Panama property: doing better than many markets, but not immune to the global downturn
The Panama real estate market is changing. Yes, list prices for real estate in resort communities, condo towers and gated developments in Panama are falling for the first time since the boom. But before we get caught up in the gloom, the good news is the falls are smaller than those we’re getting used to seeing elsewhere in global property markets.
The picture in 2009
The chart provides a snapshot of where things stand in 2009.
- By price per square foot, beachfront condos top the list at $253. But in terms of overall price, ocean view houses rank as the most expensive property type with a median price of $624,600.
- 5 property categories break the $200 per sqft price point: beachfront condos, ocean view condos, urban view condos, ocean view houses and water view houses.
- Of the 10 most expensive real estate developments catering to international buyers, 9 are located in Panama City. Donald Trump’s Ocean Club tops the list with a median price per/sqft of $483 for remaining apartments (see below).
Comparing with prices in 2008
Panama real estate prices have fallen since 2008 but the falls are relatively small when compared with other markets around the world. The median price per square foot has declined 3.55% for serviced lots, 2.02% for condos and 6.8% for single family houses between 2008 and 2009.
Panama is certainly not immune to the global economic downturn. You just have to look at the fall in GDP growth rate from 11.7% in 2007, to 8.3% in 2008 to a predicted 3% in 2009. But the country is still beating regional averages across a range of economic indicators and many remain optimistic about the country’s ability to ride out the economic difficulties, particularly with recently elected President Martinelli at the helm.
It’s a new market in Panama
Things may still get worse before they get better. Local developers and real estate agents are warning about project delays and closures. In areas where a high level of sales have been made pre-construction (such as Panama apartments in Panama City) more price falls are expected as buyers default on their payments. And resale prices are already significantly undercutting developer-direct prices in many areas.
Sellers, used to riding the long boom years, are slowing coming round to the fact that it’s a new market in Panama.
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Carnival of Real Estate #152 Pressing Towards the Goal | Property Indexer
Jul 27, 2009
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