Searching for the cheapest cities to live in Panama for retirement or relocation is a common and very valuable pursuit. After all, the low cost of living is one of the big motivations people have in moving to Panama. It’s a small country, but despite its size, has a lot of options when it comes to where to live, and why you should live there. Prices in Panama, much like anywhere else, can fluctuate. Where you live, and what lifestyle you choose to live can factor in heavily in terms of the cost of living in Panama. In general, however, there are distinctions between the cheapest cities to live in in Panama and the most expensive ones. Here’s how we break it down.
What is considered “cheap” by Panama standards?
Panama is a country of contrast when it comes to pricing, but one aspect of the Central American nation makes it easier to calculate costs than the rest: the US dollar. Panama uses the US dollar as currency, although technically referring to it as the “Balboa”, all paper currency is US tender, with certain coin currency minted domestically. Panama’s dollarized economy means that, unlike in its neighboring countries, inflation and market price changes are not drastic. The dollar keeps Panama’s prices relatively stable, though how “cheap” is defined becomes a bit more complicated.
The minimum wage in Panama is scaled monthly and is between $500-$650 per month depending on the industry. A middle-income wage could be considered anywhere between $800-$1,500 per month, while what would be called “good pay” can go from $1,500 per month on up. It’s important to understand these distinctions when looking at the cheapest cities to live in in Panama. Cheaper cities are often cheap because of the potential earnings power and spending power of the locals. Areas, where the cost to live, is low will not typically have many jobs above the monthly $1,000 income mark. Additionally, they may not have tourists or foreign-earned income spenders that live or visit there frequently.
For the sake of this breakdown, as it is geared towards people who have recurring foreign-earned income or have investments in Panama with high yields (compared to wages), we’ll just look at the raw price of things. Keep in mind, however, that if you’re looking to work and earn an income in the cheapest cities to live in in Panama, you must scale pricing to earnings power to get the same value. Here are our picks, and a bit about each city to describe what life I like in each one.
Santiago, Panama is a mid-sized city in the country’s geographical central west region, right on the Panamerican Highway. It is a hub for ground transportation and trade in the country’s interior, and a popular connection point between David and Panama City. It is also a popular connecting point to the Azuero Peninsula to the south. Santiago has a very low cost of living and is one of the cheapest cities in Panama for nearly everything. Monthly food costs are around $80-$120 per month, per household for basic necessities. Utility costs are standard, with electricity running around $25-$30 without A/C, and about 3x that with moderate A/C usage. Rent is very cheap, even in the city, with decent 1-bedrooms going for as low as $400-$500 per month.
Though often referred to as Panama’s “2nd city” due to its historical significance and location at the northern mouth of the Panama Canal, Colon is one of the cheapest cities to live in Panama as well. This cheap cost of living, however, comes with a price, so to speak. Colon tends to have very poor infrastructure, floods a lot, and has higher crime than most other urban areas of the country. That’s not to say that there isn’t a good quality of life to be had in Colon, but rather that you need to do a bit of due diligence before deciding to live there. Rent prices in Colon are similar to Santiago with about $400-$600 covering pretty nice 1-bedroom housing in a reasonable part of town. Food prices are low, and utilities, though unreliable, are lower than the national average.
For people looking at the cheapest cities in Panama who want to escape the hustle and bustle of the country’s center east, David is a great option. This is a city that is growing, has a very low cost of living, and very high quality of life. David is located about 40 minutes from the beautiful town of Boquete by car, and about 20 minutes from some very nice beaches. Rent prices in David are a bit higher than Colon or Santiago, however, the infrastructure is better in both cases, and the space you get for the price tends to be bigger. It is not abnormal to have a full front and back yard in David in a home that rents for under $1,000 a month and has multiple bedrooms.
Though not in Panama City proper, the city of La Chorrera is considered to be a part of the larger metro region and a popular suburb for workers in the capital. The location is roughly 15 miles west of Panama City, reachable by highway via car or about two dozen different bus lines. The main growth of La Chorrera has actually come from its proximity to Panama City, as well as its status as one of the cheapest cities to live in in Panama. People who work in Panama City can enjoy higher wages, yet live their home life in a place where the daily cost of living is nearly cut in half. Food is cheaper in La Chorrera, rent is about 40% cheaper, and services are cheaper as well.
The drawback is that despite its proximity to the capital, traffic in and out can be a nightmare. During peak rush hours and holidays, it could take between an hour and two hours to get from Panama City to La Chorrera each way.
The last in our list of the cheapest cities to live in Panama is Penonome. This is a small city, but a unique one, as it has a lot of folkloric history and tradition that represents it. Penonome is also in the center of the country, and it’s famous for its yearly Carnaval celebrations, parade, and culture. It’s about two hours from Panama City, and surrounded by a dense rural area. This feels like more of a town than a city, and the prices do too. Rent in Penonome is very cheap, except during Carnaval seasons, where daily rents can be as high as $200-$300 per house for tourists. That being said, a full-time life in Penonome is low-cost, and high quality of life. Goods and services cost very little, dining out is very cheap, and transportation is cheaper than in most cities in Panama.
Due to its unique situation as a Carnaval destination, Penonome presents a great investment opportunity for those who want to live in one of the cheapest cities in Panama and generate income. The income potential comes from both Carnaval tourism and interior tourism during the month or so preceding Carnaval. This means that Penonome can be used as a part-time home, part-time property investment opportunity if done right. It should be noted that properties for sale do not come up often, however, the pricing is fairly good when it does, and the cost of living there is very cheap.
How do you know if living in any of the cheapest cities in Panama is right for you?
Like anything in life, one must weigh the pros and the cons before making a decision that’s as big as relocating. This is especially the case when it comes to relocating to a new country. While living in one of the cheapest cities in Panama has a huge financial appeal, it may not have a full lifestyle or comfort appeal for some expats. You really need to think hard about what you’re giving up for the price. Are you OK with living in a city without many other expats? Do you require better access to an international airport? Will you be comfortable with less developed infrastructure, and simple housing? These are all things that one must ask themselves in consideration.
Living in any of the cheapest cities in Panama can be a tremendously rewarding experience, however, if you find the right fit. The financial benefits are clear, but the lifestyle benefits that go with it can also be very pleasant for the right people. We recommend that before you make any decision to commit to these cities, you visit first. Get a first-hand look at what these cities are like. Talk with locals in these communities, and outside of them, and get their take. Look at your budget carefully and see what you can afford, what you can’t, and where the value lies in your budget.
Panama has options that range from very cheap, to very expensive, and everything in between. If living in one of the cheapest cities in Panama doesn’t seem like a good fit, there are plenty of other options all over the country that will fit perfectly. You have to do some research and some soul searching when considering your move to Panama.
For more info, or to reach out with any questions, comments, or concerns, contact International Relocation Firm here.