Is now a good time to buy Panama Apartments?
July 6th, 2010
The boom years for Panama City apartments (or condos) is well documented. The city’s status as the region’s most important financial center, its good transport links and shiny new infrastructure projects saw a flurry of investors snapping up apartments, mostly off-plan. Buyers arrived from well known destinations such as the US and Canada and from the more unusual, including Venezuela and Colombia.
But as the global financial crisis took hold, the whiff of oversupply grew stronger. The speculator who had been driving the market retreated, sales volumes dropped and a number of condo projects stalled or suspended operations completely.
Now, as we enter the second half of 2010, some market watchers are saying that it’s a good time for investors to come back into the Panama City apartment market. That inventories are high, sellers are motivated and it’s time to push for a bargain.
Unfortunately accurate price and transaction data is hard to find in Panama – something we’ve written about before. Often the best insight into what the market is doing comes from special offers at individual projects, a review of asking prices (ideally compared with previous years) and feedback from real estate agents on the ground.
After reviewing our database of Panama property prices and contacting local agents we were able to find examples of completed apartments priced at 30-40% below 2008 levels. These falls are not across-the-board as some developers are holding their asking prices firm. It may be a buyer’s market for apartments in Panama City, but don’t except (all) vendors to throw property at your feet.
Here’s our advice for those looking to get into the Panama apartment market:
- Refine your search to established condo towers in prime areas that are completed.
- Avoid off-plan purchases.
- Buying re-sales from individuals may be a better option than purchasing directly from developers.
- Be very clear about your objectives. Are you planning a Panama retirement? Are you more interested in a vacation home? An investment?
- Build a network of local contacts to bring you real-time deals and get up to speed with what the best local market commentators are saying.
- Don’t assume you’ll be able to get the kind of financing terms available before the economic downturn. The availability of mortgage finance has slimmed.
- Finally, take your time. Be careful not to be seduced by discounts and incentives so that you forget considerations of value.
From Reveal Real Estate - charting overseas property trends in Central America.
Tags: Panama, Panama apartment, Panama City Real Estate
Posted in Investment Strategies, Market statistics and data | 8 Comments »
When overseas retirement looms, retreat to Central America
June 20th, 2010
With close to 100 million Baby Boomers hitting retirement age in the next ten years, locations to live out the golden years have become a hot topic, and Central American countries are getting their fair share of attention. But what makes these relatively unknown and moderately misunderstood destinations a good choice for senior living? And which countries boast the best place to hang your hat for the foreseeable future? Read on to find the top Central American countries to call home.
1. Nicaragua is at the top of the list of places to retire abroad for those on a budget. The country’s benefit-laden retirement program was revised in 2009 and includes incentives such as no tax on foreign earnings and duty free imports from automobiles to household items. This combined with the innovative Law 306 (tax and import duty exemptions for tourist-related ventures), and the lowest cost of living in the region does much to encourage retirees to the country. And yet, Nicaragua has not yet realized the kind of influx that Costa Rica and Panama enjoy. Some put this to the ‘close relationship’ that the current President has with Hugo Chavez, the controversial leader of Venezuela. But others stress the ‘early in’ nature of the real estate market and it’s potential for future growth.
- Learn more about Nicaragua real estate
- Learn more about Nicaragua property prices
- Learn more about Nicaragua retirement
2. Panama still beats expectations. Between the beaches (70 to 90 degree weather year-round) and the highlands (50 to 80 degrees and less humidity), you’ve got a range of climates to choose from. But the real perks of retiring here include a stable government, modern banking (the U.S. dollar is legal tender), tax benefits (no tax on foreign-earned income, property tax breaks), and solid roads and telecommunications. The boom years saw hundreds of new condo towers in the capital city (see more analysis on Panama apartments) and real estate projects launched across the country. This was followed in 2009 by a marked slowdown in sales activity. Some over-leveraged projects stalled or suspended operations and re-sales were offered at large discounts. But as we enter the second quarter of 2010, local real estate agents note that enquiries are rising again.
