While still about 40% the cost of construction in many countries, we are seeing a rise in labor and material costs for building in Panama.  I built a luxury home for about $1,100 a M2 in 2014 and current prices on a luxury home that I am building now is up to around $1,250 per m2.  Prices in the City are much higher still.

According to figures from the builders’ union, from January 2015 to June 2017 the average price per square meter of homes built in Panama City increased from $1,700 to $2,050, which represents an increase of 21%. Added to this situation are the increases in the minimum wage and in the prices of construction materials.

Héctor Ortega, president of the Panamanian Chamber of Construction (Capac), told Panamaamerica.com.pa that “... ‘ The problem is that, in the case of Panama, the higher the wages, the less productivity there is and the higher the construction costs are. The formula needs to be balanced with training, education, process automation. But what happens in Panama is that the increase in wages leads to a loss of competitiveness in the construction sector at the regional level.“

Regarding the situation, the vice president of the Panamanian Association of Real Estate Brokers and Promoters, Aldo Stagnaro, indicated that ” …” Whereas before apartments were built measuring 60 square meters, now they will be 55 m2. Either way, the buyer will be the affected party, as they will have to adjust to a new size or pay more.“