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Panama's rental market has reached all-time highs in 2025, with prime neighborhoods in Panama City seeing significant rent increases driven by strong demand from expats and digital nomads.
The average rent across Panama City's main neighborhoods ranges from $950 to $2,500+ per month for standard apartments, while luxury properties can command $4,000 or more monthly.
If you want to go deeper, you can check our pack of documents related to the real estate market in Panama, based on reliable facts and data, not opinions or rumors.
Panama City rental market shows strong performance with average rents ranging from $950-$2,500+ monthly for standard properties and gross rental yields between 5-8% depending on location and property type.
Short-term rentals can achieve higher returns but come with increased risks and regulatory uncertainty, while long-term rentals offer more stable income streams for property investors.
| Neighborhood | Average Rent per m² | Typical 1-Bedroom Rent |
|---|---|---|
| Costa del Este | $12-14 | $1,400-$1,800 |
| Casco Viejo | $11-13 | $1,200-$1,700 |
| Punta Pacifica | $11-13 | $1,300-$1,700 |
| El Cangrejo | $9-11 | $950-$1,300 |
| San Francisco | $9-11 | $950-$1,300 |
| Santa Maria | $18-22 | $2,500+ |
| Avenida Balboa | $10-12 | $1,200-$1,500+ |
What's the average rent right now in Panama across the main neighborhoods?
As of September 2025, Panama City's rental market shows distinct pricing patterns across different neighborhoods, with prime areas commanding significantly higher rents than secondary locations.
Costa del Este leads the market with average rents of $12-14 per square meter monthly, translating to $1,400-$1,800 for typical one-bedroom apartments. This upscale area attracts business professionals and expats seeking modern amenities and proximity to the financial district.
Casco Viejo and Punta Pacifica follow closely with $11-13 per square meter, where one-bedroom units rent for $1,200-$1,700 monthly. These historic and waterfront neighborhoods appeal to tourists, digital nomads, and residents wanting a blend of culture and luxury living.
Mid-market neighborhoods like El Cangrejo and San Francisco offer more affordable options at $9-11 per square meter, with one-bedroom apartments renting for $950-$1,300 monthly. These areas provide good value while maintaining access to city amenities.
Santa Maria represents the luxury segment with rents reaching $18-22 per square meter, where premium properties start at $2,500+ monthly for one-bedroom units.
How does rent differ depending on the type of property, like apartments, condos, or single-family houses?
Apartments and condominiums dominate Panama City's rental market, with pricing structured primarily by square meter and location rather than property classification.
One-bedroom apartments in central Panama City typically rent for $900-$1,500 monthly, while two-bedroom units command $1,400-$2,500 depending on the neighborhood and building amenities. Penthouse and luxury apartments exceed $3,000 monthly, particularly in premium developments with ocean views or exclusive facilities.
Single-family houses within Panama City are less common but significantly more expensive, with three-bedroom homes renting for $2,000-$5,000+ monthly. These properties often include private parking, gardens, and additional living space that appeals to families and long-term residents.
In suburban areas and gated communities outside the city center, single-family houses become more accessible, with three-bedroom homes renting for $900-$2,000 monthly depending on location and amenities.
Villas and luxury homes represent the premium segment, starting at $4,000+ monthly, particularly in exclusive areas like Santa Maria and beachfront communities where privacy and high-end finishes justify the premium pricing.
What are the typical price ranges for different property sizes in terms of surface area?
Panama's rental market pricing follows clear patterns based on square footage, with significant variations between urban and suburban locations.
| Property Size | Central Panama City | Suburban/Beach Areas |
|---|---|---|
| Studios/Small 1BR (30-50m²) | $750-$1,200/month | $400-$700/month |
| Standard 1BR (50-70m²) | $900-$1,500/month | $600-$900/month |
| Standard 2BR (70-120m²) | $1,400-$2,500/month | $800-$1,500/month |
| Large Apartments (120-150m²) | $2,000-$3,500/month | $1,200-$2,000/month |
| Houses/Large Units (150-300m²) | $2,500-$5,000/month | $1,200-$2,500/month |
| Luxury/Premium (300m²+) | $4,000-$8,000+/month | $2,000-$4,000/month |
What is the total monthly cost for an owner after including fees, taxes, and maintenance charges?
Property owners in Panama face several monthly costs beyond mortgage payments that significantly impact rental property profitability.
Homeowners Association (HOA) fees typically range from $2.00-$3.50 per square meter monthly for apartments, translating to $120-$350+ monthly depending on building amenities and location. Premium buildings with pools, gyms, and 24-hour security command higher fees.
Property taxes in Panama are relatively favorable, with new properties valued under $120,000 eligible for 20-year tax exemptions. For non-exempt properties, annual rates are 0.5% of assessed value, meaning a $200,000 property incurs approximately $83 monthly in property taxes.
