Thread: Where is the Panama real estate market going to go?

Hi every one.

Yes, it is higher in Panama, but it will go up ... Austraila and others are now raising rates, this watch is a fundamental issue for me, because of low prices is the only thing that keeps the building from falling into a ravine.

Wow!

There is sure allot to digest on this thread. Some really intelligent people saying some really intelligent things. It was interesting to start at the beginning of this thread, back in 2009 and read the different opinions and follow them through to the present. Most of you were spot on, or at least close enough in seeing the near term future in the Panama real estate market. As far as whether to rent or buy; the quandary seems to be limited to Panama City. As more tourist come to the outlying regions, the interior will grow to accommodate the larger numbers. This growth will most likely be in the form of resorts and/or condo's. I would think buying a few hectors near a drawing card (beach, waterfall mountain, what ever) and waiting seems a good strategy. As someone said, you could always grow crops or raise cattle. To get to deeply involved in the unknowns within Panama City's real estate market puts you competing with the Cartel and super families which can adjust pricing at their whim. That is a hard competition to win and the leftovers put you in competition with the limited labor forces that are not working for the Canal companies (I'm talking reliability and quality here). In the interior, they may not be as stretched in the labor department and you might be able to get some improvements done sooner rather than later. So, I guess what I'm saying is long-term buy land in the interior and let the infrastructure come to you. If you want to be in the city; rent. Besides, you get one of those jilted chica's coming after you and you might need to move in a hurry.

I found this interesting article on Salon.com. It might let you know where the states are heading in the next 20 years.

How America will collapse (by 2025) - U.S. Economy - Salon.com

Let me know what you think.

One thing for sure, no country/empire has ever been able to print it's way out of trouble. Every empire that has tried, including the Roman empire, has eventually collapsed.

Matt,

I enjoyed your very insightful response as to where the market in Panama is going.I am a developer in California , where the laws of supply and demand seem to apply more so than in Panama. The Panama market seems to adhere more to the "black swan " approach...some unforseen factor that causes a short jolt , but after which the market seems to go merrily on its way. I think your right when you say the only real deals are at the extreme ends of the bell curve.

I own a single family home in Panama which I've been fortunate to keep rented; at what I consider to be abnormally high rents.
If I was trying to sell, I expect I'd have a difficult time, but in the mean time the tenant keeps paying as agreed.

I expect most of us underestimate Panama as we tend to compare it to areas with which we are familiar.

It's a very unique place, and due to the american influence for an extended period , I don' believe most of us understand precisely how Panama will function in it's new role as a more more of a " sovereign " and independent entity.

If one can be patient, my bet is that Panama will end up being an excellent place to invest for the long term, and what the market has been experiencing for the last couple of years will in the long run prove to be healthy.

I agree that you cannot compare the real estate market of Panama to that of the US. I really do not expect the prices to fall a lot more.
I think No-Nonesense-Matt made an excellent analysis in the past (reposted yesterday by EdBowers).
My guess is prices will stay stable for the next few years, that we will not have any dramatic decline or surge.
Buying is not a bad idea considering the rental market is healthy and has come down a lot.

Thanks guys...

My analysis would be pretty much the same today.
And I would add 1 more factor (that has been extremely
strong for the past year or 2).

The rich Venezuelan factor.

They have been some of the strongest real estate buyers in Panama.
Chavez is on a megalomaniac powertrip and everyone that has assets
in Venezuela is extremely concerned. And many have left the country
because they want to protect what they have and they have been coming
to Panama and investing their money into apartments.
That's yet another "semi-invisible factor".

If Chavez stays in power -- this trend will continue.
If he doesn't stay then I think the trend will reverse
(many will go back home).

I think Panama is a decent place to invest if you have a medium or long term perspective.

For shorter term gains, I think the USA is a much stronger bet.

Stay wise,
Matt

I think people know that if things go too far in Panama, the US will step in again and fix the problem. So it's a safer place to invest than other similar countries.

If they had the ability to fix anything, they would fix the mess in the U.S. It is pretty obvious that the U.S. government is clueless on fixing anything.

Originally Posted by jonr

I think people know that if things go too far in Panama, the US will step in again and fix the problem. So it's a safer place to invest than other similar countries.

thats the prolbem with the US , they think they are the world police , and look where that has got them today , in two wars that they are never going to win , did they not learn anything from vietnam .As far as the panama market , i think we have not seen anything yet , with Ben talking about Q3 and the euro prolbems , some people are wondering which one will implode first , China and russia have dumped the USD for trade and gone back to the own money , if the oil countries stop taking the devalued USD it will no longer be a world currency , but it still will be good in the bano , china imported over 200 metric tons of gold this year , and they are the world largest producer of gold since 2002 , whats that tell you ? in history flat currency has never lasted more than about 200 years , we are there now , so in my mine buy dirt , here , there or anywhere that it is warm enough to grow food , your balcony on a 60 floor condo just wont cut it , and when the condo ass runs out of money to pay the power bill it will become a bitch of a walk up LOL

