Thread: Is now the time to buy property or do i wait

Thanks for reading,

Firstly sorry for such rooke question but I am in the proccess of apply for my residency and we are thinking about buying a place in panama, we want to be within 30 mins drive of via espania,maybe closer, We are interested in a house but have concerns about upkeep,leaving it when we are away plus its a big first purchase, so a condo may be the answer.We will live in Panama for 4 months of the year.

So my questions are

1, Do i buy this year or do you think prices will go down
2, What areas do you think I should look at,and what to avoid
3, In general Is the proccess of buying easy or difficult

Any help is appreciated

Spend 4 months and then decide to purchase.

Have just returned from a 3 month visit, have been going to panama for about 10 years on and off, so we have decided to buy and not rent, did have a look at some areas on this visit but realter showed us a huge range for our 200K some nice places and some real dumps

well, like mr woohoo said, rent first , if you were just here for 3 months and have been coming for 10 years then you should know more than any of us what part of town you want to live in , now come back again and spend that time deciding what is best for you .

I can answer yr first question at least. I am not 100% sure about hoouses, but im convinced appartmentprices will keep dropping for the next year. I have been following the prices a bit for the past 6-8 months and they have come down significantly, yet i dont have the impression that sales have started to pick up much yet. I am still renting for now and will see how things are next year. Wouldnt surprise me at all if prices will be down another 15-20% by newyear!

Originally Posted by janl

I can answer yr first question at least. I am not 100% sure about hoouses, but im convinced appartmentprices will keep dropping for the next year. I have been following the prices a bit for the past 6-8 months and they have come down significantly, yet i dont have the impression that sales have started to pick up much yet. I am still renting for now and will see how things are next year. Wouldnt surprise me at all if prices will be down another 15-20% by newyear!

Thanks for reply, I think renting for bit will be the answer then it will give me time to look around properly, even though i have been visiting for a while i have never really looked at propertys or areas ,usually doing the same things.

Not sure exactly, but for me Via Espana streches from the entrance point of Calidonia to Via Brasil (one direction) and all the way over to Rio Abajo (two directions). The location "close to Via Espana" is about as unspecific as you can get. For quick access to the center of the road you could look around the Parque Omar area. Real estate in Panama is also jumping on an opportunity, not only waiting for a trend. There are some great deals out there now.

I think most everybody would agree there isn't that big of a rush. The more time you put into living in Panama the better of an idea you will have when making your decision.

As Ed said -- if you look around and you're PATIENT... There's some good deals out there. The thing is... it might take you 3 months or 6 months to find them and nail the details. Which means take Mr. Woohoo's advice. Don't be in a rush. Come live here for 6 months. More will be revealed once you're here.

I finally bought a condo on Balboa Avenue for less than $1700/met. and I do not believe that it will go down any more.
Even if it does,I do not care. I love my place and am enjoying it so much. Of course Balboa Avenue is not for everyone,some people could never stand the noise.
Anyways, do not believe everything you hear on the internet forums. People always said that the newly constructed buildings were mostly empty. Not true. My building is mostly sold. When I go to the garage late at night, it is mostly full. Plus lots of people movement in the building, lots of venezuelans. They are probably the saviours of the RE market in Panama.

Originally Posted by Romeo

I finally bought a condo on Balboa Avenue for less than $1700/met. and I do not believe that it will go down any more.
Even if it does,I do not care. I love my place and am enjoying it so much. Of course Balboa Avenue is not for everyone,some people could never stand the noise.
Anyways, do not believe everything you hear on the internet forums. People always said that the newly constructed buildings were mostly empty. Not true. My building is mostly sold. When I go to the garage late at night, it is mostly full. Plus lots of people movement in the building, lots of venezuelans. They are probably the saviours of the RE market in Panama.

Thanks Romeo, I have just spent 3 months in an aprtment on balboa, your not wrong about the noise it would not be so bad if the windows were better quality, real shame about the noise as it was a great aprtment and view glad to here you love yours good luck to you.
I am curious what are you paying for your monthly condo fees

Originally Posted by tompoker

Thanks Romeo, I have just spent 3 months in an aprtment on balboa, your not wrong about the noise it would not be so bad if the windows were better quality, real shame about the noise as it was a great aprtment and view glad to here you love yours good luck to you.
I am curious what are you paying for your monthly condo fees

I think once that horrible "diablo rojo" buses disappear, most of the noise will be gone. Even an airplane does not make the noise that they make.
And concerning the condo fees, I am paying $1.50/sq. met.(water and gas included in condo fees).

