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Everything you need to know before buying real estate is included in our Panama Property Pack
Panama's real estate market in June 2025 presents compelling opportunities for strategic buyers.
With GDP growth projected at 4-4.5%, significant oversupply in new construction creating buyer leverage, and improved regulations for foreign investors, the market conditions favor those who approach with careful planning and realistic expectations.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.
| Factor | Status | Does it make it a good time to buy? |
|---|---|---|
| Market Inventory | Oversupply in new condos | ✓ Yes - Strong buyer negotiating power |
| Property Prices | 10-20% premium for pre-construction | ✓ Yes - Better value in resale market |
| Economic Growth | 4-4.5% GDP growth projected | ✓ Yes - Strong fundamentals |
| Foreign Buyer Rights | Equal to locals, improved regulations | ✓ Yes - Favorable investment climate |
| Mortgage Rates | 7-9% for foreigners | ✗ No - Higher than historical averages |
| Transaction Costs | 3-4% total costs | ✓ Yes - Competitive regionally |
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.
Is the Panama property market currently oversupplied?
Yes, Panama City's condo market faces significant oversupply with 16,519 pre-construction units available across 412 projects as of June 2025.
This represents a 7.2% decline from last year, but inventory levels remain historically high. New developments take 12-24 months to sell out, creating exceptional negotiating power for buyers who can secure furniture packages, closing cost assistance, and flexible payment terms from developers eager to move inventory.
However, the resale market tells a different story. Mid-range properties in established neighborhoods show vacancy rates under 2%, indicating strong demand for existing units. This creates a two-tier market where buyers face abundant choice in new construction but competition for quality resale properties. The key is understanding which segment offers better value for your specific investment goals.
For investors, this oversupply presents opportunities. Developers are more willing to negotiate on price and terms, particularly for cash buyers or those purchasing multiple units. The absorption rate continues to improve as Panama's economy grows and more international buyers enter the market.
It's something we develop in our Panama property pack.
What mortgage options exist for foreign property buyers?
Foreign buyers face mortgage rates of 7-9% for primary residences in June 2025, substantially higher than the 4.5-7% available to Panamanian residents.
Investment properties command even higher rates, reaching up to 9.5% effective rate including the mandatory 1% FECI tax. Banks typically require 30-50% down payment from foreigners without residency, though this drops to 20-30% for those with permanent residency status.
The closure of 23 offshore banks in 2025 has tightened mortgage access, requiring foreign buyers to work primarily with local Panamanian banks. These institutions demand extensive documentation including proof of income, bank statements, and sometimes require opening a local account. Loan terms for foreigners are typically limited to 15-20 years, compared to 25-30 years for locals.
Despite higher rates, financing remains accessible for qualified buyers. Banks focus more on income verification and repayment ability than credit history, which benefits international buyers without local credit records. Many foreign buyers opt for cash purchases to avoid financing complications, with over 80% of international transactions completed without mortgages.
| Buyer Type | Interest Rate | Down Payment | Maximum Term |
|---|---|---|---|
| Foreign (No Residency) | 7-9% | 30-50% | 15-20 years |
| Foreign (With Residency) | 6-8% | 20-30% | 20-25 years |
| Panamanian Citizen | 4.5-7% | 10-20% | 25-30 years |
How do pre-construction prices compare to existing properties?
Pre-construction units currently command a 10-20% premium over comparable resale properties in Panama City's prime areas.
A $300,000 pre-construction condo might cost only $250,000-$270,000 in the resale market, representing immediate savings of $30,000-$50,000. This premium reflects higher construction costs, increased labor expenses, and developers targeting foreign investors willing to pay for modern amenities and warranties.
Pre-construction buyers benefit from brand-new facilities, developer guarantees, and potential appreciation during the construction period. However, they face risks including construction delays, quality issues, and the possibility of further market oversupply by completion. Payment typically involves 10-30% during construction and the balance at delivery.
Resale properties offer immediate occupancy, established building management, and proven rental history. Buyers can inspect actual units rather than relying on renderings and promises. In neighborhoods like Costa del Este and Punta Pacifica, quality resale units with ocean views provide exceptional value compared to similar pre-construction offerings.
The choice between pre-construction and resale depends on your timeline and risk tolerance. For investment purposes, resale properties generally offer better immediate returns due to lower entry costs and existing rental demand.
Are property transaction costs competitive in Panama?
Panama maintains competitive transaction costs at 3-4% of the purchase price, favorable compared to regional competitors like Costa Rica.
