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Panama City's real estate market is showing steady recovery and improvement as of September 2025, with moderate price appreciation and attractive rental yields making it an appealing option for both investors and relocating buyers.
Property prices have risen 0.8–2.4% year-on-year since 2024, with luxury segments performing particularly well and foreign buyers continuing to drive demand in key expat neighborhoods like Costa del Este and Casco Viejo.
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Panama City's property market offers stable growth with 6-8% rental yields and foreigner-friendly regulations, making it attractive for international buyers.
Current prices average USD 2,483/m² for apartments, with luxury segments in Punta Pacifica and Costa del Este commanding premium rates while affordable areas like El Cangrejo offer strong investment potential.
| Market Aspect | Current Status (Sep 2025) | Investment Outlook |
|---|---|---|
| Average Price per m² | USD 2,483 (apartments) | 1-2% annual growth expected |
| Rental Yields | 6-8% gross yields | Strong rental demand continues |
| Foreign Ownership | Full rights, no restrictions | Very investor-friendly |
| Mortgage Rates | 6.57% (30-year loans) | Declining trend |
| Transaction Costs | 2-4% for buyers | Moderate and predictable |
| Property Tax | 0.5-0.7% (exemptions available) | Tax-efficient structure |
| Economic Growth | 4% annual GDP growth | Stable macroeconomic environment |
What are property prices doing right now in Panama City?
Property prices in Panama City are experiencing steady, moderate growth as of September 2025.
The current average asking price across the city stands at USD 2,483/m² for apartments, with significant variation by neighborhood and property type. In prime expat zones like San Francisco, Costa del Este, and Casco Viejo, new off-plan units are priced between USD 2,720–4,150/m².
Mid-range apartment prices typically cluster in the $1,600–2,050/m² range, while prime neighborhoods such as Costa del Este and Punta Pacifica command premium rates of $2,800–$3,200/m². The luxury segment is performing particularly well, with areas like Casco Viejo and Punta Pacifica enjoying 2–4% annual growth.
However, the mass-market house sector has shown some weakness, actually declining by 3.2% year-on-year in 2025. This creates a two-speed market where luxury and well-located properties are appreciating while some segments face headwinds.
The market is being driven primarily by foreign demand and persistently tight new construction inventory in high-end and central neighborhoods.
How have prices changed over the past few years?
Panama City's property market has shown a moderate but sustained recovery from previous downturns.
Prices have increased 0.8–2.4% year-on-year since 2024, representing a steady improvement after the market challenges experienced during the pandemic years. This growth rate reflects a maturing market that has moved beyond the double-digit appreciation seen in earlier boom periods.
The recovery has been segmented, with luxury properties and well-located neighborhoods leading the way. Foreign buyers have been particularly active in driving demand in established expat areas, contributing to price stability and growth in these segments.
It's something we develop in our Panama property pack.
The market has benefited from renewed local and international investment interest, supported by Panama's stable economic performance and investor-friendly policies.
What are experts saying about the short-term real estate outlook?
Real estate experts forecast a modest, segmented recovery for Panama City's property market through the remainder of 2025.
The consensus among market analysts is that foreign demand will continue to lead growth, particularly in high-end and central neighborhoods where new construction inventory remains tight. Rental yields are expected to remain solid at 6–8%, providing attractive income potential for investors.
However, experts caution that some areas still face lingering oversupply issues from pandemic-era construction, which may limit price appreciation in certain segments. The mid-market condo sector is particularly affected by this oversupply situation.
Forecasters predict continued moderate growth of 1–2% annual price appreciation through 2030, with established expat and luxury neighborhoods expected to outperform. The market is not expected to see rapid boom conditions, but rather stable, sustainable growth patterns.
The combination of solid rental income potential and modest capital appreciation makes the market attractive for both investors seeking yield and those looking for stable long-term growth.
What are the long-term growth prospects for Panama City?
Long-term growth prospects for Panama City's real estate market remain positive but moderate, supported by fundamental economic and demographic drivers.
Panama's role as a regional business and expat hub ensures ongoing demand for quality housing, particularly in areas with good infrastructure and amenities. The country's strategic position as a logistics and financial center continues to attract international businesses and their employees.
Government-backed infrastructure investments, tourism recovery, and investor-friendly visa regimes support a stable long-term outlook. The Qualified Investor Program, which offers fast-track residency for investments over $300,000, helps maintain foreign buyer interest.
However, the era of double-digit percentage gains appears to be over, with experts expecting the market to settle into a pattern of steady, sustainable growth. This represents a maturation of the market that should provide more predictable returns for investors.
The main growth drivers include continued urbanization, growing middle class, sustained foreign investment, and Panama's position as a regional hub for business and finance.
How much new construction is happening and how could it affect supply?
New construction activity in Panama City is experiencing a surge, particularly in premium areas and luxury segments.
Construction is especially active in Costa del Este, Santa María, Punta Pacifica, and revitalizing downtown districts, with new luxury condo towers, infrastructure projects, and mixed-use communities underway or planned. This development is primarily focused on the high-end market where demand remains strong.
The mid-market segment faces a different situation, with a reported housing deficit of approximately 140,000 units indicating chronic undersupply in this price range. This creates opportunities for developers who can deliver quality mid-market housing.
Aggressive pre-construction sales and discounts persist across various segments, which is helping to tighten supply in luxury segments while some oversupplied mid-range and mass-market condos continue to experience modest softening.
The new supply is generally well-absorbed in prime locations, but buyers should be cautious about developments in areas with existing oversupply issues.
