Panama Real Estate Predictions 2009

The global recession has certainly affected everyone, Panama is no exception, however the full impact of the recession has not been felt strongly in Panama thus far. During the Christmas shopping season, the malls in Panama City are filled with thousands and thousands of people shopping; the economy felt vibrant, the good times keep rolling. Layered below what appears to be a booming economy still in the full swing of good times, a breeze of the gathering storm can be felt as businesses begin to prepare for what could be one of the hottest years ever. difficult in the last decade. The highs and booms in the last 6 years have been steep and steady, so now the pendulum will swing down with this upward momentum:

Panama’s real estate market is bracing for the shock of the first wave of hundreds of new condominium units in the city coming onto the market. Occupancy permits will be issued and buyers, mostly speculators who bought two years ago with as little as a 10% down payment, are now responsible for covering the full impact of the remainder of their debt on these units. The economic outlook for most of these buyers has changed; they face a different economic reality than they expected 2 years ago. Now, they don’t have many options and the clock is ticking, their options are to resell those units quickly at cost with little or no capital gain, or lose the units back to the developer for failure to honor the promise to purchase agreement. .

thesis”Distressed Sellers“- and this scenario is likely to be abundant in 2009. This scenario will affect the economies of supply and demand, primarily the condominium market in the city will change from what has been until now a seller’s market with prices constantly increasing in a period of months for up to 100% without rhythm or reason at a BUYERS MARKET. This will create a price adjustment that will bring another wave of buyers looking for deals in Panama City. This price adjustment will also allow younger local buyers to afford City condos that have previously been out of reach and exclusively for foreign investors. This potential surplus in condominium units may create a shift towards lower pricing strategies and many developers may have to reconsider their pricing strategies to compete, which may result in the cancellation of several residential developments in the city.

This negative turn offset by several phenomena.

• New buyers enter the market driven by political instability in countries like Venezuela and Ecuador, seeking refuge and a plan B in Panama.
• Companies that come to Panama to establish their global operations.
• A new wave of newly discovered investors arriving in Panama looking to invest in this warm tropical paradise.

Panama stands out as one of the most globalized countries in Latin America and a leader in attracting foreign investment and several key projects guaranteed to move forward in 2009. The expansion of the Panama Canal, the residential and commercial development zone of the Howard- London and the The expansion of the Cinta Costera highway, along with sustained growth in tourism, business travel, telecommunications and other key sectors and commercial activities will serve to absorb some of the economic impact, allowing Panama will deliver solid economic growth of 3% to 4% in 2009.

I am confident that in 2009 Panama, blessed with its privileged location, two oceans (Pacific and Atlantic), beautiful nature and landscapes, and the ideal globalized city for international business, will offset the slowdown in some sectors, construction, real estate, transportation, and offset with small sustained growth in others to generate balanced growth in 2009. Panama remains a very HOT place to invest in 2009. Now more than ever, with prices coming down, market conditions are favorable for finding Great DEALS and GREAT BUYS on beachfront real estate. Check PANAMA property listings at ThinkPanama.com, search for properties by lifestyle: city condo, beaches, land, or contact me at [email protected]