Panama Real Estate and Panama Growth in 2009

Investment in real estate in Panama will benefit from Panama’s strong economic growth. Both the World Bank and the United Nation’s Economic Commission for Latin America and the Caribbean predict that Panama will not only weather the current economic crisis better than almost all other Latin American nations but that its economy will grow in 2009.

Panama Real Estate in the Current Crisis

As we have stated in our February real estate update, “The world economic crisis has of course affected Panama. The biggest affect we are seeing is that there are an increasing number of buyers (especially speculators) who can no longer close on pre-construction properties due to their personal situation. Generally, they have a 30% deposit already paid, so they are keen to recoup all or some of their deposits if nothing else. Many of the buildings coming online now have almost doubled in price, resulting is some very good deals from people who are unable to close. This is particularly true of the high end condo buildings in Panama City, especially around the Bay.”

Where the Deals are in Real Estate in Panama

Real estate may be location, location, location but not all Panama real estate is the same.

Real estate in Panama City, especially large condo projects, is where much of the speculation occurred and where there are “distressed” properties available. This is where the scenario we describe above occurred. If you are looking for a bargain on a condo on the Bay of Panama this is the year.

High end individual properties throughout Panama have been affected by the economic crisis because there are fewer North American buyers right now so there are also some excellent deals in the city and in the central highlands and on the coasts. Here is where you need the services of a bilingual realtor who does business throughout the country, ABPanama.

The middle range of the market has not taken much of a hit because it is populated by locals. Panama’s economic stability keeps folks working here and paying their mortgages.

The commercial real estate market might be thought of as being in two parts also. The bank area in Panama City and areas that rent to multinational corporations are doing well as the banks here are stable and multinationals are still moving to Panama.

Panama’s small business community is doing well. Rentals to this group are doing well and a source of income for a wise investor.

Investment in commercial real estate is best done on more of a case by case basis than the current residential real estate situation.

The Future of Panama Real Estate

Going back to the beginning Panama is doing well despite the recession. Panama will see a dip in its growth rate this year down to what normal countries see during good times. Panama growth and growth in the Panama real estate market can be expected to return to a “Panama normal rate” of 9 percent in a year or so.

Investment now in Panama real estate will produce a nice appreciation in the next year or so and over the years to come. If you are interested in Panama real estate come to see us at ABPanama. We have over 23 years experience managing real estate portfolios.