This month we explore the ebb and flow of Panama real estate: from gigantic infrastructure projects to shortages in supply (not an April Fool’s joke). We take a look at price drops on the famous Avenida Balboa as well as a new company using sea planes to explore Panama’s hundreds of islands. Never a dull moment!
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Big Numbers from the government
Panama Canal toll revenue being put to good use!
Five billion. That’s the total amount that the Panamanian government is going to be spending on infrastructure and public works projects over the next several years. Included in that number is a new bridge crossing the Canal from Panama City, the construction of underground parking in strategic parts of the city, the cleaning of the Bay of Panama, and several major road projects in interior provinces. That’s a lot of money for a country of just under 3.5 million people.Panama City, with its 1.5 million residents will be benefiting from:
-Less traffic by way of new avenues and new methods of public transportation
-Better circulation via added parking facilities
-New routes into and out of the city
-A true waterfront with…dare we say it…a swimmable beach?
Imagine that kind of money being injected into a city like Atlanta or Calgary…the impact on jobs, wages, and of course real estate values. Most of our readers can relate to at least a small scale urban revitalization project brining new value to their area, weather it be a park improvement, highway expansion, or a river clean-up project. In the end, these kinds of government initiatives improve quality of life for millions of people, including residents and visitors.
Balboa Avenue Report
News you can Use!
News you can Use!
For those of you that have been following our neighborhood reports, you will remember that we published findings of a pricing-trend study we commissioned for the Avenida Balboa district about 10 months ago. This is a follow up to that report.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.
Temporary fire sales in buildings such as H2O, Element, and Sky lasted less than 45 days. During that time, we were seeing sellers unload units for an average of $1,800 per square meter which usually represented a loss for them. These types of deals are no longer available, as all of the desperate sellers have been flushed out.
Keep an eye out for potential deals in the next projects to get delivered, which are WHITE and WATERS, both due for completion between the 3rd and 4th quarter of this year.
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.
El Shortage
Supply for sub $1,000,000 apartments is short
Who would have ever thought that in 2011, amidst the cranes and hundreds of construction projects in the city, we would ever see the word “shortage” as it relates to real estate, but it’s true!
Over the past few months, we have worked with several high-profile families relocating to Panama, all of whom were looking for a 4,000 square foot, four bedroom condo in Punta Pacifica for under $1MM. The sad fact is that there are very few buildings offering this type of floor plan and even fewer in construction. Our short list of options included one very beautiful condo in the Pacific Point project (a total remodel, with a fourth bedroom added), a Penthouse in the Aquamare building, Blue Bahia, and a unit in the Bahia Pacifica project. That was it!
We ended up finding something that they loved in one of the buildings above, only because there wasn’t much to choose from! If you’re looking for a high end investment property, rest assured there’s a market for it. Let us know and we’ll match you up with a seller and a tenant without issue!
Resources for researching Panama
Happy to share what we know
Happy to share what we know
Like most of you, we are always looking for good information on Panama. This month, I came across a pretty thorough, albeit fairly “polished” website that the Panamanian government just rolled out. You can see it here:
http://www.meetpanama.com.pa/
We also always like to have an eye out for news in Panama. Here’s a great site for Panama news:
www.newsroompanama.com
Here is someone that took the initiative to set up a company that was really needed in Panama…Sea planes that can explore Bocas del Toro, the Pearl Islands, and the hundreds of other outlying islands in Panama. This new company is supposedly getting their certification this week. We look forward to some awesome adventures! http://www.toucanseaplanes.com/
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