Panama Real Estate Market 2020 update: Gradual Opening of the Economy

By this time, many (if not all) countries are fighting against the Coronavirus by implementing different confinement and health policies, and while each country is facing different stages and levels of the outbreak, it is getting more clear that we are going to have to live with the virus for a while.

In Panama, so far by mid-June, there are a total of 20686 cases, which 13766 are clinically recovered (66.5% of total reported cases), and nowadays the average number of new cases goes for around 600 per day. While we are still going through the same quarantine measures ordered by the government since beginning of April, they have gradually opened several sectors of the economy, following what they call a “Plan de Reapertura” (Re-opening plan in English).

Reopening plan by blocks

By beginning of May, Panama announced a reopening plan focusing on the reactivation of the economy in a gradual approach, dividing the business sectors by different blocks or phases:

The 1st block was opened on May 13th, it consists of sectors such as small retailers through ecommerce, mechanical and automobile workshops, technical services (like gardeners, electricians, and appliances maintenance professionals), private clinics and artisanal/industrial fishing.

The 2nd block was opened on June 1st, and includes public construction, non-metallic mining, industries, churches, parks, and social areas with 25% of total capacity.

Block number 3 consists of retail (presential commerce stores), wholesale commerce, car sales, professional services, administrative services, and private construction sector. This block as of mid of June it has not been opened, and it is expected to be opened soon or during the following weeks.

The 4th block consists of air transportation, hotels and restaurants, and block number 5 includes education, non-essential transportation (recreational), sports events, entertainment places and bars.

The 6th block and last one it is considered the phase where the economy can go back to full normality and it contains the opening of all economic sectors without sanitary restrictions, concerts, fairs, and night clubs. This last phase the government has plans to open it once there is a vaccine or a proper medical treatment of the COVID-19 disease.

Real estate market in Panama

As we understand, real estate business falls into the 3rd block, as a professional/administrative service combined with the private construction sector, and while it is not opened yet, there is definitely some market interest, more inclined in the rental area. One of the main reasons is because of the appearing of some low rent prices going into the market, since it is likely that many landlords are doing efforts of not letting any of their properties vacant during this period.

The opening of the 3rd block will be an important stage for the real estate market in Panama during this crisis and many people in the sector are looking forward to this phase, it will have their challenges for sure, specially for those new real estate projects which are under the pre-sale process, market demand it is still uncertain because of the laid-offs and temporary contract suspensions in many companies, and this can hit really hard on many of the real estate developers.

The crisis many countries are facing due to the Coronavirus outbreak has been not only difficult, but uncertain and challenging for both governments and people, the health authorities in Panama are carefully monitoring cases every day and are willing to maintain the quarantine or delaying blocks opening if the virus is not controlled. Even with these difficulties, there is more dynamism in the market due to the opening of previous blocks, and private and commercial sectors are looking forward to get back in business as soon as possible, to avoid a bigger slow-down in the economy.