Panama Real Estate Market Report for Q1 2025: A Market in Transition

Panama’s real estate market thus far in 2025 has been full of contradictions. Tourism is up, rental demand is strong and yet prices on existing condos are stagnant and, in some cases, declining. At the same time, pre-construction developers continue to raise prices, despite fewer closed sales.

For buyers, this is a moment to look deeper than the headlines because the story isn’t just about growth, it’s also about caution and opportunities. We are in a maturing market with a bit of headwind, particularly an oversupply of condos and rising disconnect between new and existing property values.

So, if you’re thinking about buying real estate in Panama, whether it be to invest, relocate, or ‘Is Panama a really good place to retire?’, here’s what I’m seeing and what I think you need to know.

For added perspective, you can also see how the real estate climate in Panama has changed from our August 2024 update.

For a deeper dive, you can also watch the full video here.

An Overview of the Panama Real Estate Market

Panama Property Pre-Construction: High Prices, Low Absorption

As of Q1 2025, there are 16,519 preconstruction condos on the market across 412 projects — a 7.2% decline in inventory compared to last year, but still high by historical standards.

According to most developers and more importantly, Galeria Inombiilaria, sales are slow: just 1,647 units sold in Q1. And while developers are reducing total unit counts and delaying launches, pre-construction prices continue to climb — driven by rising costs of labor, land, and materials.

Some projects now list at over $7,000/m2, even as absorption rates decline. In some cases, it’s a sign of financial pressure on developers who need higher prices to make their numbers work. In other cases, it’s an example of developers trying to test the limits of the market, prior to starting construction.

Investors should take note, as the gap between new and resale property values is widening fast. In some cases, you can buy an existing property for well below replacement cost — roughly $1,100/m2 — which raises a critical question:

Why are buyers paying more for something that will take years to complete, in a market already oversupplied?

I cover that answer in a video from a few weeks ago, but here’s the long short of it: Buying off-plan new construction in Panama allows a buyer to space out payments, take advantage of property tax exonerations, and defer the purchase to a future date.

While the expectation is that the property value will appreciate during that time, this generally hasn’t been the case over the last 10 years in the Panama City, Panama condo market.

Here’s a chart showing the average pricing of Panama real estate for expats in a few key expat neighborhoods in Panama City, Panama.

Is Panama Cheap to Live In?

Neighborhood	Average Price/m2 (Off-Plan)	Total New Condos For Sale in Panama	12 Month Pricing Trend
Avenida Balboa	3,200	540	-(3)
Casco Viejo	4,150	41	4
Costa del Este	3,685	622	0
El Cangrejo	2,930	310	3
Punta Pacifica	4,160	255	-2
San Francisco	2,720	566	2
Santa Maria	4,530	263	-6

Source: Galleria Inmobiliario April 1, 2025

Inside Panama Real Estate Market: Demand Is Up — But It’s Uneven

Tourism in Panama is surging right now, with visitor numbers up 10.1% in 2024 compared to the previous year, totalling 2.7 million travelers. U.S., Canadian, and European arrivals are all up in 2025, with the U.S. up 11.8% and Colombians up a striking 25%.

Anecdotally, I’ve found that many visitors are first-timers, and a growing percentage are expressing interest in the property market after being surprised at what they see.

In this country of 4.5 million, some come looking for a second home, some for a lifestyle upgrade (and corresponding savings on healthcare and cost of living), and some to explore a hedge against uncertainty back home.

To date, this wave of interest isn’t yet translating into broad-based buying but it is setting a very interesting precedent that we are following closely here in the office.

Main Themes Driving Panama Relocation

• Americans are concerned about political and financial instability as well as cost of living and rising crime.
• Canadians are frustrated with real estate costs at home.
• Europeans are worried about war, energy, and inflation.

The verdict: Buyers are here, but they’re cautious. Long decision cycles and higher expectations are the new norm, and many are renting first, rather than rushing into a purchase.

Moving to Panama with young children? Read our guide to choosing the right school for your kids.