I believe you will have people from the U.S coming to Panama for the same reasons people are fleeing Venezuela. The problem is more capacity coming on the already over saturated market. Back when all this was planned the thought was baby boomers would fill these apts and condo's. The baby boomers are now broke (many don't know it yet) Their pension funds are insolvent, the municipalities backing the pensions are insolvent and their homes have no equity left. Europe is experiencing a similar situation. The people who still have money have other choices besides Panama. Those who do come may decide to live in Boquete or other places in the interior. Another problem rarely mentioned is Panama's use of the dollar. With Bernanke literally printing the dollar to death, Panama could experience some nasty consumer inflation and possibly loss of their dollar denominated savings. The small but growing Panama middle class could be wiped out by the idiots in washington. Renting is the most pragmatic approach for those wanting to enjoy Panama City. The question is will a U.S. collapse with social turmoil push enough people down to fill all this excess capacity?

I think you will see the interior of Panama will get real popular due to the affordability of living. In my opinion cheap rentals will be very popular.

The problems Fleeted is talking about are very real. People in the US who only a few short years ago thought they were doing OK are now broke. They live in houses that are worth half what they paid for them. It used to make sense that you would see a lot of Americans retiring and moving to Panama. Now everything is different. What Mr WOOHOO says could be true though. We might get a lot more simple living "hippie types" moving to the interiour where it is cheap. It's not a bad idea. But, I have been down here in Las Tablas for awhile and I am not seeing many new faces. It the dollar crashes it would be a disaster for the interiour, where low income families live on 3 or 4 hundred dollars a month. I hate to even think about it.

The difference between cost of food and overall general living is huge in comparison to the US. There is so much food produced locally that "inflation" is not as much of a factor. I doubt you will ever see a single pineapple sell for $5 in your lifetime. Thats what they are "on sale" for in the US.

I remember reading a study somewhere measuring Panama price increases with US increases. Overall, the relatively large amount of agriculture resources and cheap unskilled labor has kept price increases at a lower pace. But Panama is still at risk from being on the dollar, and American Pensioners in Panama could find that SS checks worthless. The US will continue to export its primary asset - inflated dollars. I hope Panama eventually moves to their own currency preferably asset backed.

That is a grave concern. But, if that happens, the same person in the US will be just as much screwed. It is a good argument for buying a home compared to renting. A person depending on SS to live is in trouble no matter where they live in my opinion. I think it is a good point though for looking into buying affordable housing in the interior. Should Panama move to an asset based currency even the interior will be out of reach for many Americans. Buying a little house here is as good an investment as a gold purchase for protecting your ability to live here.

Originally Posted by skynet21

I remember reading a study somewhere measuring Panama price increases with US increases. Overall, the relatively large amount of agriculture resources and cheap unskilled labor has kept price increases at a lower pace. But Panama is still at risk from being on the dollar, and American Pensioners in Panama could find that SS checks worthless. The US will continue to export its primary asset - inflated dollars. I hope Panama eventually moves to their own currency preferably asset backed.

that is also my biggest worry about panama , the USD i would be very willing to dump mine for their own dollar ,i i believe it is not (if ) the dollar folds , but when it folds

Very true. Panama may go to a new currency but probably after its devalued unfortunately. A Pensioner will have a very hard time anywhere. But if they had a small house and some land they could probably grow their own food and blend in with the locals. Most things will still be cheaper in Panama than in the US, so relatively speaking they may still be better off.

That being said, I like the city and the "fast" life.

Originally Posted by skynet21

Very true. Panama may go to a new currency but probably after its devalued unfortunately. A Pensioner will have a very hard time anywhere. But if they had a small house and some land they could probably grow their own food and blend in with the locals. Most things will still be cheaper in Panama than in the US, so relatively speaking they may still be better off.

That being said, I like the city and the "fast" life.

well when the chit hits the fan i will give you a garden plot , you bring the (fast ) girls , i mean life LOL

In my view the Chit has already hit the fan. It's just moving at a slow enough vibration that most people can't see it. So much damage has already been done by the US that it cannot be undone or changed. We can just watch in "horror" or "dismay" as the plot slowly unfolds. It is important to own a little home, stay debt-free, and learn to eat boiled plantains. Cheers.

The dollar crash itself should not have much an effect on poor people who trade with other poor people and have no savings. The big problem is for people sitting with USD based investments and cash.

Originally Posted by Pollerkeeper

It the dollar crashes it would be a disaster for the interiour, where low income families live on 3 or 4 hundred dollars a month. I hate to even think about it.

Originally Posted by EdBowers

The dollar crash itself should not have much an effect on poor people who trade with other poor people and have no savings. The big problem is for people sitting with USD based investments and cash.

Very very true.