Which building are you in? Destiny? Destiny appears to have filled up well, but the rest are close to empty from what I can see from cinta costera in the evening.

Originally Posted by Romeo

Anyways, do not believe everything you hear on the internet forums. People always said that the newly constructed buildings were mostly empty. Not true. My building is mostly sold. When I go to the garage late at night, it is mostly full. Plus lots of people movement in the building, lots of venezuelans. They are probably the saviours of the RE market in Panama.

Originally Posted by EdBowers

Which building are you in? Destiny? Destiny appears to have filled up well, but the rest are close to empty from what I can see from cinta costera in the evening.

Ed, I am in the H2O and believe me it is filled up quite well. On my floor, 7 out of 7 are now occupied.

I agree with Romeo. For the most desirous neighborhoods in new buildings (Balboa Avenue, El Cangrejo, etc.), there's not much quality inventory. I have been searching carefully for the last 6 months (and have been following the market for 2 full years before that) and finally found a decent (but not great) deal in Cangrejo (in a brand new, finished building on a high floor) for about $1500 per square meter.

The best deals on new condos in Panama City are definitely in places like San Francisco, Obarrio, and Plaza Edison, however, I don't want to live in these areas. The Seawaves building in Bella Vista has deals but like Ed said before, the finishings are piss poor and you'd have to replace almost everything in the place unless you don't care about that sort of thing. I don't see prices going down much (if at all) for new buildings in Cangrejo or along avenida balboa, unless you target an older building (or you luck into a motivated seller).

The new buildings do seem to be doing pretty well. I hang out at my friends place at the Vitro Lofts when I hit the city and it is pretty full. The social area is awesome and when you can offer a dry sauna, steam sauna, racquetball courts, pool, well equipped gym, and a decent view I can spend the day there, no problem.

Why do people want to buy in PC and complain about the property? There are many better places to live in Panama.

Originally Posted by AlbyM

I agree with Romeo. For the most desirous neighborhoods in new buildings (Balboa Avenue, El Cangrejo, etc.), there's not much quality inventory. I have been searching carefully for the last 6 months (and have been following the market for 2 full years before that) and finally found a decent (but not great) deal in Cangrejo (in a brand new, finished building on a high floor) for about $1500 per square meter.

The best deals on new condos in Panama City are definitely in places like San Francisco, Obarrio, and Plaza Edison, however, I don't want to live in these areas. The Seawaves building in Bella Vista has deals but like Ed said before, the finishings are piss poor and you'd have to replace almost everything in the place unless you don't care about that sort of thing. I don't see prices going down much (if at all) for new buildings in Cangrejo or along avenida balboa, unless you target an older building (or you luck into a motivated seller).

Did you recall looking at this unit? This is from a spreadsheet of units I looked at. It showed well. What did you think?

Obarrio Galeria Uno $220,000 2 BR 3.5 BATH 1,453 sq. ft. This might be the best for the money; large unit; great views; modern and new; stainless appliances and a good overall look and feel; looks very clean and sharp

Hey - yes, I have noticed that more lights are coming on daily - place is probably half full by now. Destiny and H20 offer smaller units and are probably more affordable. Elements seems to be completely empty, but don't think it's 100 % done. Wait for Rivage, Allure, Yatch Club, the cluster of 5 around parque urraca. Sky residences still seems to be less the half occupied and has been ready for more than a year now.

Originally Posted by Romeo

Ed, I am in the H2O and believe me it is filled up quite well. On my floor, 7 out of 7 are now occupied.

Bala- yes, that was one of the units in Obarrio that my agent wanted me to look at. I wasn't interested in Obarrio, though. You currently get way more bang for your buck (with new units) in Obarrio and San Francisco than Cangrejo.

Originally Posted by AlbyM

Bala- yes, that was one of the units in Obarrio that my agent wanted me to look at. I wasn't interested in Obarrio, though. You currently get way more bang for your buck (with new units) in Obarrio and San Francisco than Cangrejo.

