Panama Real Estate Inquire about Panama Real Estate

Country Data

Location: Central America, bordering both the Caribbean Sea and the North Pacific Ocean, between Columbia and Costa Rica
Size: Total area is 78,200 sq km (around the size of South Carolina)
Population
Economic
Overview

What is driving the market?

  • Major shipping port (Panama Canal, Colon Free Zone), one of the world’s biggest shipping centers
  • Acts as a crucial banking, finance and insurance hub
  • Services driven economy
  • #1 destination for medical tourism (an industry expected to be worth US$100bn by 2012 according to McKinsey); medical treatment is 40-70% cheaper than in USA

Tourism sector driving a lot of growth

 
GDP

Current: GDP has dipped slightly, however, economy is seen as resilient and has weathered the global downturn better than most nations, expected to show positive growth in 2009
Recent trend: GDP has grown strongly, especially in 2008, aided by the Panama Canal expansion project

Future trend: Growth is expected to pick up again quickly in the next several years once the global slowdown effects subside

 
Inflation

Current: Inflation subsiding from 2008 peak
Recent trend: Inflation was rising for last several years due to external factors (high global energy and commodity prices)
Future trend: Inflation expected to fall back to previous levels prior to 2007-0
Employment (Labor)

Current: 2008 unemployment 6.3%
Recent trend: Still a shortage of skilled labor but an oversupply of unskilled labor

Future trend: Unemployment expected to be little changed due to economic resilience and the Canal Expansion project
Foreign Trade

Current: Imports = $15,180,000,000 ($15.18B) and Exports = $10,370,000,000 ($10.37B)
Recent trend: Many bilateral free trade agreements have been agreed upon in the past, such as with Chile, El Salvador, Taiwan, Singapore, Honduras, Costa Rica

Future trend: More agreements regarding trade will be signed with nations such as the US, Canada, Mexico and other Latin American countries
Currency

The USD is the legal currency used in Panama.
Interest Rates There is no central bank in Panama as the country uses the US Dollar as legal tender and thus, there is no monetary policy available (no interest rates are set by a central bank)
FDI



Current: FDI has picked up significantly, especially since 2006, primarily due to the increase in port investment (Panama Canal Expansion Project) & residential and commercial construction
Recent trend: Inward FDI for 2007 slightly below 2006 figures, however, far higher than in previous years over the last decade

Future trend: FDI inflows are predicted to increase once the global slowdown instability subsides
Real Estate market

Basic overview:

  • Significant increase of construction activity, growth expected to continue into the next decade
  • High rise apartments and resort complexes are popular, there are several in the planning stage or already under construction

Current value

  • Price/sqm : $1,740
  • Rent/month: $1,736
  • Rental Yield: 9.98%

Recent trends or stats

  • There is a shortage of short term rental accommodation in Panama City
Real estate defined in terms of several classes (Class A & B), 35% of