Maintenance costs average $1-2 per square meter monthly for upkeep, repairs, and building staff. This includes regular maintenance, emergency repairs, and property management if using professional services.
For a typical $200,000 condominium (100m²), total monthly ownership costs average $367: $250 HOA fees + $42 property taxes + $75 maintenance, not including mortgage payments or vacancy periods.
How do mortgage payments compare to rental income for a typical property?
The relationship between mortgage payments and rental income in Panama creates challenging scenarios for leveraged property investors in the current market environment.
A typical $250,000 mortgage at 7% interest over 20 years requires approximately $1,938 monthly payments, while comparable condominiums rent for $1,500-$2,200 monthly in Panama City's desirable neighborhoods.
When factoring in HOA fees ($200-300), property taxes ($100+), maintenance ($75-150), and vacancy periods, leveraged properties often generate negative cash flow or minimal positive returns. Successful investors typically require 30-40% down payments to achieve positive cash flow.
Properties purchased below market value or in emerging neighborhoods with strong rental demand can achieve better cash flow ratios, but most standard market purchases require significant equity to generate meaningful rental income.
It's something we develop in our Panama property pack.
What are the main differences in profitability between short-term rentals like Airbnb and long-term rentals?
Short-term and long-term rental strategies in Panama offer distinct risk-return profiles that appeal to different investor preferences and market conditions.
Short-term rentals (Airbnb) in Panama City generate average monthly revenues of $2,040, with typical daily rates of $137.90 and occupancy rates around 54% (approximately 16 nights monthly). This translates to potential gross yields of 8-11% annually for well-positioned properties.
Long-term rentals provide more predictable income streams, with typical Panama City apartments generating $1,500-$1,800 monthly. While gross yields are lower at 5-7%, long-term rentals offer stability, reduced management requirements, and lower operational costs.
Short-term rentals require higher ongoing investment in furnishing, cleaning, marketing, and guest management. Additionally, regulatory frameworks remain unclear in Panama, creating potential compliance risks for Airbnb operators.
Long-term rentals benefit from lower vacancy risk, reduced turnover costs, and simpler legal compliance, making them more suitable for passive investors or those seeking steady cash flow without active property management.
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Can you give example rents for different types of properties, say a one-bedroom condo in Panama City vs a three-bedroom house outside the city?
Specific rental examples illustrate the significant price differences between urban and suburban properties in Panama's diverse real estate market.
A one-bedroom condominium in Panama City's center, such as Costa del Este or Punta Pacifica, typically rents for $1,400-$1,800 monthly. These units often include modern amenities, building security, and proximity to business districts and entertainment.
The same one-bedroom unit in suburban areas or beach towns like Coronado rents for $600-$900 monthly, offering more space and often better value for residents prioritizing lifestyle over urban convenience.
Three-bedroom houses outside Panama City vary significantly by location and quality. In established suburban communities, these properties rent for $800-$1,200 monthly, while gated developments or beachfront locations command $1,500-$2,500 monthly.
Luxury three-bedroom houses in premium areas like Santa Maria or exclusive beach communities can exceed $3,000-$5,000 monthly, particularly for properties with private pools, ocean access, or designer finishes.
What profiles of renters are most common in Panama right now—locals, expats, students, digital nomads?
Panama's rental market serves a diverse tenant base that reflects the country's growing international appeal and economic development.
In Panama City, the tenant mix includes middle and upper-class Panamanians, regional business professionals from other Latin American countries, and a growing population of North American and European expats attracted by favorable residency programs.
Digital nomads represent an increasingly important segment, particularly in neighborhoods like Casco Viejo and Costa del Este, where modern infrastructure and co-working spaces support remote work lifestyles. These tenants typically seek furnished apartments with reliable internet and short to medium-term lease flexibility.
University areas attract students and young professionals, creating demand for smaller, more affordable units with shared amenities and transportation access to educational institutions and entry-level employment centers.
Beach and rural areas primarily serve retirees, particularly Canadian and US citizens taking advantage of Panama's pensionado program, alongside seasonal residents and telecommuters seeking lower living costs and relaxed lifestyles.
Corporate tenants, including executives and project managers for international companies operating in Panama, form a premium segment willing to pay higher rents for fully furnished, move-in-ready properties with flexible lease terms.
What are the average vacancy rates by property type and by area?
Vacancy rates across Panama's rental market vary significantly by location, property type, and target tenant segment as of September 2025.
Prime Panama City neighborhoods like Costa del Este and Punta Pacifica maintain vacancy rates below 5% for quality condominium units, reflecting strong demand from business professionals and affluent residents. These areas benefit from limited new supply and consistent tenant demand.