This may be difficult, but I'm wondering about a building going up on Ave. 1aA Norte in El Congrejo. Basically, if you look out from Hotel Veneto towards the front of the hotel you'll be looking down Ave 1aA, which dead ends into Via Veneto (aka Calle 49B Oeste). The building going up was near on the left looking down the street from the Hotel Veneto. I assumed it was residential. Did you look into it?

The completion of TOC will be the completion of the buildings in Punta Pacifica. I don't see anything new coming online after that.

It looks to me like most of the remaining inventory on Balboa is all around park omar/megopolis. There are about 5 buildings in construction there. Another dubious consideration is that buildings must be completed by year-end to receive the 20 year tax exoneration. Without it, I would knock off 15-20 percent from the bid. Will any of those buildings actually be completed by year end? My guess is no. 2012 will see them all come online without the tax exoneration and they will be at a large disadvantage to other buildings. Also the smell of that area has been a concern for me.

While it can be argued that there will be a lot of inventory in 2012, I don't see or anticipate any new building permits in the following years. Without the exoneration, and with soft prices it looks like the long term supply has been shut off.

Another consideration is that the global money supply is increasing rapidly. It's already made the construction costs double in recent years but I have to believe that it will soon start to levitate quality real estate. So if you're looking for quality/luxury units I'm wondering how much longer or further prices might fall. I don't anticipate price rises this year, however in another 4 years we could already be back in a state of 95 percent occupancy and supply shortages.

Originally Posted by skynet21

The completion of TOC will be the completion of the buildings in Punta Pacifica. I don't see anything new coming online after that.

It looks to me like most of the remaining inventory on Balboa is all around park omar/megopolis. There are about 5 buildings in construction there. Another dubious consideration is that buildings must be completed by year-end to receive the 20 year tax exoneration. Without it, I would knock off 15-20 percent from the bid. Will any of those buildings actually be completed by year end? My guess is no. 2012 will see them all come online without the tax exoneration and they will be at a large disadvantage to other buildings. Also the smell of that area has been a concern for me.

While it can be argued that there will be a lot of inventory in 2012, I don't see or anticipate any new building permits in the following years. Without the exoneration, and with soft prices it looks like the long term supply has been shut off.

Another consideration is that the global money supply is increasing rapidly. It's already made the construction costs double in recent years but I have to believe that it will soon start to levitate quality real estate. So if you're looking for quality/luxury units I'm wondering how much longer or further prices might fall. I don't anticipate price rises this year, however in another 4 years we could already be back in a state of 95 percent occupancy and supply shortages.

I wonder if any of these buildings can apply for and recieve their occupancy permits before years end and lock in the tax breaks? The tremendous increase in money supply has not been released into general circulation as it is being held by banks. Hence the velocity of money on the street has not increased. The Massive debt is weakening the dollar and leading to distrust and flight to commodities which is having an inflationary effect. There are two stories out today that discuss new laws requiring 20%+ down to purchase a home and another that the Fed may pull liquidity out of the system to stem the rise in Commodity prices. We all know the result of these proposals. I think what might drive buyers to Panama is to escape the high taxation that is coming in the U.S. a proposed VAT tax along with increases in state and local property taxes may be more than folks can tolerate. The more affluent people will be the target for the real estate you mention. There is a vocal anti wealthy push in govt and the media these days. To a degree never before seen in the U.S. the rich are demonized. They did not get rich by being stupid so expect them to move their assets and possibly their persons out of harms way. This may result in the scenario you described.

Originally Posted by fleeted

I wonder if any of these buildings can apply for and recieve their occupancy permits before years end and lock in the tax breaks? The tremendous increase in money supply has not been released into general circulation as it is being held by banks. Hence the velocity of money on the street has not increased. The Massive debt is weakening the dollar and leading to distrust and flight to commodities which is having an inflationary effect. There are two stories out today that discuss new laws requiring 20%+ down to purchase a home and another that the Fed may pull liquidity out of the system to stem the rise in Commodity prices. We all know the result of these proposals. I think what might drive buyers to Panama is to escape the high taxation that is coming in the U.S. a proposed VAT tax along with increases in state and local property taxes may be more than folks can tolerate. The more affluent people will be the target for the real estate you mention. There is a vocal anti wealthy push in govt and the media these days. To a degree never before seen in the U.S. the rich are demonized. They did not get rich by being stupid so expect them to move their assets and possibly their persons out of harms way. This may result in the scenario you described.