- Learn more about Panama real estate
- Learn more about Panama property prices
- Learn more about Panama retirement
3. Belize offers the classic Caribbean experience mixed with a long-standing culture of ecotourism. It’s a tiny country packing a remarkable amount of diversity between its borders - tropical forests, mountain summits, a palm-fringed coastline and the longest barrier reef in the Western Hemisphere. Belize stands out as being a true banking haven (retaining high levels of liquidity through the recent banking crisis) with strict secrecy laws. A major bonus for retiring overseas in Belize is that the official language is English and the legal system is based on British law. Things have slowed since the financial crisis (except perhaps in Placencia where the market seems to be booming) and commentators talk about a more stable and less speculative market taking hold.
- Learn more about Belize real estate
- Learn more about Belize property prices
- Learn more about Belize retirement
4. Costa Rica has long been considered a great place retirement overseas and for many years set the benchmark to follow for other Central American countries. More recently however, its retirement program has fallen behind its regional neighbors that offer more incentives aimed specifically at retirees. As it’s only her second day in office, it’s too early to see what Laura Chinchilla, Costa Rica’s new President, has planned. The capital city of San Jose and the Central Valley region seem to be bucking the general slowdown and attracting an ever-growing number of retirees. The northern Guanacaste region also appears to be climbing back after a difficult year in 2009.
- Learn more about Costa Rica real estate
- Learn more about Costa Rica property prices
- Learn more about Retiring in Costa Rica
Guest post contribution by Sarah Harris, of Zen College Life, the premier directory for online degrees. Find out more information about a psychology degree.
Panama property: doing better than many markets, but not immune to the global downturn
July 26th, 2009
The Panama property 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.
From Reveal Real Estate - charting overseas property trends in Central America.
Tags: Panama, Panama apartment
Posted in Market statistics and data | 1 Comment »
The real estate market in Central America: In graphics
March 28th, 2009
Whether you’re in the market for real estate in Central America, or you are selling, market data matters more than ever. Without data how can you determine fair value, track where the market is heading or feel confident that you are making the right investment decision? Trouble is, in Central America market data and comps are not readily available from property institutes, registries or central bank databases.
To try and fill this data gap, we’ve collected data from real estate developments in Panama, Costa Rica, Nicaragua and Belize and put this information online. As part of our research we also collected country-level indicators that shed light on the investment climate. Here are some highlights from what we have found:
Real estate developments targeting the international buyer
Costa Rica has the largest number of real estate developments that target the international investor, with 34% of the total in our database. No surprise really. It’s been on the international real estate map for longest. Panama follows close behind. This is largely due to the explosion in condo projects in recent years in the capital city selling Panama apartments.
The price for an ocean view condo
The order from most expensive to least expensive country to buy an ocean view condo is Costa Rica - Belize - Panama - Nicaragua. The data looks at median price per sq.ft.
The ordering is what you would expect given the different levels of maturity of the markets and level of infrastructure. But did you think the differential between Costa Rica and the other countries would be greater? We did.
The average size for an ocean view condo in Costa Rica tends to be larger than in other countries, which may explain part of this. Click here for a more in depth review of Belize condos. We’ll be publishing more data in later posts to dig into the comparatives further.
Internet searches on Google
There were more searches for ‘Costa Rica real estate’ on Google than for ‘Panama real estate’, ‘Belize real estate’ and ‘Nicaragua real estate’ combined. We predicted the order, but again were surprized by the differential between Costa Rica and the other countries - this time in the other direction.
Cost of living
Nicaragua stands out as offering the lowest cost of living. Using purchasing-power-parity (PPP) data we can determine what US$1,000 ‘adds up’ to in different countries. In the US $1,000 has the purchasing power of $1,000, but in Nicaragua it has a purchasing power equivalent to $2,629. We have to be careful not to draw too much from these averages as they don’t apply to all product categories. But for day-to-day goods and services your dollar will stretch further in all four countries than in the US.
