Panama News

By DON WINNER for Panama-Guide.com - One of the most read articles ever published on Panama-Guide was "155 High-Rises of 15 Stories or More Being Constructed". Published on 4 January 2006, to date 13,747 people have read that article. At the start of 2006, people simply could not believe that there were going to be more than 150 new high-rise built in Panama City. Really - no one thought this article was for real. Then on 9 July 2007 I published "Boom, Burst, or Bingo - The Panamanian Real Estate Miracle", in which ACOBIR President Lic. Iván Carlucci told me that there were more than 400 projects being built in Panama at that time. And now, a year later, and the number has jumped from 150 to 400 and now 1,087. Prices continue to rise, demand remains solid, and foreign investors continue to buy property in Panama. The question remains - how long can this last? (more)
Only 40,000 Units: Last year when the 400 number came out I learned that there were more than 40,000 units in the pipeline. The general commentary then was "who is going to buy all of those apartments." Newsflash - they have been sold. What's going on now is that the builders are finishing off what they have started, will work on fit and finish, obtain their occupancy permits, deliver the inventory to the happy new owners, and then immediately plow their profits into the next project. Except now they are not building one or two towers, but four or six. Every developer I talk to has several or more buildings under construction simultaneously. They are not sitting back on their laurels - in a market this hot there's no one asleep at the wheel.
So Would That Be An Additional 100,000 Units? If there were 40,000 units being delivered when there were 400 buildings in the works, does that mean with now 1,087 new construction permits that an additional 100,000 units are heading to the market? It would seem so. And this is the part where the same guys who said "who's going to buy them all?" back in mid-2007 will again say "who's going to buy them all?" in the latter part of 2008. The answer - anyone from anywhere in the world. England is waking up to Panama. The Russians are coming. Most of the Venezuelans are here already. Pretty soon the US economy is going to turn the corner and the Americans will be coming back in force. Remember this - in the next ten years more than 175 million people will be reaching retirement age worldwide. If only 0.0005% of those people come to Panama, then all 100,000 apartments get sold to foreigners.
More Financing Options: People are starting to realize that sometimes its hard for people to obtain a mortgage with a Panamanian bank - so now there are more creative ways being created. Orange Tree Mortgage Partners provides loans from US banks, no life insurance requirement, title insurance from the US, for example.
Condo For Rent: Another mega-trend in the Panamanian real estate market will be an increase in availability of individual properties for rent, and property management companies to handle them. There are an incredible number of hotel rooms under construction right now - but none of them are close to coming on line. All of the hotel rooms are full, and rental prices are out of this world. Owners who are taking delivery of new properties are going to be putting more of them into the rental pool to generate some cash and to have their property pay for itself. And, there will be more property management companies coming along to meet that demand for service.
The Chicken Little's: Of course, all during this ongoing boom there will be scared people crying "the sky is about to fall" at every turn. I've been saying for more than two years that so far I have seen nothing indicating a downward trend. I thought for awhile that the tightening of the US economy might negatively reflect on the Panamanian economy, but (for the first time) the Panamanian economy was able to demonstrate that it has truly shed its 1 to 1 ties to the United States - as European investors bogged down with wheel barrows full of Euros picked up the slack. And the Spaniards. And the Colombians. And the Venezuelans. Now, it's the Russians and the Brits. Within a year or so the Americans will be coming back as well. So, as far as I can see, the "chicken little's" out there were wrong then, and today they are still wrong. If anything truly worrisome turns up, I'll let you know. But, you'll only get that if you keep reading Panama-Guide. This might be a good time to tell your friends...
Copyright 2008 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.

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