With over 4,000 new units expected to be delivered between this year and 2019, prices for condo apartments in downtown Panama City are up almost 30% from 2008, according to a new report.
The average price per square meter of brand-new condos is now $2,285 (about $210 per square foot), according to a survey of 38 projects by Panama Equity Real Estate, which conducted its research between January and July, focusing on an approximately six-radius area in downtown Panama City, from east Casco Viejo to west Coco del Mar districts.
The report estimates that this year 486 new apartments will be delivered. In 2019, when 181 new condo units would be available, the total will have reached 4,446.
Driving values upwards in the downtown area traditionally favored by international buyers is an increase in both labor costs and prices of construction materials, said Hawaii-native Kent Davis, Managing Partner at Panama Equity.
Another factor boosting new condo prices has been a strong and constant demand from Latin Americans, who make up about 70% of all foreign buyers in Panama, estimates Davis. (There are no official data about international buyers). The majority of these clients come from Brazil, Colombia and Venezuela, said Davis.
Political and economic upheaval in Brazil and Venezuela, and the most recent depreciation of the Colombian peso against the U.S. dollar, which is the official currency in Panama, haven’t had a negative effect on these countries’ appetite for Panamanian real estate, said Davis. In fact, troubles in their home markets might actually boost their interest in the Central American country.
“Those people continue to come here,” said Davis, adding that Venezuelans look at Panama as a safer and more stable place to live, relocating families first and then opening businesses. In the case of Brazilians, they come first for the business or investment opportunity real estate provides, and later consider moving in.
The Panamanian capital was identified earlier this year as a “City of the Future” by real-estate consultancy Knight Frank, which highlighted the city’s “high degree of economic and regulatory stability” as well as a “very competitive tax environment,” all which helped foreign direct investment levels to hit 9% of GDP in recent years.
Panama’s economy grew at an annual average rate of over 8% between 2006 and 2012, one of the highest in Latin America during the last decade, according to data from the World Bank. As the country of close to 4 million people prospered, its poverty rate dropped from 48.5% in 2002 to 27% in 2011.
Wealth creation aided by its recently expanded canal will help the number of high-net-worth individuals in Panama to almost double from 4,700 in 2007 to near 7,000 by 2024, according to Knight Frank.
Foreign buyers have no restrictions to buy real estate in the country and they hold the same rights and protections of home ownership, said Davis.
“The city is just getting better and better,” he said.
Write to Andrea López Cruzado at email@example.com