Apartments for Rent in Panama: Driving Growth

If there’s one part of the real estate market in Panama that’s thriving, it’s rentals. Rents are up 12% year over year in key areas of Panama City, and demand is outpacing supply in some neighborhoods like Costa del Este and El Cangrejo.

What’s Driving Panama Real Estate Rentals?

• Expats waiting before they buy or trying out Panama to see if its a good fit
• Local families forced to rent after losing creditworthiness during COVID-19.
• Remote workers and those in retirement who want flexibility over ownership.

Yields on long-term Panama real estate rentals are also improving, especially in mid-market neighborhoods like El Cangrejo, where value and demand align. Premium areas like Punta Pacifica and Santa Maria, on the other hand, are seeing slower rental absorption and declining yields.

Exploring the Demand for Condos for Rent in Panama

Neighborhood	Average Price/m2 (Rent, Unfurnished)	Average Days On Market	12 Month Pricing Trend (% Change)
Avenida Balboa	$10-12	36	-(3)
Casco Viejo	$11-13	42	4
Costa del Este	$12-14	16	0
El Cangrejo	$9-11	27	6
Punta Pacifica	$11-13	47	-2
San Francisco	$9-11	36	2
Santa Maria	$18-22	87	-6

Airbnb: Too Early to Bet Big

Short-term rentals continue to attract interest, but regulation remains murky. As of now:

• There’s no legal framework to protect or promote STRs in Panama City
• The hotel lobby is pressuring the government to crack down on the Airbnb market

While many investors are still buying with Airbnb in mind, I believe the smarter play right now is mid- to long-term rental strategies in proven locations.

Frankly, until Panama passes legislation that formalizes Airbnb legality, any short-term rental play comes with elevated risk, unless the property already has a license.

But with hotel occupancy running at 60%, I still question the Airbnb ownership model and returns being promised.

Resale Properties in Panama: An Overlooked Advantage

The resale market continues to offer opportunities that many overlook — often trading at prices below what it would cost to rebuild the same unit today.

Why the disconnect? Panama’s condo market has been oversupplied for more than a decade. And while new construction gets the marketing dollars, it’s the older stock that offers more space, lower holding costs, and a lower cost per square meter.

The tradeoff, of course, are the amenities, the upgrades and in some cases, the choice locations that pre-construction options provide.

Investors looking for value — and realistic cash flow — are taking advantage of this disparity and sometimes getting pricing on comparable older condos at a 40% discount.

Here’s a breakdown showing the disparity between pre-construction and existing property for sale in the City.

Neighborhood	Average Price/m2 RESALE	Average Price/m2 PRECONSTRUCTION	Total Existing Condos For Sale	12 Month Pricing Trend (% Change)
Avenida Balboa	$2200	$3300	1,374	-(3)
Casco Viejo	$3200	$4300	283	4
Costa del Este	$2400	$4000	2,483	0
El Cangrejo	$1700	$2800	743	7
Punta Pacifica	$2200	$4300	1,687	-4
San Francisco	$1900	$3500	6,445	2
Santa Maria	$2900	$3800	1,427	-6

Make sure you know what to look for when buying real estate in Panama.

Final Thoughts: Proceed, But Be Strategic

Panama is still a compelling market — for the right buyer, with the right expectations. But this is not a moment for speculative buying. The market is sending mixed signals and success depends on clear goals and careful due diligence.

Here’s How I Am Advising Clients Right Now:

• Focus on yield and value, not just glossy brochures.
• Don’t assume prices will rise, especially in oversupplied areas.
• Prioritize liquidity: How easy will it be to resell?

At Panama Equity, we’ve been advising international buyers since 2007. We’re here to give you the real story — not just the sales pitch.

Reach out and tell us what you’re considering. We’ll help you make the right call, whether that means buying, waiting, or walking away.

Real Estate Opportunities in Panama City

You can also browse our list of villas for sale in Panama (or see if we have any listings of beachfront condos for sale in Panama or luxury apartments in Panama City, Panama). If you’re looking for a rental first, you can check out our list of Panama’s condos for rent.