An increase in the cost of construction permits, new rates for services from public entities and a more expensive labor force explain a large part of the increase in real estate sales prices.

The guild of construction companies in Panama states that prices for homes, shops and apartments are so high that in many cases buyers can not afford them. The increase, they say, is not due to increases in the cost of construction materials, but to an increase in the cost of paperwork, such as building permits, higher interest rates for loans and the elimination of some subsidies.

According to Iván De Icaza, president of the Panamanian Chamber of Construction (Capac), on top of this are  “… delays in payments to state contractors, the costs of labor and delays in the payment of Preferential interest subsidy to banks.”

In addition, the builders claim, approval has been given to “… inconvenient or contrary laws, which far from incentivizing the industry, place further burdens on construction costs.”

“… Obviously, according to Icaza, the construction industry is not in a favorable situation, because there is finished inventory, both commercial and residential, but sales prices have been maintained or dropped, while construction prices continue to increase.”

Capital.com.pa reports that “… According to the collective agreement, Capac-Suntracs (Labor Union of Construction Workers), workers salaries have increased by 56.4%, when compared to 2007, that is to say in 10 years it has gone up by $278.72 dollars.”