Panama Real Estate Market Overview (2024)

The real estate market in Panama in 2024 is increasing its growth since the 2020 slowdown, mainly in residential projects both in the city and beach zones. Since middle of 2023, many of the projects delayed or halted started to resume constructions.

This is a good signal for the real estate sector in Panama for 2024 and the following years, considering of the economic slowdown that happened during the pandemic and other years.

In this article we offer an updated guide to understand Panama’s economy and real estate market overall.

 

 

Introduction: Why Panama is on sight for real estate investing?

In the early 2000s, Panama’s real estate market was relatively underdeveloped compared to its neighboring countries in Central America and Latin America. However, due to the combination of its strategic location, tax benefits as well as investment policies, as well as its economic growth and popularity thanks to the Panama Canal, Panama’s real estate market began to start a interesting transformation.

In the center of this transformation was, of course, the development of Panama City, the country’s capital and economic center. With the expansion of the Panama Canal approved in 2006, as well as attractive tax benefits for multinational and overseas companies. The city’s gain momentum for becoming a global trade hub and a financial center in the region, this of course attracted more multinational companies, financial institutions, and expatriates seeking business opportunities and a high quality of life.

The government took opportunity of this growth to support urban growth and attracting investment. Consequently, significant investments were made in infrastructure projects, including the expansion of the Tocumen International Airport and the construction of modern highways. These developments not only facilitated connectivity within the city but also improved accessibility to remote and new areas, creating more opportunities for real estate development.

As Panama was getting popular as a regional economic zone since the 2010s, there was a surge in demand for both tourism and also luxury real estate, particularly in prime locations such as Punta Pacifica, Costa del Este, and Avenida Balboa. Real estate developers responded to this demand by building upscale residential towers, luxury waterfront properties, and high-end commercial spaces catering to the growing affluent demographic.

As for the tourism, Panama also expanded developments in beach areas, particularly in the pacific coast. Investors took advantage on the country’s growing popularity by developing luxury resorts and upscale vacation properties, satisfying to both domestic and international visitors.

Panama today continues to position itself as a key player in the global economy, the country’s GDP growth has been between 5 to 8% (excluding the pandemic years), which is over the average growth compared to other latin American countries. Thanks to this, the real estate market is expected to remain dynamic and with lots of potential. With ongoing infrastructure investments and a strategic focus on attracting foreign investment, Panama has high chances to keep growing and becoming a leading destination for real estate investment in the region.

Read more about this on the following articles:

What makes Panama a Stable Country for Investing?

Panama’s Economy Growth and How Real Estate Is Affected in 2024

Real Estate Demand: The Attractiveness of Living in Panama and Costs

Living in Panama offers a mix of modern amenities and natural beauty. The country’s diversity range from urban centers to relaxing beaches and cool rainforests. Panama City, can be compared to any modern urban city in first world countries, since it offers all the amenities.

The cost of living in Panama is very affordable compared to many Western countries, with reasonable prices for accommodation, food, transportation, and entertainment. While the expenses can vary depending on the region and lifestyle choices, when it is compared to United States or Canada, it definitely has a lower cost of living. This is the reason why expats and tourist are choosing Panama as one of their destinations for living, frequently visits and investing.

Read more about this:

Panama Real Estate Prices and Cost of Living: Common Questions Answered

 

Panama Real Estate Market Prices: Investments with Potential

Panama’s real estate prices generally offer a more affordable alternative compared to many parts of the United States and Canada.

Properties in Panama, including beachfront condos, mountain homes, and city apartments, are often available at lower costs compared to major metropolitan areas in the modern western countries.

Additionally, Panama offers attractive incentives for foreign investors, such as tax benefits and in some occasions residency programs, making it a more interesting destination.

Prices can vary depending on how big the apartment, how many rooms, and the location. For example, in Panama City location or better views of the city or the ocean might drive prices a little bit higher, and in the beach towns, the closeness to the beach can also affect the value.

The big benefit of looking into a much developed real estate market such as Panama is the huge and diverse amount of units available with different kind of views, locations and distribution, both in the capital and the interior cities.

Read more about this:

Average House Price in Panama: What points are considered for pricing?

As for the property taxes, Panama’s property tax system is often considered as favorable compared to many other countries in the region. The country offers relatively low property taxes, for example, the annual property tax rate is typically around 1.75% of the registered value of the property.

However, there are many benefits available on the property tax system, there are exemptions and discounts on property taxes for certain types of units, such as primary residences, new construction projects, and real estate located in specific development zones or rural areas.

Read more about this:

Property Taxes in Panama: Basic Guide 2024

Panama Real Estate Market Trends in 2024

In Panama, the real estate market has shown consistent growth over the years, particularly in luxury properties, apartments in the city, but also in beach towns and tourist-friendly areas. The demand for rental properties is still rising in the city, fueled by a several factors, including growing population and expats in the country.

While the event of the pandemic in 2020 caused a short-term disruption, the economy and the market have recovered and remains resilient. Popular areas such as San Francisco, Costa del Este and Punta Pacifica have resumed many of the construction projects which briefly halted during 2020.

in several areas of the city, apartment and houses sales prices have a slight increase in value compared to 2020, 2021 and 2022. But also, the increasing rental prices makes evident that the rental demand economy is on a growing trend.

Read more about this:

Panama Real Estate Market 2024: Trends and Opportunities

Buying real estate in Panama: A simple process

Buying a property in Panama is not a complicated process. As a foreigner, there are many evidences to say that it is safe to buy an apartment or a house in the country. People with any citizenship have the rights to buy a property in Panama without restrictions, you will get the same ownership rights as any local Panamanian would get when purchasing a property.

The process of buying a home in Panama may seem a little complex for new buyers, there are several processes that involves the creation of a contract and a public registry process, as well as legal fees. If you do not speak the language, working with a proper real estate agent can help you make the process easier.

For more information about the buying process, see the article below:

Complete Guide to Buying Real Estate in Panama (Step by Step)

What to look for to understand the market?

To understand the development and trends of the real estate market in Panama there are several key factors that must be keep on sight.

The first factor is location and the development of new infrastructure, analyzing trends in different areas such as the coastal areas, and also new zones that will have an improved infrastructure (for example, a future metro station). If a new property has or will have an easy access to commercial areas, main highways and amenities, there is a good potential for real estate appreciation.

Another key factor is the economics indicators of Panama, last year economic growth and what are the forecasts for the upcoming years, how does inflation looks like and what is the overall employment situation in certain areas.

Tourism, laws and regulations are other important factors to keep an eye, with a new government coming in in 2024, there can be real estate development opportunities if the government implement new tax benefits, tourism programs and bank regulations that can benefit either some of the real estate developers in Panama, or the potential real estate buyers.