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

Panama’s economy is characterized to be based by a diverse factors which are related to services, the maritime industry and tourism. For many years already, Panama’s value offer is centered in being a regional hub for commerce, finance, and tourism, attracting investors from overseas.

It is important to notice that this economic expansion has not only influenced the country in general, but has also deeply shaped the real estate market.

What are the main drivers of Panama’s economy in 2024?

Within the main component of Panama’s economy and growth is, of course, the Panama Canal. The Panama Canal is a crucial component of Panama’s economy, generating revenue through tolls, transit fees, and other auxiliary services since 1914, and also thanks to its expansion which was completed in 2016.

Although Panama Canal currently is facing challenges due to low levels in their water reservoirs, and new competitors coming in, it is and will be considered still as one of the key factors that drives the growth in the country.

Another component which is the most talked about of Panama is the services sector, being the biggest chunk of Panama’s GDP, and it includes financial services, insurance services, overall business services and, of course, real estate. Panama’s capital has been a regional financial and banking hub for many years, this brings many multinational companies and financial institutions to settle the country.

Logistics and transportation also are a key component of Panama’s economy, this is not only thanks to the business the Panama Canal brings, but also the country’s strategic geographical location, being between North and South America.

And finally, another of the major components is tourism, thanks to the country’s culture, history and diverse ecosystem. Panama has the benefit of offer beautiful coasts both from the Pacific and the Atlantic sides, and also offers a variety of beach communities within the Pacific coast just few hours away from the city.

How does this affect the real estate market?

Panama’s economy has been on a good trajectory, the expansion of the Panama Canal, completed in 2016, has been a driving factor behind such growth, allowing larger ships to pass through and boosting the maritime industry.

Additionally, the geographical location and business-friendly policies have attracted multinational corporations, financial institutions, and expatriates seeking opportunities in the region.

The demand for residential and commercial real estate keeps growing in 2024 and in future years due to the points mentioned before, Real estate companies knows this and they take the opportunity to keep developing diverse construction projects across the country, from luxury high-rise apartments in the city, to beautiful beachfront condos in the Pacific and Caribbean coasts.

On the other hand, infrastructure development has played a key role in driving real estate in new areas, because of the improved transportation networks, including highways, future bridges, and new metro lines. These new infrastructures are unlocking new opportunities for residential and commercial expansion.

The country’s capacity to be a connecting hub (thanks to Tocumen Airport), as well as being a cruise destination (thanks to the new Cruise Terminal), has the potential of keep growing the tourism sector, the government’s effort to promote tourism includes the development of integrated resorts which combines residential, commercial and recreational alternatives (e.g. Buenaventura), this enhances the real estate demand for beachfront condos and leisure properties.