To call Panama real estate a safe investment for international investors would be a gross understatement. Traditionally, Panama real estate has not only been safe, but it has more often been robust. As with any sector, there will be down periods, but the Panama real estate market has trended upward for years. After a contentious presidential election earlier this year, analysts are cautiously optimistic that the trend will continue.
This post will explore some factors driving the Panama real estate boom.
What’s Driving the Boom in Panama Real Estate?
Panama is a unique country in many ways. It’s a tropical country that falls outside the hurricane zone. Panama also has more than a generation of political stability in a region known for volatility. It has a robust economy where many neighbors consistently struggle with poverty and inequality. That robust economy is getting attention from people from all over the world. You’ll find everything from digital nomads to expat retirees flocking to Panama. They all see how luxury lifestyles are more attainable and available in Panama.
Location, Location, Location in Panama Real Estate
Everyone knows those are the three most important words in real estate. Panama’s location makes it uniquely suited for the needs of multiple demographics. At the southern end of Central America, Panama serves as a hub for the Western Hemisphere, connecting North and South America markets. Several multinational corporations use Panama City as their regional headquarters, meaning high-paying jobs filled by employees looking for high-end housing. Panama City’s Tocumen International Airport also offers flights to cities worldwide, including Asia, Europe, and the United States. It all comes together to make Panama one of the most accessible locations in Central America.
Economic and Political Stability
This year’s presidential election in Panama brought increasing optimism to those in the Panama real estate sector. After his conviction for embezzlement and money laundering charges, incumbent President Ricardo Martinelli fled the country. Marinelli’s running mate, Jose Raul Mulino, then won the presidency. Mulino is likely to bring continuity to the government and continue with the economic policies implemented by Martinelli. Many experts agree these policies helped elevate the Panamanian economy to previously unseen heights.
Under President Mulino, international investment should continue to be robust. All that international investment, along with easy immigration policies, creates a scenario in which international workers continuously enter the country. Those workers need housing, so the Panama real estate market should continue to do well under those circumstances.
Advantageous Immigration Policies
The ease with which foreigners can obtain work and residency visas is another factor impacting Panama’s real estate boom. Panama offers a variety of visas to make it easy to take up residency in the country. Here are some of the most popular:
- Panama Digital Nomad Visa
- It is a short-stay visa for remote workers and freelancers.
- Friendly Nations Visa
- This visa is available to citizens from specific countries with professional and economic connections with Panama.
- Qualified Investor Visa
- A visa that allows eligible people to maintain residency by leaving the country once every two years.
- Business Investor Visa
- This visa allows people to attain residency by opening a corporation in the country.
These are just a few options for getting residency visas in Panama. It is clearly a nation looking to attract successful people from around the globe. Many of these people will look to purchase high-end real estate for their stays in the country.
Modern Infrastructure
True or not, many people associate Central America with a lack of modern amenities. When it comes to Panama, that perception couldn’t be further from the truth. The entire country, especially Panama City, has advanced infrastructure like high-speed internet. Panama City has a robust public transportation system, and its international airport is the most modern in Central America. The city has a wall of skyscrapers forming a modern skyline that can rival almost any other city in the world. Panama City also boasts great healthcare facilities and many schools for international students. It also offers urban amenities conducive to a high standard of living. A person living in Panama City would find it similar to living in Miami or Los Angeles.
Advantageous Tax Policies
Foreigners can take advantage of Panama’s friendly tax codes. One of the more popular tax provisions is that Panama does not tax foreign-earned money for expats living in Panama. That makes Panama a popular tax haven for many digital nomads and freelance workers. Universal Tax Professionals recently rated Panama the fifth-best tax haven for US citizens.
Panama has a territorial tax system and offers tax incentives to foreign investors. These incentives attract investors who will also need places to live and potentially commercial real estate to run their operations. That’s more real estate that people and companies will need in Panama.
Demand for Luxury Panama Real Estate
It combines to make Panama one of the emerging markets for real estate investing. However, it has become a hot spot for luxury real estate in particular. There has been an increase in high-end, high-rise development in Panama City. You’ll also find new luxury resorts popping up all over the country. The current trends point to that continuing.
As an emerging market, Panama real estate is also evolving. Neighborhoods in Panama City, like Costa del Este, Santa Maria, and Punta Pacifica, highlight the growth of luxury residential areas. These neighborhoods are close to Panama City’s financial and commercial hubs. They attract the type of international worker who wants to live in Panama in style.
Sustainable Construction and Commercial Panama Real Estate
Panama is also an emerging market for sustainable construction and green spaces, both of which have become priorities. As investors get younger, more and more of them are environmentally conscious. They want to invest in energy-efficient properties with sustainable materials and eco-friendly designs. Panama is at the forefront of using green technology to incorporate sustainability in properties. That makes it popular with younger investors.
Panama’s emerging real estate market is growing in two sectors: commercial real estate and rentals. Demand in both sectors is robust to the point of booming. International investment in shopping malls, office spaces, and industrial buildings is growing. Along with this growth, we’ll see demand for short-term and long-term rentals for the people working in these facilities.
The Panama Canal
The nation’s real estate market depends on the overall economy remaining strong and stable. It would be remiss not to mention the Panama Canal, the number one stabilizing force in the Panamanian economy. As long as shipping needs to traverse the Canal, the country will continue to have steady influxes of currency into its economy. Over the past twenty-five years, the government has parlayed that into economic growth that is the envy of Central America. Economic growth leads to more economic opportunity. People around the world have recognized that economic opportunity. It is making Panama a desirable destination for entrepreneurs, freelancers, digital nomads, retirees, and corporate executives.
Panama is a great place to do business, and one of the best businesses in Panama is real estate. The influx of people means a need for housing, which means the real estate market continues to grow. International conditions are unpredictable and could cause things to change. However, Panama continues to be a regional economic power. There are no indications that Panama won’t continue in this role far into the future. Panama’s diverse economy has natural buffers against prolonged downturns.
Every indication is that Panama’s economy will continue to thrive well into the future. Much of this is due to its political and economic stability, advantageous tax and visa programs, and strategic location. That thriving economy will undoubtedly extend into the real estate sector, allowing Panama real estate to continue to boom.
There are many real estate opportunities in Panama for a wide variety of buyers. Click here if you’re looking for luxury real estate in Panama. We have our finger on the market’s pulse and would love to assist you in finding your Panama dream home.
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