Real estate market report for Panama 2023 / 2024

The real estate market in Panama remains an attractive destination for German real estate investors in 2024, as they seek interesting investment opportunities in Panama and a Plan B outside of Europe. Panama City offers a wide range of high-quality real estate investments that promise solid returns and long-term appreciation potential. In this real estate market report for Panama 2023/2024, we provide a detailed overview of the current developments and opportunities in the country’s real estate market.

If you are also interested in reports from previous years, please have a look here.

Economic Development and Infrastructure Projects

Despite global challenges, Panama continues to experience positive economic growth. According to estimates from the World Bank, the country will achieve a growth rate of 2.5% in 2024 and increase to 4.5% by 2026. In 2023, there was a GDP growth of 7.3%. The government continues to focus on important infrastructure projects, such as the construction of the fourth bridge over the Panama Canal and the expansion of the metro network, to improve the transportation situation in Panama City and facilitate access to different neighborhoods.

Attractiveness of the real estate market for foreign investors

More and more foreigners from the American and European continents are seeking a Plan B in Panama as they no longer feel completely comfortable in their home countries. As a result, properties in Panama City are often purchased to apply for residency in Panama. Given the geopolitical tensions and the looming escalation of the conflict between Ukraine and Russia, investors attach increased importance to personally liking the property, in case they decide to live in Panama in the future.

The real estate market in Panama is particularly shaped by foreign buyers, especially those with a purchase volume of around 500,000 USD, who see Panama as an attractive destination for real estate investments. This trend is based on several factors. Firstly, property prices in Panama are often more attractive than in their home countries, which is of interest to Canadian, American, and European buyers. Secondly, Panama offers greater security for investments and properties compared to many home countries, which is particularly attractive to South American buyers. Additionally, these investments are frequently used to apply for an investor visa.

Effects of mine closure and credit rating downgrade

The weeks-long protests associated with the mine closure in November 2023 unsettled many people and temporarily slowed down the real estate market in Panama. The uncertainties surrounding the mining industry led to a temporary slowdown in the market. However, the market has since normalized.

The downgrade of Panama’s creditworthiness by Fitch Ratings due to the closure of a significant copper mine last year could also have positive implications for the real estate market, particularly in terms of prices. Increased financing costs could potentially result in a reduction of new real estate projects and a smaller supply, leading to positive long-term effects on real estate prices in Panama.

Government elections on May 5th of 2024

As the government elections in Panama approach on May 5th, which take place every five years, the expectation is that there will be no major political shifts, as parties and candidates tend to position themselves more towards the center. However, it will be interesting to observe how the issue of the copper mine will be addressed in the future.

Market Trends

In recent months, there has been a increased focus on new construction properties rather than existing properties. The demand for new properties has risen significantly as many investors are seeking modern, high-quality properties with contemporary amenities. This trend reflects investors’ desire for contemporary living and working spaces. On the other hand, existing properties offer the advantage of completing the purchase within three months through our FastTrack process and knowing what one is getting. Additionally, obtaining residency permits can often be quicker with existing properties. Please refer to our report on Existing Properties vs. New Construction for more information.

Business-Friendly Climate

Panama is globally recognized as one of the most business-friendly countries and opens its doors to international companies. According to the US News & World Report, Panama ranks only behind a few countries such as Switzerland, Luxembourg, and Singapore in terms of business friendliness. The pleasant climate and financial benefits make Panama an attractive location for investors.

Tourism Marketing as the Key to Success

The Panamanian government has recognized that the tourism sector is a significant driver of economic growth and has initiated increased marketing efforts in this area. There is a particular emphasis on eco-tourism and cultural aspects, which have been overlooked in the past. Investors who wish to invest in properties that benefit from tourism should consider these emerging areas (Casco Viejo, Panama Canal, Beaches), as Airbnb rentals are permitted with a license.

