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Everything you need to know is included in our Panama Property Pack
Are you thinking of investing in property in Panama? Are you thinking about when to take action?
Market timing is a subject where opinions vary among individuals. Your Panamanian acquaintance might suggest that now is the opportune time to buy property, whereas your spouse, who is originally from Panama City, might have a different view and recommend waiting for more stability.
At TheLatinvestor, when we create articles or update our pack of documents related to the real estate market in Panama, we prioritize facts and data over opinions and rumors.
We have thoroughly examined all the official reports and statistics available on government websites. Now, we have a comprehensive database of reliable information and we can help you determining whether it is currently advantageous to purchase real estate in Panama.
Ready? Let's go!
How is the property market in Panama these days?
Panama is known today for being a stable country
Positive
Stability should be the first thing you look at when you want to invest in real estate because it is crucial for long-term growth and profitability. It is an information you need as a foreigner looking to buy a property in Panama.
Good news for you, Panama is known for its stability. The last Fragile State Index reported for this country is 47.7, which is a remarkable score.
Panama is known for its stable economy, largely due to the strategic importance and revenue generated by the Panama Canal, which facilitates a significant portion of global maritime trade. Additionally, the country has a stable political environment characterized by democratic governance and peaceful transitions of power since the U.S. invasion in 1989, which ousted the military dictatorship.
Real estate investors can count on the country's stable foundation for investment. Let's review the economic outlook.
Panama is poised for strong growth
Positive
Before buying a property, consider the economic well-being of the country.
In accordance with IMF projections, Panama will, in 2024, grow by 2.5%, which indicates the country is heaidng in the right direction. Regarding 2025, we're talking 3%.
Besides that, the economy will keep growing since Panama's economy is expected to increase by 15.2% during the next 5 years, resulting in an average GDP growth rate of 3%.
The expected sustainable growth rate in Panama indicates a stable and expanding economy, which can lead to increased demand for real estate and potentially higher property values. For investors, this means a greater likelihood of profitable returns and a secure investment environment.
However, there are other factors to consider beyond GDP growth.
Panama's population is growing and getting (a bit) richer
Positive
When you're looking to buy real estate, population growth and GDP per capita deserve careful consideration because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Panama, the average GDP per capita has changed by 3.1% over the last 5 years. The growth, although minimal, is still present. Furthermore, the Panamanian population is growing (+8% in 5 years).
This means that, if you purchase an oceanfront apartment in Panama City and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, there might be an increase in rental demand in Panamanian cities like Panama City, Bocas del Toro, or Boquete in 2025.
Rental yields are really attractive in Panama
Positive
If you're considering a property investment, evaluate its profitability by examining the expected rental yields.
Rental yield is the amount of money you can make from renting out a property, relative to the property's value.
According to Numbeo, rental properties in Panama offer gross rental yields ranging from 6.8% and 9.5%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Panama.
Yields like these are rare to come by.
Everything you need to know is included in our Panama Property Pack
In Panama, inflation is expected to be minimal
Neutral
Inflation is when the prices of goods and services keep getting higher.
It's when your regular cup of Panamanian coffee costs 3.50 Panamanian balboas instead of 3 Panamanian balboas a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, potentially leading to capital appreciation.
- Inflation can result in higher rental rates, increasing the property's cash flow.
- Inflation decreases the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, helping preserve the investment's value.
- Diversifying into real estate provides stability during periods of inflation.
As projected by the IMF, over the next 5 years, Panama will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.
This data shows that Panama will likely experience almost no inflation. If you buy a property now, you may experience lower appreciation potential and reduced returns on investment.
Is it a good time to buy real estate in Panama then?
Time to conclude !
2025 is shaping up to be an excellent time to consider buying property in Panama, and there are several compelling reasons for this. First and foremost, Panama is recognized today as a stable country, which is a crucial factor for anyone looking to invest in real estate. Stability in a country often translates to a more predictable and secure investment environment, reducing the risks associated with property ownership. This stability is further supported by the country's robust legal framework and investor-friendly policies, making it an attractive destination for both local and international buyers.
Moreover, Panama's economy is on a promising trajectory, with an expected growth of 15.2% over the next five years, averaging a GDP growth rate of 3% annually. This sustainable growth rate is a strong indicator of a stable and expanding economy, which can lead to increased demand for real estate. As the economy grows, so does the potential for property values to rise, offering investors the opportunity for profitable returns. This economic expansion is likely to attract more businesses and expatriates, further boosting the real estate market.
Another factor to consider is Panama's growing and increasingly affluent population. As more people move to Panama and the existing population becomes wealthier, the demand for housing is expected to rise. This demographic trend can lead to higher property values and rental income, making real estate investment in Panama a potentially lucrative venture. According to Numbeo, rental properties in Panama currently offer gross rental yields ranging from 6.8% to 9.5%, which is quite attractive for investors seeking steady income streams.
Lastly, Panama's inflation is expected to remain minimal, which is good news for property investors. Low inflation helps maintain the purchasing power of rental income and can contribute to the overall stability of property values. This economic environment, combined with the factors mentioned above, makes 2025 a promising year to invest in Panama's real estate market. With a stable country, a growing economy, an increasing population, and minimal inflation, the conditions are ripe for making a sound property investment in Panama.
We hope this article has been helpful!. If you need to know more, you can check our our pack of documents related to the real estate market in Panama.
-Will real estate prices go up in Panama?
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.