Panama Real Estate Price Trends in 2023

Just like any other country in the world, the prices of real estate properties in Panama are subject to various factors that influence the market.

In this article, we will explain what makes Panama’s real estate prices go up or down. And also a summary of how the prices are in 2023.

Supply and demand

The main and obvious factor that affects real estate pricing in Panama, as well other countries, is based on the principles of supply and demand. When there is a high demand for properties and a low supply of available units, it automatically makes the real estate market in Panama as a seller’s market, since the seller has chances to get a premium price for his apartment, house or property.

As a result of high demand, prices of properties increase. Conversely, when there is a low demand and a high supply of available units, it creates a buyer’s market, and the prices of properties decrease.

During the last 3 to 5 years in Panama City, the growing availability of new apartment and house projects in the market, as well as the slowing demands compared to years like 2012 or 2013, has set a top limit on the properties prices in Panama not only for sale, but also in the rental fees.

The 2020 pandemic had a strong impact in the real estate market, this effect was not only in Panama, but in many other countries. During the economic recovery process following in the years 2021 and 2022, primarily the prices of real estate were maintained at the same range.

The year 2023 has shown a slight upward trend in the sales and rental prices of apartments and houses in Panama, considering the economy is recovering at a good pace, reaching growth levels prior to the pandemic phase.

Economic conditions

As mentioned already, the state of the economy is one of the most critical factors that influence real estate prices in Panama.

As the economy grows, it leads to an increase in job opportunities, higher incomes, and more demand for homes and properties. Foreign investment also plays a huge factor in Panama when it comes to real estate demand, mostly when the economy has reached a level of stability, and foreign migration laws favor the expats.

According to the Ministry of Economy and Finances (Ministerio de Economía y Finanzas, MEF), the outlook of Panama’s economy growth for 2023 is for an average of 4.2%, mainly based in the logistics and maritime sector, and infrastructure construction projects as well, such as new roads and the metro line 3.

Location and infrastructure

Location is a key factor in the real estate industry, and Panama is no exception. Properties that are located in prime areas like Punta Pacifica, Costa del Este or Santa Maria, or even some popular tourist destinations, like Casco Viejo, are more likely to have higher prices than properties in less desirable areas.

Having nearby amenities such as hospitals, schools, and shopping malls, combined with great infrastructure such as the availability and quality of roads, transportation and utilities, play a huge factor on the pricing trends in Panama. Areas with better infrastructure are more likely to attract more people and businesses, which can increase demand for properties, leading to higher prices.

In summary, there are various factors that influence real estate prices in Panama, including economic conditions, location, supply and demand, and also infrastructure.

Real estate investors in Panama should keep a close eye on these factors to make informed investment decisions. The country has great forecasts for the present and following years, based on the current projects and the growing maritime/logistic sector.

By understanding the forces that drive the real estate market in Panama, investors can position themselves to take advantage of market trends and generate positive returns on their investments.