Panama City – Exclusive Top Locations at Reasonable Prices

Panama City offers exclusive top locations at reasonable prices, making it an attractive destination for German real estate investors. The modern high-rises, enchanting old town of Casco Viejo, and the Panama Canal area provide a variety of investment opportunities. Each neighborhood has its own charm and allows investors to invest in an urban environment with excellent growth potential. Whether it’s high-quality high-rises in downtown or historic properties in Casco Viejo, Panama City offers a wide range of high-quality options. Our report on Investing in Top Locations in Panama City with a Limited Budget presents the neighborhoods in Panama City and highlights the most financially appealing real estate projects.

UNESCO Old Town Casco Viejo

The UNESCO World Heritage Site of Casco Viejo has evolved into a cultural and architectural gem. In 2022, the spectacular Hyatt Hotel and the beautiful Sofitel were opened, further enhancing the neighborhood’s image and luxury appeal. These renowned luxury hotel brands attract both tourists and real estate investors. Additionally, the connecting road to the new cruise port and exhibition center was completed in February 2024 and is a further step towards increasing the attractiveness of the real estate market in Casco Viejo. Investors can benefit from attractive UNESCO tax incentives, which include a 30-year exemption from property taxes and a 10-year exemption from income tax on rental income. Our modern apartments in Plaza Santa Ana come with these tax benefits, and the application for an Airbnb license is underway.

Airbnb at the Panama Canal

In an optimal location for Airbnb rentals, apartments ranging from 60 sqm to 106 sqm are being developed near the Panama Canal in Panama City. Prices start at USD 280,000. The prime location allows for short walks to the convention center and a 5-minute drive to the cruise terminal. Demand is high due to the unique location, design, and Airbnb rentals. Click here for more information on the Airbnb project at the Panama Canal.

Ocean Reef

The Ocean Reef project is considered one of the most successful projects in the history of Panama. The Ocean Reef Islands offer an exceptional location and quality that is unparalleled in Panama and throughout Latin America. Given that, demand for apartments in the most exclusive real estate project in Panama remains high, and the apartments will soon be sold out. In “The Palms” project, I have personally purchased an apartment, and I describe my reasons in this report.

Costa del Este and Santa Maria

The neighborhoods of Costa del Este and Santa Maria Golf and Country Club have established themselves as vibrant suburbs of Panama City. Both areas offer an attractive mix of high-quality residential properties and top-notch amenities. Costa del Este has the advantage of being the home to many multinational corporations, allowing residents to live near their workplace. This makes the neighborhood popular among tenants. Santa Maria is the most exclusive residential area in Panama City, offering a tranquil and green living environment within a 300-hectare gated community with an 18-hole golf course. Both neighborhoods are known for their high standards and extensive amenities.

Beach Areas on the Rise

Beaches near Panama City are becoming increasingly popular among travelers and investors. Panama has great potential to establish itself as an attractive travel destination, similar to Costa Rica. Projects such as Playa Caracol have already caught the attention of many investors. Further real estate developments are planned along the spectacular beaches in Panama, and we will report on them soon.

Conclusion of the Real estate market report for Panama

Panama continues to offer attractive opportunities for German real estate investors searching for interesting investment possibilities and a Plan B outside of Europe. The positive economic development, numerous high-quality real estate projects, various visa programs, and a business-friendly climate make Panama an appealing destination for capital investments.

Click on the button to find a good overview of the investment opportunities:

For more information on the current developments in Panama’s real estate market or for specific investment opportunities, please feel free to contact us.

You can also find many of the properties we currently have for sale in Panama on our YouTube channel in the form of informative videos.

What to look for when buying a property in Panama

If you decide to buy a property in Panama – whether as an investment or as a plan B – we would like to give you some advice.

Choose a good property manager in Panama who will take care of your needs and keep the tenant happy. A good property manager usually costs 10% of the monthly rent. We offer such property management in Panama City to our clients.

Seek assistance with the purchase process in order to keep an eye on possible incidental purchase costs in Panama from the beginning. Experience shows that it takes on average about 3 months from price agreement to registration in the land register – it is worth a lot to have someone with the necessary know-how at your side.

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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