Here is a reprint of an article that first appeared in the New York Times on April 6, 2010
Housing prices in Panama City
Panama has spent much of the past decade in a real estate boom, with prices rising quickly and a steady stream of new construction. The economic crisis may have slowed the frenzy of the market, but prices have not fallen sharply.
“There is a lot of construction going on,” said Jaime Figueroa Navarro, chief executive of Panama All In One, a real estate investment company. “There are a lot of buildings being built. Every day there are more and more cranes.”
Panama’s economy continues to grow, if more slowly than in years past. The reasons for the growth, said Jianella Torres, a broker at New World Real Estate in Panama City, include the development of an area called Panama Pacifico, a 5,000-acre tract just outside of town that was once a United States air base, as well as Panama’s status as the second-largest free-trade zone in the world. Shoppers from all over the Americas and the Caribbean come in search of tax-free deals.
All of which has kept prices from crashing hard, Ms. Torres said. High-end properties have generally retained their value, while less expensive properties have fallen 10 to 20 percent, she said.
Today, housing prices for new construction in Panama City range from about $1,500 a square meter ($139 a square foot) in the San Francisco area, a middle-class coastal neighborhood, to $2,500 to $4,000 a square meter ($232 to $372 a square foot) in waterfront areas like Punta Pacifica and Balboa Avenue, said Yovana Medina, general manager at Knightsbridge Investment Group, a Panama City real estate company. Older properties sell for about 15 percent less than newer ones, she said.
Unlike the high-rises of Panama City, the majority of homes around Las Cumbres Lake are single-family houses on large lots. They typically range from $700,000 to $1 million. Homes on the road connecting Panama City to Las Cumbres are far cheaper, she added.
Ms. Medina says foreign buyers have been increasingly drawn to Panama City, among them Americans, Venezuelans, Canadians, Colombians and European Union residents.
Most foreigners in Panama City are seeking properties in the $150,000-to-$250,000 range, according to Ms. Torres. “They’re buying a condo in the city, something very well located, that can be rented out,” she said, “so they can get some money until they retire” in the area.
There are no restrictions on foreign ownership. The seller pays all agent fees and taxes; the only financial burdens on the buyer are lawyer fees, which typically range from $1,500 to $2,000, Ms. Medina said.
Foreigners can obtain about 70 percent financing; interest rates run 6.25 to 6.75 percent.