Mid-market apartment buildings in established neighborhoods experience vacancy rates of 7-12%, with variations based on building age, amenities, and pricing relative to market standards. Properties requiring updates or lacking modern amenities face longer vacancy periods.
Suburban and beachfront properties show higher vacancy rates of 10-15% or more, often influenced by seasonal demand patterns and the smaller pool of potential tenants in these locations.
Short-term rental properties face the highest vacancy risk, with Airbnb occupancy rates in Panama City averaging 28-54% depending on property quality, location, and marketing effectiveness. Seasonal variations significantly impact these properties, with higher occupancy during peak tourist periods.
Properties targeting specific demographics, such as student housing or corporate accommodations, may experience seasonal vacancy spikes during academic breaks or business cycle changes.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Panama versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are the current rental yields, and how do they break down between different areas and property categories?
Gross rental yields in Panama's property market range from 4% to 11% depending on location, property type, and rental strategy as of September 2025.
Panama City central condominiums generate gross yields of 5-6.5%, with properties in Costa del Este, Punta Pacifica, and Casco Viejo representing the lower end due to higher purchase prices. These areas offer stability and strong tenant demand but limited yield upside.
Suburban and secondary city apartments achieve higher yields of 6.5-8%, benefiting from lower acquisition costs while maintaining decent rental demand from local residents and budget-conscious expats.
Beach area properties show variable yields of 4-7% gross, heavily influenced by seasonal demand patterns and property management effectiveness. Properties with year-round appeal perform better than purely vacation-focused rentals.
Short-term rentals can achieve gross yields of 8-11% for well-managed properties in prime locations, but these returns come with higher operational costs, management requirements, and regulatory uncertainty that may impact long-term sustainability.
It's something we develop in our Panama property pack.
How have rents and yields changed compared with five years ago, one year ago, and what's the forecast for the next one, five, and ten years?
Panama's rental market has experienced significant growth over recent years, with acceleration in prime neighborhoods driven by increased international interest and limited supply.
Over the past five years, central Panama City rents have increased 12-18% cumulatively, with the strongest growth in neighborhoods popular with expats and digital nomads. Rental yields have compressed slightly as property prices have risen faster than rents in some premium areas.
The most recent 12 months show continued momentum, with prime neighborhood rents rising approximately 12% year-over-year. This growth reflects strong demand from international residents and limited new supply in desirable locations.
Short-term projections for the next 12 months suggest continued rent growth of 5-8% in prime areas, supported by Panama's growing digital nomad community and favorable residency programs attracting long-term international residents.
Medium-term forecasts (5 years) anticipate annual rent growth of 3-6% in Panama City, with emerging neighborhoods and optimized short-term rental properties potentially achieving higher returns. Regulatory clarity around short-term rentals will significantly impact this segment's performance.
Long-term projections (10 years) suggest rental yields will stabilize in the 5-7% range for quality properties, with the highest returns available in emerging areas benefiting from infrastructure development and growing expat communities.
How do average rents and yields in Panama compare with other big, similar cities in Latin America or globally?
Panama City's rental market positions competitively within Latin America's investment landscape, offering attractive risk-adjusted returns compared to regional alternatives.
Rental rates in Panama City exceed those in Bogotá, Lima, and Guatemala City, while remaining below premium markets like Mexico City's Polanco district or São Paulo's luxury neighborhoods. Panama's rents align closely with Buenos Aires' prime areas but with significantly more stable currency and economic conditions.
Gross rental yields in Panama (5-8%) outperform most Costa Rican markets, particularly the Central Valley where yields typically range 3-5%. Panama also offers advantages through lower property taxes and transaction costs compared to many regional markets.
Compared to North American markets, Panama offers significantly higher yields than most major US cities, where prime rental properties typically yield 3-5% gross. However, US markets provide greater liquidity and legal certainty.
Within the global context, Panama sits in the "mid-high" tier for rental yields among investor-friendly destinations, benefiting from favorable tax structures, growing international appeal, and relatively low holding costs compared to developed markets.
It's something we develop in our Panama property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Panama's rental market offers compelling opportunities for investors seeking higher yields than traditional developed markets, with gross returns ranging 5-11% depending on strategy and location.
Success in Panama's rental market requires careful neighborhood selection, understanding of tenant demographics, and realistic expectations about operational costs and vacancy management.
Sources
- Panama Equity Q1 Market Report
- Retire in Panama Tours - 2025 Expat Guide
- Stop Having a Boring Life - Cost of Living Panama
- Panama Equity Rental Properties
- Rentberry Panama City Apartments
- AirROI Panama City Report
- Global Property Guide Rent Prices
- Numbeo Panama Cost of Living