The cost breakdown includes 2% transfer tax, notary fees of 0.1-0.25%, legal fees of 0.5-1%, and optional title insurance at 0.3-0.5%. These rates apply uniformly to foreign and local buyers, with no additional surcharges for international investors unlike Costa Rica's new 2% foreign buyer tax.
Additional costs may include property valuation fees ($300-$500), due diligence expenses ($500-$1,500), and translation services if needed. Buyers using mortgages face additional closing costs including appraisal fees and bank charges, typically adding 1-2% to the total transaction cost.
Compared to North American markets where total transaction costs can reach 5-7%, Panama remains attractive for international buyers. The transparency of costs and standardized fee structures make budgeting straightforward. Most importantly, there are no hidden taxes or surprise fees that sometimes plague foreign buyers in other Latin American markets.
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Which property types offer the best investment value today?
Mid-range resale condos in Panama City ($150,000-$300,000) currently offer the best investment value with low vacancy rates and no pre-construction premium.
Properties near Metro Line 4 stations present exceptional opportunities, with 5-10% appreciation expected by 2028 when construction completes. Current prices don't fully reflect the infrastructure value, creating a window for strategic buyers. Areas like San Francisco and El Cangrejo near future stations show particular promise.
Titled beachfront properties in established communities like Coronado benefit from new legal clarity under Ley 2 de 2025. The growing expat community ensures rental demand and resale liquidity. Properties with clear titles and existing infrastructure command premium prices but offer security and immediate rental potential.
Long-term rental properties in Casco Viejo attract young professionals and tourists, with heritage tax incentives sweetening returns. While purchase prices are higher, the combination of appreciation potential and rental income makes these properties attractive for patient investors willing to navigate the historic district's regulations.
How strong are Panama's economic fundamentals for property investment?
Panama's economy remains robust with GDP growth projected at 4-4.5% for 2025, positioning it among Latin America's fastest-growing economies.
The country benefits from diverse revenue streams including Panama Canal operations (expanding capacity), banking services, logistics hubs, and growing tourism sectors. The dollarized economy eliminates currency risk for US investors while providing stability rare in Latin American markets.
Major infrastructure projects demonstrate government commitment to growth. Metro Line 4 construction, the Amador Causeway redevelopment, and highway improvements between Panama City and beach communities signal continued urban development supporting property values. The canal expansion continues generating increased revenue and attracting international businesses.
Political stability sets Panama apart regionally. The country maintains investment-grade credit ratings and attracts significant foreign direct investment. With a service-based economy less dependent on commodity prices, Panama shows resilience during global economic fluctuations, supporting steady property appreciation over time.
What tax advantages does Panama offer property investors?
Panama offers exceptional tax advantages with primary residences valued up to $120,000 paying zero property tax.
Properties above this threshold pay only 0.5-0.7% on the excess value. For a $300,000 property, annual taxes total approximately $1,260, compared to $2,250 in Costa Rica before their 2% foreign buyer surcharge. This favorable tax regime significantly reduces holding costs for investors.
New construction often qualifies for 15-20 year property tax exemptions, though buyers should verify specific building eligibility. Capital gains tax doesn't apply to primary residences if owned for more than two years. Investment properties face a 10% capital gains tax on profits, but various deductions can reduce the effective rate.
Panama imposes no foreign buyer surcharge, unlike Costa Rica's recently implemented 2% tax. Transfer taxes apply equally to all buyers at 2% of the sale price. The combination of low property taxes, exemptions for new construction, and absence of discriminatory foreign buyer taxes makes Panama highly competitive for international investors.
What are realistic price appreciation forecasts for Panama properties?
Short-term forecasts suggest modest appreciation of 2-4% annually in established neighborhoods, with 5-10% potential in areas benefiting from infrastructure improvements.
The oversupply in luxury new construction will likely cap aggressive price growth through 2026. However, mid-range properties favored by local buyers and expat residents show stronger appreciation potential due to genuine demand rather than speculation.
Long-term projections (3-5 years) appear more optimistic with expected annual appreciation of 4-6%. Completion of Metro Line 4 in 2028, continued GDP growth, and absorption of current inventory should support steady value increases. Properties in the $200,000-$500,000 range near new infrastructure show the strongest potential.
Investors should plan for minimum 3-5 year holding periods to realize meaningful gains. While Panama won't see the explosive 15-20% annual appreciation of past boom periods, steady growth combined with rental income can generate attractive total returns. Focus on properties with genuine demand rather than speculative luxury developments.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Panama. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
How has cryptocurrency adoption affected Panama's property market?
Cryptocurrency integration represents a significant shift with 5-10% of residential transactions now involving digital assets as of June 2025.