Completed golf courses
There are several golf courses planned or under construction in the region. At least 3 in Nicaragua and 3 in Panama. The data below is for completed golf courses that can be played on. Before seeing the data, would you have guessed that there would be more than 2 completed golf courses in Nicaragua? See more on golf property.
The data is drawn from research done in 2008, see notes to the data for more information. We’ll be updating for 2009 and charting the trends. Dig into our main site, run some searches, and check out the property hotspots and country indicators for Nicaragua, Panama, Costa Rica and Belize.
What’s your reaction to this data. Any surprizes for you?
From Reveal Real Estate - charting overseas property trends in Central America.
Costa Rica tops our list coming in first and second. In fact, 3 of the 7 regions fall within Guanacaste, Costa Rica’s northern state. The data is based on our database of real estate developments in Costa Rica, Panama, Belize and Nicaragua. Nicaragua, being a cheaper destination than the other countries, did not make the list.
1. The stunning coastline of Coco, Hermosa and Papagayo in Costa Rica’s Guanacaste region tops our list. Here the median price for an ocean view condo is $340 per sqft. The region is packed with amenities from tennis clubs and marinas to championship golf courses and luxury spas. It has some epic surf breaks, good infrastructure and is very accessible from Liberia’s international airport. Celebrity purchases, major hospitality brands and top class attractions abound in the region so it’s not surprising that it tops our list.
2. Just next door, also in Guanacaste, lies Flamingo where the median price for an ocean view condo will set you back $305 per sqft. Tourists are attracted to the spectacular beaches, the world-class sport fishing (there’s an international tournament every year) and the numerous dive spots.
3. Ambergris Caye comes in third. It’s the most visited part of Belize and offers the picture postcard Caribbean experience - sparkling white sand, azure waters, swaying palm trees and a great barrier reef just off shore. Belize condos are the main draw on the island. And for a median price of $290 per sqft, you’ll be on your way to owning an ocean view condo in this important tourism area. The added bonus for many international real estate investors: you won’t have to learn another language as Ambergris Caye is English speaking.
4. Fourth on the list is Tamarindo located, wait for it, in Guanacaste Costa Rica. Long recognized by surfers for its great waves, Tamarindo now offers something for backpackers, luxury travelers and everyone in between. You can take advantage of lovely local beaches - some with turtle nesting areas, dive spots, golfing, numerous night-spots, restaurants and, of course, plenty of sunshine year round. An ocean view condo clocks in at $285 per sqft.
5. Jaco lies on a wide, grey-sand bay on Costa Rica’s Central Coast in Puntanrenas. Well known hospitality brands such as Sonesta, Ramanda and Wyndham have set up store along the beach front and you’ll lose count of the internet cafes, curio stores, tour agencies, souvenir stands, bars, restaurants and nightclubs that jostle for position on the main road. You’ll find ocean view condos here for around $280 per sqft.
6. Our second Caribbean region, Bocas del Toro, in Panama comes in 6th. If you want an ocean view condo here you’ll be looking around $275 per sqft. The cluster of islands that make up the archipelago have become a key tourist destination for visitors to Panama. Unusually for the Caribbean, you’ll not only find great local dive spots but also some good surfing waves.
7. Cosmopolitan Panama City with it’s soaring skyline of glass and steel comes in 7th. The town is a world class financial center and business hub that offers a range of exciting experiences to visitors. You’ll find a vibrancy here that is rare in Central America. Investors looking for US style infrastructure, excellent health care and a benefit-laden retirement program tend to look no further. You’ll need to lay out around $265 per sqft. for an ocean view condo. Click for a 2010 update on the Panama apartment market.
The data was collected during 2008. We’ll be updating for 2009 and tracking the trends.
So tell us, would you buy in one one of these property hotspots?
Tags: Belize, Belize condos, Costa Rica, Panama, Panama apartment
Posted in Comparison shopping, Market statistics and data | 1 Comment »