Indeed - and if Venezuelan refugees can buy up the supply just imagine what the US affluent could do. 5000 spare condos could be gone in a week. The HIRE act alone is enough incentive in my view to buy another condo offshore even if you can't rent it out. Panama is a very small market in comparison to other places. I guess that adds a degree of volatility in any outlook.

The venezuelans who are able to flee are the upper middle class with money. My friend Rafael had his construction company confiscated by Chavez. He got some money from his business accounts before they were frozen. He has a plane that is impounded at the Panama airport that he flew out of Venezuela to keep Chavez form getting it. He has smuggled his family and some of his workers families out of Venezuela as well. They now own cell phone stores in Panama. Chavez has been very good for the Panama economy. He lives in costa del este now. He prefers to rent and keep his capital liquid. I expect a fllod of refugees from the U.S. IN 2013 if Obama is reelected in 2012. I personally don't think it matters anymore who is elected as the debt still has to be paid and higher taxes and expensive regulation will be rampant.

I agree, if you live in one of the countries that have been living it up and spending future generation's money, either move or plan on starting to pay for the excesses.

I agree with deducting 20% due to the significant tax increase coming in 2012.

One problem with moving excess condo inventory in Panama city is average middle class people in the U.S. are losing wealth daily. Their home equity has evaporated and in many cases they are underwater. We have heard for 3 years that the real estate bottom is just around the corner and recovery is near. Today we see it is all lies. No savings and no home equity makes it difficult to buy in a Panama market that is considerably more expensive than most places in the U.S.
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I agree. Seems like there should be a market for 1/3 acres lots and modest homes out in some rural area. Preferably with a little elevation to cool things down. Or maybe Ecuador is a better choice.

Panama City is just another expensive place that really isn't all that nice (unless you need to hide money in Central America).

When sub-markets in Orlando, Miami, Las Vegas and Phoenix have fallen by 80/80/70/90 % it only natural that other major cities that have yet to experience a substantial correction see one. Surely what has happened in those cities will send shock-waves through Boston and Manhattan eventually as well. US returns in certain areas are way higher and way safer than Panama real estate.

I have been tracking foreclosure progress with the clerk of courts and in May the market will be ripe for some pickings again. Many areas have tripled (foreclosure numbers) since January. This is due to the foreclosure freeze. They will hit the market in April/May at renovation cost (apartment and land is free!!!). The foreclosure freeze have made a lot of people nervous. The best way to protect you from a lawsuit is to buy the highly discounted stuff - the previous owner is much less likely to want to re-instate the loan then.

Originally Posted by fleeted

One problem with moving excess condo inventory in Panama city is average middle class people in the U.S. are losing wealth daily. Their home equity has evaporated and in many cases they are underwater. We have heard for 3 years that the real estate bottom is just around the corner and recovery is near. Today we see it is all lies. No savings and no home equity makes it difficult to buy in a Panama market that is considerably more expensive than most places in the U.S.

Originally Posted by EdBowers

When sub-markets in Orlando, Miami, Las Vegas and Phoenix have fallen by 80/80/70/90 % it only natural that other major cities that have yet to experience a substantial correction see one. Surely what has happened in those cities will send shock-waves through Boston and Manhattan eventually as well. US returns in certain areas are way higher and way safer than Panama real estate.

I have been tracking foreclosure progress with the clerk of courts and in May the market will be ripe for some pickings again. Many areas have tripled (foreclosure numbers) since January. This is due to the foreclosure freeze. They will hit the market in April/May at renovation cost (apartment and land is free!!!). The foreclosure freeze have made a lot of people nervous. The best way to protect you from a lawsuit is to buy the highly discounted stuff - the previous owner is much less likely to want to re-instate the loan then.

Ed your information jives exactly with what a friend of mine who owns a century 21 office tells me. Tons of foreclosure inventory coming on the market in May, June and July. He says the banks will price it up a little and try and get multiple offers. The agents in his office are already worried about these foreclosure comps further depressing the tired market.
Seems to be a cycle occuring where property values fell and owners walked away. These homes came back on the market as foreclosures and depressed prices causing more people under water to walk away. and so on and so on..... If it is a cycle it is a vicious one.