Panama’s Real Estate market has drawn the attention of many international investors over the past five years, and for good reason. The country of Panama, from the city to the beaches, is growing fast. This growth is fueled by a strong service sector economy, increased international trade, tax incentivized business zones, tourism dollars, and of course, a powerful Real Estate market. Panama has transformed its capital with dozens of new business and residential skyscrapers built each year.
There has also been significant growth in suburban developments, beach hotels and resorts, and renovating old housing throughout the country. Needless to say, Panama has built new properties at an unprecedented rate for the small Central American nation. But will it be sustainable for the future? If you ask the experts, the answer is “yes”.
Where is the growth happening, and is it truly sustainable?
Panama’s Real Estate growth areas are very diverse. Hotels, luxury condos, and office towers are the most apparent, but Panama is also surging in mall/retail construction and affordable suburban low-rise developments as well. Construction has grown so fast, that many critics believe Panama is overbuilding, and won’t be able to match the supply with demand. And while some statistics on current occupancies in new office and residential buildings suggests that demand isn’t growing as fast as supply, current trends suggest otherwise. It’s not necessarily that the country currently has the ability to meet the high volume of construction, but more that developers are expecting continued growth, and are building accordingly.
As the economy grows, so does the number of investors and workers who want to make Panama their home. In fact, Panama’s new resident migration is happening so fast, that the government is scrambling to find the best way to accommodate them. This means that despite what seems like overbuilding, Panama’s Real Estate market is actually becoming more efficient by preparing for inevitable growth, and marking their territory early.
Why Panama’s Real Estate market will be hot for a long time
In the Real Estate world, there’s a natural ebb and flow when it comes to supply and demand. But there are some global markets that get hot, and stay hot, due to a sustainable shift in demand for the long run. Panama City was also recently named as a “City of the Future” by the Knight Frank organization, which studies wealth growth and global wealth/investment trends. According to the report, Panama City is attracting a growing number of multimillionaire residents, as well as investors, who are planning future projects within the city. This means big business for the local Real Estate market, as they have, and continue to develop some of the most ambitious large-scale construction projects in the region.
Panama also has a proverbial “golden ticket” in the Canal, where expansion is set to pump up both the local economy, and attract further migration and investment from foreign entities. This will be a game changer for the region, and global shipping as a whole, giving Panama a strategic advantage for trade going further into the 21st century. Bigger trade equals bigger investments, and that makes Panama perfect for large-scale luxury and affordable Real Estate development. According to the Knight Frank report, “high quality transport and health care and a growing presence of global hotel brands have drawn investment from entrepreneurs looking to expand on a strong food and lifestyle scene.”
