Investing in Panama Real Estate: Stability is king in this market




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Have you been thinking about investing in Panama? Good call. Panama has had an incredible ten years or so when it comes to foreign investment, and it’s still growing as we speak. One of the biggest areas of growth and profit returns is real estate. Panama’s real estate market has been steadily building on itself for the past 4-5 years, with many new projects still slated, and plenty of investment opportunity spread around all sectors. In real estate, timing is everything, which is why having a stable market opens so many doors. Panama’s market is far less volatile than other popular expat investment countries in the region, and this lends a lot to the value (and returns) on Panama properties. With a stable market, you can buy into Panama real estate without such a high-risk investment. The results, well, they speak for themselves.

 

Breaking down Panama’s current real estate market

Panama is definitely a buyers market these days, and we can pinpoint that on two solid factors:

-A) Supply is in abundance, and new construction is projected to remain steady for the next 5 years at least.

-B) Panama’s economic “boom” period of 2011-2013 has slowed a bit, lowering demand on the property abundance, while leveling out prices.

What this means to potential investors is the while future economic growth is expected, prices aren’t skyrocketing like they did a mere four years ago. This stability of pricing, combined with new properties, and planned growth, has created a market that’s ideal for a buyer, and good for a seller. So, while your investment may not cash in quickly like it would have five years ago, the price will un-inflated, yet still a good buy based on current growth statistics. In other words, you can buy medium and sell high, but you may have to wait a bit longer. As a seller, you’ll still get a good deal if you bought your property 5+ years ago, so you won’t lose or have to sit on your target price for very long either.

Using the rental market to finance your property investment

Despite rents leveling out a bit in 2016 and 2017, the demand for rental property in Panama is still huge. Retirees and other new expats often choose renting before buying, with many signing onto 1 or 2 year leases from the get go. Rents are rather high in Panama due to this demand, which can be a huge bonus if you’ve financed your property purchase and want to pay for it with rentals. It’s also a good way to turn a long-term profit on your investment property if you plan on waiting for the market to jump up again before you re-sell. Properties are in such high rental demand in Panama City these days, that developers are building outward into the suburbs, in anticipation of the remaining Metro lines and easier access to the city.

No matter what your motivation for investing in Panama real estate, it’s important to remember one thing: Panama has the most stable economy in Latin America. A real estate market with stability and future assurances is ideal for foreign investment. Your risks are much lower, you’re almost guaranteed to turn a profit, and you’ll have fewer outside political factors to deal with in the long run.

About Manoj Chatlani


Manoj Chatlani is a Senior Partner at POLS Attorneys, a full-service law firm in Panama City, Panama. Specializing in offshore services, including asset protection, estate planning, offshore banking, and offshore corporations, as well as Panama immigration and real estate transactions, Panama Offshore Legal Services offers clients a streamlined solution to all their Panama legal needs. Manoj is a Panamanian lawyer and holds a law degree from USMA and earned a Masters in Communication Law and Panama Tax law.

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