Without a robust MLS or data tracking companies like Zillow or Trulia, it’s hard to gauge where we are at any one time in the real estate market cycle here in Panama. But as the age-old saying goes, “hindsight is 20/20” and anyone who called the bottom on real estate prices back in 2012 pretty much nailed it.
So where are we now?
Pricing trends are hard to gauge in Panama’s real estate market mostly because there is still no single source of reliable closed transaction pricing data, meaning the only robust source with enough data points to start drawing conclusions is public listing websites like encuentra24.com. However, these too are often fraught with bait-and-switch properties, duplicate listings (sometimes with different prices), and properties for sale whose prices have not been updated for years (and which may in fact be sold).
I run a team of 15 and the best way we’ve been able to analyze the market is by using a small portion of the market’s overall transactions combined with trends we’ve recorded over the last 8 years to draw conclusions.
What I can tell you is this:
– The transaction volume over the last four months has been nothing short of exceptional
– Our “days on market” metric has been reduced by close to 25%, meaning properties are taking 25% less time than they were at this point 12 months ago
– Local developer’s ability to pass on higher prices and similar absorption implies that they are seeing the same activity
– Our competition is just as busy
Factors such as the European immigrant crisis, the financial market correction, and the pending US election all are driving buyers to consider Panama real estate and headwinds like the strong US dollar haven’t kept buyers out. In 2016, Panama is predicted to have the strongest economy in all of North, South, and Central America.
This year, we’ve got infrastructure investment getting starting again (after a 16 month lull), the opening of an expanded Panama Canal, a pro-business administration starting to get into the swing of things, and stalwart service-sector industries like banking and logistics continuing to plug away.
Internationally, Panama City continues to enjoy the reputation as a safe place to live and work which means continued immigration from places like Venezuela, Eastern and Western Europe, and other parts of Central America. Investors seeking the protection of a dollar-based hard asset have not been thwarted by a strong dollar, and even a correction in the dollar will bring back main stream buyers from places like Canada and Brazil who are currently on the sidelines.
There is no reason that the downtown condo market wont see gains to the tune of 10% this year, particularly in areas like Balboa Avenue, Punta Pacifica, and El Cangrejo. And I see that trend continuing for the next 2-3 years, with a tipping point coming in 2018. 2018 in particular is interesting because it will be a pre-election year in Panama, meaning lots of last-minute spending. During that time the construction of Metro Line 2 will be nearing completion, Metro Line 3 and the subsequent bridge over the Canal will be well underway, and the expanded Panama Canal will be fully operational with all the kinks worked out.