I agree living in the interior of Panama makes the most sense. Protect your savings with gold or silver coins. The real inflation for Panama I believe will be with any imported items. Gasoline inflation is something that everyone rich or poor will bear the cost. Panama especially Las Tablas and other interior areas offer more freedom and safety than most areas of the U.S.
I have started my Pensionado process now because I think there could be allot of people who try to "get out" in the not to distant future. Panama is allot of things but efficient is not one of them. Can you imagine the clog up in the pipeline when all these people flood the immigration dept with applications. Just like there is now a moratorium on gun permits, Panama may impose a moratorium on immigration visa if there is a flood of applicants.

I agree - buying a place in the interior and planting a bunch of fruit trees isn't a bad way to go if you are no longer working - or can work online. But you will still have to deal with rising taxes and utilities.

Originally Posted by MRWOOHOO

The difference between cost of food and overall general living is huge in comparison to the US. There is so much food produced locally that "inflation" is not as much of a factor. I doubt you will ever see a single pineapple sell for $5 in your lifetime. Thats what they are "on sale" for in the US.

I agree 100% with Mr.Woohoo -- the locally produced food will make it easy for families to survive. As long as cheap transportation is available (It will be interesting to see how they price the Metro Bus) and mortgages are available on houses in the interior -- everyone will be fine.

Matt

Well, the cost of living in Panama is much higher for lots of things:

Quality cars (and parts), cereal, dog/cat food, yoghurt/kefir, cheese, imported beers, internet service, quality building materials, computers to name a few. Many of these items are 2 times as expensive in Panama.

What is really cheap in Panama is the "daily lunch (rice, beans, salad and meat)", fruits from street vendors, the local beer, the maid and haircuts. Electricity and gas is the same as the US.

All advanced services here are more expensive as well due to lost time, poor quality of service, mis-information, incorrect price lists, scheduling problems as so on.

So, if your objective is to simply stay alive on a piece of land, then yes, if you want western standard quality and service, then no.

I am now up to 1,800 dollars per year just to get my regular mail (check payments and so on) in a secure manner.

Originally Posted by MRWOOHOO

The difference between cost of food and overall general living is huge in comparison to the US. There is so much food produced locally that "inflation" is not as much of a factor. I doubt you will ever see a single pineapple sell for $5 in your lifetime. Thats what they are "on sale" for in the US.

I think the Metro Bus will be 65 cents with changes allowed? Of course this will be a complete disaster.

They will probably require pre-payment making all people fool around with their things on the way in, rather than out (after they left the bus). Will slow things down and make traffic worse. At least they can sit in the shiiite in AC.

Originally Posted by No-Non-Sense-Matt

I agree 100% with Mr.Woohoo -- the locally produced food will make it easy for families to survive. As long as cheap transportation is available (It will be interesting to see how they price the Metro Bus) and mortgages are available on houses in the interior -- everyone will be fine.

Matt

Panama offers a simple life-style. Ed is correct about the cost of living in Panama. Except that Mr Bowers considers simple living to just be "staying alive on a piece of land". There are others that have a different definition of "simple living". I for one consider this lifestyle a better choice and the lifestyle is more that just ''staying alive". Most people in the US cannot afford the type of life-style that they live and that is why they are in such debt. Is being in debt up to your ears a better way of life? I think not. Panama offers a lifestyle that gives you an excuse to live within your means. And, after awhile, you realize what is important. We all need to learn to live within our means. Stay out of debt. Etc. If it is your goal to live the same way you did in the US, then Mr Bowers is correct. Panama may not be a good choice for your retirement. It is different here that is for sure. You have to make some adjustments.

Originally Posted by Pollerkeeper

Panama offers a simple life-style. Ed is correct about the cost of living in Panama. Except that Mr Bowers considers simple living to just be "staying alive on a piece of land". There are others that have a different definition of "simple living". I for one consider this lifestyle a better choice and the lifestyle is more that just ''staying alive". Most people in the US cannot afford the type of life-style that they live and that is why they are in such debt. Is being in debt up to your ears a better way of life? I think not. Panama offers a lifestyle that gives you an excuse to live within your means. And, after awhile, you realize what is important. We all need to learn to live within our means. Stay out of debt. Etc. If it is your goal to live the same way you did in the US, then Mr Bowers is correct. Panama may not be a good choice for your retirement. It is different here that is for sure. You have to make some adjustments.

I agree a simple life is not always a reflection of money. As a person who enjoys financial independence my goal is to protect my wealth and find more freedom. As a sportsman I love the fact that you can go for a relaxing day of fishing and actually relax. There is no FWC officer showing up three times during the day inspecting your boat, making you dump out your cooler and measure every fish. Not being treated as a suspected criminal just for engaging in a favorite past time is something I look forward to. This is just one small example of how Panama offers more freedom than the IOUSA police state.

You have not opened your first bank account here I gather :-).

Originally Posted by fleeted

Not being treated as a suspected criminal just for engaging in a favorite past time is something I look forward to.