Panama City has been experiencing a real estate boom since 2005 and now with over 200 buildings over 20 stories under construction some people are predicting a real estate market crash in Panama City. This is not going to happen.
A Panama City real estate property market crash isn’t happening because rental returns are still performing well even with the addition of new apartments. Many landlords are reporting an average of 7% net annual yields in Panama City.
Many so called “experts” were predicting a real estate market crash in Panama City back in 2008 when the U.S. real estate market crashed. It didn’t happen. Their erroneous predictions were based on the supposed reliance of Panama on the U.S. economy. Panama proved it can rely on itself with its strong banks, low inflation, and healthy economy. The predicted real estate market flooded with too much inventory didn’t happen. Even though many of the planned buildings were built, some weren’t, so the market wasn’t inundated with too much inventory.
Another reason is that it takes time to build an apartment building of 20 or more stories. That’s because it is difficult to find enough construction crews to simultaneously work on apartment buildings. Panama banks also slowed down their disbursements after 2008 and made less mortgage and constructions loans too. This allowed the Panama City real estate market to sort itself out so the entire inventory did not come online at the same time. Buildings get completed later than originally anticipated so as not to flood the market.
And another reason is that not every new building was intended for residential usage. Many of them are hotels and office buildings. Even residential buildings in Panama City include middle class residency along with high end residency. Office towers and bank buildings are being constructed all over Panama City.
Many construction cranes dot Panama City’s skyline. Investors from Colombia, Venezuela, Europe and North America continue to move to Panama in increasing numbers due to Panama’s recent liberal immigration visas and residency programs.
In addition, many multi-international corporations are setting up regional headquarters in Panama taking advantage of another liberal immigration program specifically for them. There is even a new city being built on a former USA air force base especially for companies, called Panama Pacifico, which offers incentives like liberal immigration visas for key employees, slackened labor laws, and tax breaks for the many foreign companies moving there.
Another upcoming Panama City suburb called Costa del Este offers apartment buildings and office towers close to the international airport.
With all of these foreign companies setting up shop in Panama City and its suburbs there is a growing need for their foreign employees and their families to find housing.
Tourism is also increasing every year offering an alternative to Miami as a city to shop and be entertained without the hassle of applying for a U.S. immigration visa.
As you can see there are many reasons supporting the fact that there will be no real estate market crash in Panama City. So, don’t wait. Strike while the iron is hot. The time is now to not only consider moving to Panama, but actually move here.