The 2025 regulatory framework legally recognizes Bitcoin, Ethereum, and stablecoins for property purchases, with instant conversion to USD for official recording. This positions Panama as Latin America's most crypto-friendly property market, attracting international buyers seeking transaction efficiency.
Properties marketed to crypto investors often achieve faster sales and sometimes command slight premiums. The appeal extends beyond payment method - crypto buyers appreciate Panama's financial innovation and regulatory clarity. However, traditional financing remains unavailable for crypto purchases, requiring full cash payment at closing.
This trend particularly benefits international buyers facing banking restrictions or complex international wire transfers. Developers increasingly accept crypto for pre-construction deposits, though final payments typically require conversion to USD. The integration signals Panama's commitment to attracting tech-savvy international investors and modernizing its property market.
It's something we develop in our Panama property pack.
What visa options enhance property investment strategies?
The Qualified Investor Visa threshold increased to $300,000 in 2025, requiring larger property investments but offering permanent residency with minimal stay requirements.
Properties must be titled (not Rights of Possession) to qualify, limiting options in some coastal areas. The visa provides immediate permanent residency, allowing investors to access better mortgage rates and establishing a path to citizenship after five years.
The Friendly Nations Visa remains available with a $200,000 property investment for citizens of 50+ countries including the US, UK, and most European nations. This lower threshold makes it accessible to more investors while still providing residency benefits. Processing typically takes 2-3 months with proper documentation.
Residency status improves mortgage terms, reducing rates by 1-2% and increasing loan-to-value ratios. Residents also gain access to Panama's territorial tax system, paying no tax on foreign-sourced income. For investors planning regular visits or eventual relocation, securing residency through property investment offers both lifestyle and financial advantages.
How does the current buyer-seller dynamic affect negotiations?
The market clearly favors buyers in June 2025, particularly in the new construction segment where 16,519 units compete for attention.
Developers face pressure to move inventory, offering incentives including furniture packages worth $10,000-$30,000, covering closing costs, and providing flexible payment terms. Some developers accept 5-10% deposits with extended payment schedules during construction. Cash buyers can negotiate 5-15% discounts off list prices.
The resale market shows more balance, especially for properties under $300,000 where local demand remains strong. However, sellers of luxury properties or units in buildings with high vacancy rates often accept offers 10-20% below asking price. Properties listed over 90 days typically see motivated sellers willing to negotiate.
Buyers should leverage this market dynamic by comparing multiple properties and developers. Make offers below asking price, request additional incentives, and don't hesitate to walk away if terms aren't favorable. The abundance of inventory means patient buyers can find exceptional deals, particularly in the luxury segment where oversupply is most acute.
What risks should foreign buyers consider in Panama's market?
Foreign buyers face several specific risks including the 10-kilometer border restriction preventing ownership near Costa Rica and Colombia.
While this doesn't affect Panama City or most beach areas, buyers should verify property location before proceeding. Rights of Possession properties in coastal areas require extra due diligence as they lack full title, though recent regulations provide more clarity.
Construction quality varies significantly among developers. Some cut corners to reduce costs, leading to maintenance issues and declining property values. Research developer track records, inspect completed projects, and consider established buildings with proven management over new developments from unknown builders.
Market oversupply in luxury segments could persist for years, limiting appreciation and rental potential. Focus on properties with genuine demand from local residents and established expat communities rather than speculative luxury developments targeting foreign investors. Consider worst-case scenarios where rental income and appreciation fall short of projections.
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.
June 2025 presents exceptional opportunities for strategic property buyers in Panama, with market conditions favoring those who approach with careful planning and realistic expectations.
The combination of significant oversupply creating negotiating leverage, competitive transaction costs, strong economic fundamentals, and improved regulations for foreign buyers makes this an advantageous time to invest. While mortgage rates remain elevated for foreigners, the absence of discriminatory taxes and favorable property tax regime offset this disadvantage. Focus on resale properties or carefully selected pre-construction projects near infrastructure improvements for optimal value.
Sources
- Panama Equity - Panama Real Estate Q1 Market Report
- The Latin Investor - Panama Real Estate Market Statistics
- Casa Solution - Getting a Mortgage in Panama as an Expat 2025
- The Latin Investor - Panama Real Estate Market Trends
- Bandco Legal - Panama GDP Growth 2025
- Taxes for Expats - Buying Property in Panama Guide
- Overseas Property Alert - Panama Market Update 2025
- Kaimeta - Panama City Accepting Bitcoin and Ethereum
- Expat-tations - Panama Property Taxes
- The Wandering Investor - Panama City Real Estate Market Analysis
- NTL Trust - Panama Residency by Investment