I decided to see what was happening in Panama City as it relates to the condominium market, as I am often asked to help out in finding or selling a place for some of my readers and clients. Lacking a MLS system, Panama remains in a gray zone of “no one really knows and no one ever tells” exactly what is going on. You must rely on professionals who know the market and know the developers personally, not just the sales people. They are involved in not just tabulating statistics but as we say in the business, “creating them”. I have a few people in the city that I know and trust and one that I can vouch for who is just such that person. He is the hardest working agent there who has dedicated himself to specializing in one market, Panama City, and primarily one product type, residential condominiums. He has made a lot of money over the last few years and much of it since the downturn finding excellent buys and representing a lot of buyers. Here is what he sent me.
Avenida Balboa Panama
Developer’s published pricing on their yet-to-be-delivered condo units along Avenida Balboa have come down just under 5% over the last 10 months. According to interviews with agents representing Habitats Realty, Bern, Btesh and Virzi, and Cityland, buyers are still coming in from places like Russia, Europe, and of course Venezuela, but demand from the North American market has slowed down significantly.
Price lists for the following projects in construction: Rivage, Waters, White, Arts Tower, Yoo, and Villa del Mar show anywhere from 60-95% of the units as marked “Sold or Reserved”. The important question, which only time will tell, is how many of the buyers are prepared to close.
As a supplement to our data, gathered by canvassing buildings, interviewing developers, and compiling listing data online, we have also started what may be Panama’s first shared MLS, designed in-house to capture sales data from fellow brokers. Think of this as a compiled and shared sales history from Panama’s top-selling agencies.
Over 450 units have been delivered in the last 12 months, which represents a 32% increase in total constructed inventory.
Trends: We are hearing from residents along Balboa avenue that the noise situation has improved significantly with the phase in of the new buses, however Panama is and will remain a very noisy city.
Average price per square meter in a building less than five years old has seen a 9% price reduction in the last ten months, from $2,320 to $2,097 per square meter.
Rental demand for high end, fully furnished two bedroom units like Sky, Destiny, and H20 remains strong, with average days on market for a competitively priced unit($2,000/month or less) at less than 30 days.
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When I look at this report, I see some similarities to Miami before I left but the main difference here is that while there might have been a lot of speculation and second or third home buying, there was a lot less leverage and certainly no NINJA loans by bank (No Income, No Job, No Assets) like there was in the US. Lenders here place a cap at the price per square meter then say ok, we will lend on 70% of that basis. Also, a lot of product was also sold all cash.
If you need assistance with anything in the city, drop us a line and we will make sure you meet the right person first. tbrymer@brymerpa.com
About the Author
When looking at this and other places you have to look at the numbers to put things in a bit better perspective. “450 units have been delivered in the last 12 months” Florida I think at the peak was doing more than that per week. This is the fastest developing city in Central America with people and multinational businesses moving here from all over the world and GDP growth rate of about 9% and the construction rate of high-rise units is a little over 1 per day and these are the buildings that were started during the boom time. If a person were to look at new starts in Panama it is very low. So the “glut” of apartments in Panama in very small and yes as each building comes on line there is some opportunities that come up. This to will end very soon as there will be fewer building being completed in another year or so. Second thing to look at is price per m2 or price per ft. The high-end balboa ave prices are running $200 per foot and the good deals are $180 per foot. Bank repos in down town high-end buildings in Reno NV (small town/city in the US in one of the most beat up states in the US) are at $150 per foot. Panama is becoming the major business center and only real city of Central America. Prices are still cheap for a city of this growth rate and class. There is a very minimal over supply of apartments and that will be ending soon. Building are now being completed very few are now being started. Simple math Panama is still a good place to be and getting better, now (as in over the next few years) is a good time to buy if you want to be here and probably a good investment over time as well.
Thank you for publishing this sensible analysis and perspective on the current state of Panama real estate. You editorial, and the peice from your “trusted real estate person” , together with the reply comment by Jeff Duda are some of the most realistic comments about Panama Real Estate I have read in the past few years.
My contribution to the discussion is this…I have first hand experience that there have been dozens of honest sales this year along Avenida Balboa and in Punta Pacifica… and I know from the number of inquires I have there are lots of buyers still out there waiting to find bargains when they see them in buildings such as Pacific Village, Loft Four 41, Waters, H20, Destiny, Sky, Vista Del Mar, Bayfront Tower …there are others, but these are the ones I am most familiar with…and I know that when a seller has a unit on a reasonably high floor, and with good views, and the price is reasonable ( $1900 to $2000 per m2 for Bayfront, Destiny, H20, …and $2000 to $2200 for the others )..then a sale results within a couple of months of being advertised ( I know because I had many clients this year wanting to buy them…but they were sometimes too slow, and they were already sold!) . Also, even buildings such as SeaWaves Tower, which is 5 or 6 blocks from the Ocean but has excellent location, is in high demand when the unit is ona high floor and the asking price drops below around $1700 per m2 (unfinished..no AC , lamps etc ). As Jeff Duda says…there has been some softening of prices over the past couple of years…but nothing drastic like in the USA…and as all the ‘desperate sellers” are weeded out, those that still want to buy in any of these buildings in the next year or so will be forced to pay higher prices…and the market will move up…at least in the popular buildings in the best areas of the city.
Morning folks,
You have got to love Freedom of the Press!! Next thing you know we will have a full blown MLS in Panama. Keep it coming!
Hi
When you look at the numbers there just is not that much unsold inventory. Immigration shows about 7,000 people per year getting immigration status in Panama. If only 5% of those want condos in Panama city that will consume every condo coming on line plus some. The US is now less than 30% of those and most of the people coming from the US do not need loans. There is money starting to flee the US like the money fleeing Venezuela, and it comes to panama as cash buyers for the few condos that are coming on the market. Yes the crazy days of selling 30 condos in a day that could never be built as fast as they could be sold are gone. But with a construction rate of about 1.5 condos per day it is a good thing. As one friend told me when Panama was starting all the paper projects is that no one was considering that Panama could never build condos that fast so the over building would never happen. Over selling yes over building no. He was right and Panama construction rate still can not get ahead of the current growth demand. Although every thing is now going at a more sustainable pace.
Best Wishes
Jeff
Thanks again Jeff for the straight forward commentary.