This last week saw ACOBIR (the association of realtors) hold their 3rd annual congress regarding real estate in Panama. Leading up to this congress, most of the newspapers and analysts were publishing the numbers for the first semester (or through to the end of August). Hence, we are putting out this Oct-2018 real estate update, with a summary of the market figures.
The following compilation of numbers summarises facts and figures found on the site: www.CentralAmericaData.com
Oct-2018 real estate figures
Construction in Panama is down about 40%. As many people know, the 2008 financial crisis crippled the Panamanian real estate market. This market was stalled until at least 2012. 2017 finally saw sales start to move again, but Panama also has to cope with a glut of over-construction.
So, in the January – August period, completion of new apartments fell by 8.8%. That said, $608M was invested in the Panama real estate market (apartments and houses) in the first semester of 2018.
At the moment, there are more than 17,000 apartments on the market. This accounts for approximately 8.2% of the market. This is up from previous years, which were lower than 8%. A Class apartments (those over $250K) fell to about $2980/m2 (about $298/f2). And, B class apartments (those between $160K-$250K) have fallen to about $2,180/m2.
Rentals have also dropped – with some commentators indicating a 20% drop in rental prices for residential rentals. For warehouses, a similar drop to $8.40/m2 for Class A warehouses, and $5.90/m2 for Class B warehouses.
Potential legislation
Under review at the moment:
Legislation which governs realtors, licensing, advertising, rentals & sales & inspections is currently under review by the construction industry & ACOBIR. The Ministry of Commerce expects this legislation to be in force by year-end. This modifies Law 6 (1999).
Transport Infrastructure (Oct-2018 Real Estate)
In early 2019 – before the JMJ which will see hundreds of thousands of youth visit Panama to see the Pope – Panama expects to inaugurate the 2nd line of the Metro. This runs from Pacora (past Tocumen International Airport) into San Miguelito – La Gran Estación. Basically – this will join up with Line 1 of the Metro, where trains will be running with 5 carriages, rather than 3. This is already resulting in increased construction and housing options in Pacora and further towards Chepo.
Line 3 of the Metro – which depends on the construction of the 5th bridge across the Canal – is expected to reduce traffic coming in from the East Panama province into the city. A great number of people live in Arraijan and Chorrera, commuting daily into the city to work. People in the province of East Panama are already complaining about the increased cost of construction there, because of the anticipated metro line.
China invests
Finally, Panama has signed an agreement with the Chinese government for investment into a high-speed train line. This will run from Panama City to the border with Costa Rica. It will make travel from Panama to David quick & easy. Urban regeneration in each neighbourhood around the expected train stations is anticipated.
This follows on from the October 2017 change in Panama’s immigration policy with respect to China – where Chinese citizens can now request only a stamped visa for Panama, rather than authorised. In December 2017, China changed Panama to “approved tourist destination” and Panama now has weekly flights coming in through Houston – Air China.
Additionally, in 2017, Panama changed the rules regarding the Economic Solvency visa, allowing foreigners to use a corporation or foundation to purchase property and still qualify under the visa (previously they could only purchase in their personal names).
For assistance with real estate purchases in Panama, please contact our office and speak with Joan Villanueva.