Panama City's real estate market is undergoing a fascinating transformation in 2023, adapting to the evolving preferences and needs of both local and international investors. In this blog, we'll take a closer look at the latest trends in Panama's real estate landscape, from the hottest areas to the types of properties in high demand.
Why Invest in Real Estate in Panama?
Panama boasts a unique blend of features that sets it apart. It stands as the lone Latin American country with top-notch infrastructure, investment security, world-class healthcare facilities, and breathtaking natural wonders, including lush rainforests and fantastic fishing and diving spots. Access is a breeze, thanks to numerous daily flights, especially from the United States. To add to its appeal, Panama employs the US dollar as its official currency, ensuring a rock-solid financial foundation.
Foreign Investment Soars
Panama's financial stability has piqued the interest of international investors. When emerging markets remain stable, multinational corporations often follow suit. This has led to major global companies setting up operations in Panama, creating an ideal environment for investment. The promise of a high quality of life, low taxes, and a strategic location with direct access to 400 million Latin American consumers makes Panama an attractive prospect for foreign businesses.
Foreign Real Estate Investors in Panama
Panama offers several economic benefits, encourages foreign investment in US dollars, and provides tax incentives. In the first half of 2023, there was a 20% increase in home sales to foreign investors and buyers, compared to 2020, amounting to US$386 million. By nationality, most foreign real estate investors come from Colombia, followed by Venezuela, the USA, Spain, China, Italy, and Germany.
In the first half of 2023, German investors poured around $13 million into Panama's real estate sector. They are drawn to Panama's strong economic outlook, ease of obtaining investment visas, and retirement benefits.
A Shift in Property Sizes
One of the most significant trends in the Panama real estate market is a shift in the size of properties being sought. In the past, it was common to purchase large apartments of 250 to 300 square meters or even more. However, in 2023, the focus has shifted to properties ranging from 50 to 175 square meters, with an average size of 143 square meters. This shift towards smaller units is driven by changing demographics and preferences. The market is currently concentrating on properties of this size.
Affordable Entry Prices
According to the National Housing Council, 82% of the housing sales market in Panama comprises units with price ranges from zero to $180,000. Of these, 40% of homes valued over $120,000 in Panama are acquired by foreign buyers who see the Panamanian market as a destination for living and doing business.
The average price for the properties that international clients are seeking falls within the range of $160,000 to $500,000, with an average investment of $324,778.
Modern Amenities and Services
Foreign investors are making their mark on Panama's real estate scene. They often seek properties that offer immediate rental income, making them particularly interested in new developments. What makes these properties particularly appealing is the modern amenities and features they offer. Beyond the traditional pool and gym, they often come with added bonuses like spas, cinema, children’s playground (indoor & outdoor) and even co-working spaces. These features enhance the overall living experience and add value to the properties.
Furnished Options
Some new developments in Panama are enticing buyers with the inclusion of furnishings. This means that buyers can move in and start enjoying their new home right away. This trend adds a level of convenience and appeal for those seeking a hassle-free transition to their new property.
2023 Real Estate Trends in Panama: What's Hot?
In the ever-changing world of Panama's real estate market this year, there are some exciting trends to talk about:
Rental Properties on the Rise: People in Panama are increasingly interested in renting homes. It's not just any rentals; it's about snagging a spot in cool locations like the Marbella banking district, Calle Uruguay, San Francisco, and Costa del Este. This shows that Panama's real estate market is lively and offering various options to suit different lifestyles.
Busy Office Spaces: Panama's economy is buzzing, and office spaces are feeling the action. Businesses are doing well here, and that's why you see high occupancy rates in offices. It's a sign that Panama is becoming a hotspot for companies.
Hottest Spots in Panama City: There are specific areas in Panama City that folks love for real estate investments. Punta Pacifica, San Francisco, Costa del Este, and Santa Maria are some of these hotspots. They're not just convenient; they offer a great lifestyle too.
Tax Perks: Panama wants to attract folks from other countries to invest in real estate, so they're offering cool tax incentives. If you buy a property below $120,000, you might not have to pay certain taxes. That's a nice bonus if you're thinking about investing here.
Conclusion
Panama's real estate market is evolving to meet the changing needs of both local and international investors. While smaller, modern properties are gaining popularity, larger options are still available for those with different preferences. The influence of foreign investors is shaping the market in exciting ways. As Panama continues to develop, the real estate market is sure to keep pace with the dynamic needs of investors and residents alike.