate Market Report Panama” gives an overview about the development of the last years and describes the current situation. In 2010 I started to focus on the real estate market in Panama and then in 2013 I made my first real estate purchase. After years of research and network building in Panama, my own real estate company “FRAPAN-Invest” started operations in April 2017 and at the beginning of 2018 we started together with “arsago Real Estate” to build up a real estate portfolio (link). In the meantime, we have successfully completed various property purchases and also manage the properties.

To understand Panama and the real estate market in particular, I start with the main events in Panama in the last century:

• 1903 / Panama declares itself independent of Greater Colombia with the help of the USA. At the same time Panama adopts the USD as its currency and the construction of the Panama Canal by the USA begins
• 1914 / Completion of the Panama Canal

The basis for a solid and sustainable economy was set by the introduction of the USD and the construction of the Panama Canal.

• 1977 / US President Carter and Panama General Torrijos agree that the Panama Canal and the entire Canal Zone will revert to Panamanian sovereignty and control
• 1989 / The USA deprived dictator Noriega of power and Panama decided in the referendum to surrender its own military and to place itself from now on under the protection of the USA
• 2000 / The USA hand over the Panama Canal to Panama and all associated rights and assets

Panama was established in 1903. However, the country was “reborn” after the takeover of the Panama Canal on New Year’s Eve 1999 / 2000. Because now the country was additionally entitled to the income from the Panama Canal and the new opportunities resulting from it. In the first three years, investors still held back, because they wanted to wait for the development of the “new” Panama.

Panama already had a considerable skyline before. But starting in 2003, a real estate and construction boom began, as a result of which a large part of today’s known skyline Panama City was created.

• Early 2000s / Establishment of the Real Estate Tax Law, which states that all properties completed by 31.12.2011 remain exempt from property tax for 20 years
• 2003 – 2008 / Construction boom and massive rise in real estate prices. Real estate investors from North and South America invest in Panama. Increase in prime locations (Panama City, apartment, ocean front) up to 3,000 USD / sqm
• 2008 – 2011 / Decline in real estate prices due to the international financial crisis and the oversupply of real estate to prices in the low of approx. 2,300 USD / sqm for prime locations. Due to the conservative business policy, Panama’s banks will not experience a crisis during the financial crisis, as they are not invested in “US subprime”.
• 2012 – 2016 / Recovery of real estate prices to 2,700 USD / sqm in 1A locations.
  April 2016 / The scandal of the “Panama Papers” shakes the country’s reputation and arrests it with prejudice. Although the “Panama Papers” do not have a major impact on economic growth (IMF forecast remains at around 6% p.a. for the next few years), real estate investors are holding back for the time being
• 2016 – today / Due to the Panama Papers and the completion of major real estate projects, prices tend to move sideways or slightly lower (currently approx. USD 2,300-2,500 / sqm). At the same time, banks are now also more restrictive in granting loans and opening accounts for foreigners, also in order to no longer appear on the OECD and EU blacklists

For real estate buyers and to build up our real estate portfolio, we currently find a buyer’s market in Panama which, with the right strategy, delivers very interesting yield figures. While most real estate locations in the world have to struggle with very high purchase prices and correspondingly weak rental yields, we buy in ocean front prime locations at approx. 2,300 – 2,500 USD / sqm and rent at approx. 15 USD / sqm. This enables us to achieve rental yields of approx. 7% (net approx. 5%) in USD in the fastest growing country in the western world.

Property developers are currently going through a challenging phase in Panama, as they are facing a weaker market with the completion of their projects. We are not currently buying from property developers, but are buying finished properties in attractive locations at lucrative prices. We select the locations and properties in which the employees of multinational corporations and international organizations are expected to rent and live. Panama City is the headquarters of 250 multinational corporations, half of which have their operational headquarters for Central and South America in Panama (Nestle, Roche, Adidas, Bayer, Total, P&G, etc). The third largest United Nations headquarters in the world is in Panama. It is from here that they manage their activities in Central and South America. These are our target tenants and also the current tenants of the purchased properties.

Rental prices have come back slightly in the last two years, but with approx. 15 USD / sqm in the prime locations are still very attractive. In Panama, people are waiting for new government-driven projects that will boost the economy, bring people to Panama and have a positive impact on the rental market. In Panama, the 5-year presidential elections will take place next year. Currently we are in the pre-election year, which historically is always a relatively weak economic year, as new projects are put on hold until the new government. This is how Latin America works…The IMF forecasts GDP growth for 2018 at “only” 4.6% after a 4-week strike by the construction union in May. According to the IMF, this will be made up in 2019 with growth of 6.8% and in the following years between 5.5% and 6%.

After diplomatic relations with China (Link) were closed in 2017, China is investing heavily in infrastructure in Panama. China has appointed Panama as its location for its silk road project due to its geographical location within Latin America and Air China has been flying to Panama twice a week since March 2018. What does this have to do with the real estate market? Because the Chinese are now allowed to travel to Panama with visa facilitation, they are now also acting as real estate buyers and through the infrastructure projects there are new jobs, which in turn generates rental demand.

Basically, Panama’s economy has to struggle with the following problems:

• Poor education system of the population
• Corruption
• Reputation as a tax haven, although Panama is no longer on the EU or OECD blacklist (Link)

Furthermore, a widening trade war between the US and China would affect the profitability of the Panama Canal.

Nevertheless, Panama’s economy is currently growing faster than most of the rest of the world and according to IMF forecasts, and the Panama Canal has closed the fiscal year with a record year (Link). These are important elements for the attractiveness of the investment location and the real estate in Panama.

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

If you are looking for a relaxing apartment at the beach with good infrastructure near the metropolis Panama City, Coronado is the place to be. Only one hour away from Panama City is Panama’s biggest and most developed beach area. On the beautiful beaches of Coronado you will find all necessary facilities of daily life like restaurants, supermarkets, nightlife and medical care. This makes you independent of the metropolis of Panama City, but still close enough to be able to dive into city life at any time.

The beach community Coronado originates in the 1970s. At that time, one of Panama’s wealthiest families built the first golf club in the area and in the following years expanded it to include a beach club. As a result, the first weekend homes in Coronado were built by families who live in Panama City but like to spend the weekend in their properties on the beach in Panama. As a result, there were the first restaurants, supermarkets, etc. in the area.

However, the real construction boom started in 2008, when one of the big Panamanian property developers came up with the idea of building the first large residential complex with apartments in Coronado, which met with great demand from North Americans especially.

There are four large supermarkets, several bars, a cinema, one hospital and much more, so you don’t have to leave for Panama City. The mountain range of Panama with the popular mountain village “El Valle de Antón” and always springlike temperatures is only 45 minutes away by car. The area is one of the driest and most sunny in Panama, so it is bathing season on 10 months a year.

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