If you dream of going tropical, living with average temperatures around 80 degrees and don’t mind only two seasons —dry and extremely wet or rather wet— Panama City can offer high-quality, luxury homes for between $1 million to $5 million.
The mangroves that used to constrain the capital are almost gone. And land scarcity has transformed a big chunk of the low lands into luxury developments, some of the city’s hottest real estate attractions. Even nearby reefs have risen from the shallow waters to become urban islands on the bay.
“Panamanian elites like to live large, and they live at the best available places, so you ought to follow them,” said Andrea Cooper, a Canadian expatriate working as an investment adviser at Panama Equity, a high-end real estate brokerage. She arrived in the country almost 20 years ago while working for Scotiabank, and after switching to real estate, she stayed.
Panama City, with its population of 2 million people, is holding on to the construction boom that started in the late 1990s when families and investors from Venezuela, Colombia, Ecuador, Brazil and Mexico began pouring money into what was then cheap, oceanfront housing.
Santa María, a 690-acre gated community with an 18-hole golf course, a country club and a business center, has the most available inventory among these newly developed houses and condominium towers in the city, according to Kent Davis, Panama Equity’s managing director. Prices there, he said, start at around $1 million or $1.2 million for a three-bedroom, two-bathroom home. (The balboa, Panamá’s currency, is pegged to the U.S. dollar 1-to-1, so all prices are in dollars.)
La Vista on the Green is a 30-story tower that includes two 3,200-square-foot, three-bedroom apartments per floor plus a penthouse, all of which overlook Santa María’s 18th hole. Indeed, you can get one of those apartments at about $1 million, said Sofia Montaño, investment adviser at Empresas Bern, a firm that is both the developer and realtor for the property.
Empresas Bern is now completing a second tower nearby, with the same configuration and prices as La Vista, also overlooking the green. The firm has another four projects under way in the city, including three towers in Costa del Este, an older residential community.
On MLSacobir.com, Panama’s Multiple Listing Service, a recent posting offered a five-bedroom, five-bathroom penthouse at another Santa María condominium for close to $1.1 million, making the 4,467-square-foot property worth around $246 per square foot. At Costa del Este, a 2,798-square-foot, three-bedroom, three-and-a-half-bath apartment had an asking price of $765,000, or around $273 per square foot.
“The luxury market is changing, and condominiums are taking over a market that houses used to dominate,” Mr. Davis said
The reason for this trend is the scarcity of land for development, according to Rafael Gangi, the head of Sotheby’s Realty Panama.
Santa María and Costa del Este, Mr. Gangi said, have benefited from acquiring some of the last available greenfields in the late 1990s and early 2000s, and developers are now looking to get a return from that land.
Santa María’s homes are priced between $1.5 million and $4.5 million, depending on square footage and location. Translating into price per square foot, Mr. Gangi puts Santa María at an average of $300; Costa del Este at the $225-$240 range; and Punta Pacífica, a 374-acre zone comprising both reclaimed land from the sea and what used to be the downtown airport, between $400 and $500 per square foot. (Though Panamá uses the metric system, all figures have been converted to U.S. standard units for this story.)
At Punta Pacífica, an 8,600-square-foot flat at The Point tower was recently for sale for $4.3 million.
And beyond The Point’s 65 stories, smaller apartments at the highly sought after Trump Tower franchise–a distinctive, impressive waterfront monument to grandeur– are also priced close to $400 a foot. Frank Morrice, general manager at Siuma Realty, points out that five years ago prices at “Torre Trump” used to be higher, up to $470-$500 per square foot, a trend he said may suggest a bearish market.
The Ocean Reef Islands complex, a two-island development connected to Punta Pacífica by a bridge, is a bit more expensive. At about $520 per square foot, prices start at $1.3 million for a 2,500-square-foot-home. Some units are as large as 8,300 square feet.
Ocean Reef / Grupo Los Pueblos
Ocean Reef is a low-density gated community with a yacht club, private marina and other amenities, but its total area of about 47 acres will, once it’s finished, be home for 350 families, according to data provided by Grupo Los Pueblos (GLP), the project’s developer and realtor. The first of the islands is already completed and its first residences were delivered in late 2014. Houses and apartments at the second island— now under construction—are expected to be available in the second quarter of 2019.
By comparison, at 766 acres, Costa del Este has over 900 homes built over two decades, and construction is still under way. Golf course included, Santa María totals 692 acres.
New developments versus older apartments
Ms. Cooper sees all these new developments as an upgrade compared to buildings from two decades ago or more, which have “smaller and older apartments, not as top notch quality as the new ones.”
But some second-home foreign buyers don’t mind the older properties. They come “looking for ocean views and beaches, and they aren’t seeking a four-bedroom second home,” Ms. Montaño said.
The newest wave of higher caliber of apartments may be a result of the evolving tastes of affluent Panamanians that have studied or lived abroad.
“Now they are finding here the same kind of homes they’ve seen elsewhere. They recognize quality,” Ms. Cooper said.
Costa del Este was the first planned community to follow the new trend, with many similarities to Doral Isles, a gated community in northwest Miami. Santa María came later, with a plan that was designed by Fort Lauderdale’s EDSA, and a Jack Nicklaus golf course, one of its main attractions.
As Santa María gets going on the second of its six planned phases and affirms itself as a hot spot, Panamanian elites are moving in and putting their former homes on the market to do so.
That massive move, from Costa del Este and other neighborhoods, may leave between 300 and 400 high-end homes vacant throughout the city, notably at Costa del Este, according to Ms. Cooper’s estimates. “This creates a huge opportunity to buy because nobody wants their investment sleeping for awhile,” she added.
Mr. Morrice said he knows of a good number of these homes that have been waiting for a buyer for up to two years.
For those looking for a deal, Ms. Cooper advises having cash on hand. Foreign buyers face scrutiny from local banks, and the process of getting approved for a mortgage can take up to three months or even more.
Sellers’ reluctance to wait that long is what creates the opportunity for buyers to get a good discount if they pay cash, Ms. Cooper said.
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