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What are rental yields like compared to the purchase prices?
Rental yields in Panama City are attractive, ranging from 6–8% gross yields for most properties, with some achieving up to 9% in optimal locations.
The average gross rental yield improved to 7.8% in Q2 2025, up from 6.8% a year prior, indicating strengthening rental market conditions. Yields are typically highest in affordable, high-demand neighborhoods like El Cangrejo, and lowest in expensive luxury towers where absorption can be slower.
Rental prices have shown strong growth, with studios and 2-bedroom apartments renting for $1,550–$1,600, while 3-bedroom units command up to $2,400. Rents have climbed 12% year-on-year in key expat areas, supporting strong yield potential.
The rental market benefits from consistent demand from expats, business travelers, and local professionals, particularly in well-located neighborhoods with good amenities and transportation links.
It's something we develop in our Panama property pack.
What are the current interest rates for mortgages in Panama?
Mortgage rates in Panama have been declining and currently average 6.57% for 30-year loans as of September 2025.
This represents a notable improvement from earlier in the year when rates peaked above 7%, providing better financing conditions for buyers. The declining trend in mortgage rates is expected to continue if underlying interest rates are cut further.
However, foreign buyers should be aware that obtaining financing in Panama can be more challenging than for local buyers, and many international purchasers opt for cash transactions to simplify the buying process.
Local banks typically require significant documentation and may have stricter lending criteria for foreign borrowers, though the process is generally straightforward for those who qualify.
The improving rate environment makes financed purchases more attractive for those who can access local lending facilities.
How easy is it for foreigners to buy property there?
Panama is among the most foreign-friendly property markets globally, with foreigners enjoying the same property rights as locals.
Foreign buyers have identical ownership rights to Panamanian citizens, with no citizenship or residency requirements to purchase property. The only restrictions apply to certain border areas and indigenous zones, which represent a small fraction of available properties.
The purchasing process is straightforward and generally secure, especially when working with a reputable lawyer. Notary involvement is mandatory, which provides additional legal protection for buyers.
The Qualified Investor Program offers fast-track residency for property investments exceeding $300,000, making Panama particularly attractive for investors seeking residency benefits.
Documentation requirements are reasonable, and the legal framework is well-established and reliable for foreign property ownership.
What are the taxes and fees involved in buying and owning property?
Property transaction costs in Panama are moderate and predictable, with total buyer costs typically ranging from 2–4% of the purchase price.
| Cost Type | Rate/Amount | Details |
|---|---|---|
| Transfer Tax | 2% of sale price | Paid at closing |
| Legal & Notary Fees | 1–2% of price | Professional services |
| Registration | ~0.3% | Property registration |
| Appraisal | $300+ | Property valuation |
| Survey | $150+ | Property survey |
| Property Tax (Annual) | 0% - 0.7% | Based on property value |
| HOA Fees (Monthly) | $1.50–2/sqm | For condominiums |
Annual property taxes are very favorable, with properties valued under $120,000 being completely exempt. Properties between $120,000–700,000 pay 0.5%, while those above $700,000 pay 0.7%. New construction often receives 5–20 year tax exemptions.
HOA fees for condominiums typically range from $1.50–2 per square meter per month, covering building maintenance and amenities.
What neighborhoods are considered the best value right now?
The best value neighborhoods in Panama City vary depending on your budget and investment strategy, with different areas offering distinct advantages.
El Cangrejo stands out as an excellent entry-level option, offering affordable prices, central location, and strong rental yields. The neighborhood is well-established with good amenities and transportation links.
Bethania provides budget-friendly options in a walkable area, making it attractive for families and entry-level buyers seeking value. The area offers good local amenities and improving infrastructure.
For those seeking gentrification upside, Playa Caracol and Santa Ana present early-investor opportunities with potential for significant appreciation as these areas continue to develop and improve.
San Francisco offers a middle-ground option with modern developments, diverse housing stock, and appeal to both families and investors seeking a balance of value and amenities.
It's something we develop in our Panama property pack.
How stable is the overall economy and political situation in Panama?
Panama's economic and political environment is among the most stable in Latin America, providing a solid foundation for real estate investment.
The economy is currently growing at approximately 4% annually, making it one of the region's best performers in 2025. This growth is supported by Panama's strategic position in logistics, shipping, banking, and continued foreign direct investment.
The country benefits from a fully dollarized economy, which eliminates currency risk for international investors and provides monetary stability. This dollarization has been a key factor in maintaining economic stability over the years.
Politically, Panama has a history of peaceful transitions of power and maintains stable democratic governance. While, like any emerging market, there are political risks to consider, the overall institutional framework is well-established and reliable.
The government's pro-business policies and investor-friendly regulations have contributed to sustained foreign investment and economic growth.
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 risks or downsides should buyers be aware of before purchasing?
While Panama City offers attractive investment opportunities, buyers should be aware of several important risks and considerations.
Some neighborhoods remain oversupplied, particularly in middle-market condos, which can lead to slower price appreciation and increased rental competition that may lower yields. Careful market analysis is essential to avoid oversupplied areas.
Short-term rentals of less than 45 days are banned in Panama City unless the building is specifically hotel-licensed or zoned for such rentals, with hefty fines for violations. This limits Airbnb and similar investment strategies.
While hurricane risk is low, earthquake insurance is highly recommended due to the country's seismic activity. This represents an additional cost that should be factored into ownership calculations.
Foreign financing can be more difficult to obtain than local financing, leading many international buyers to make cash purchases. This can limit leverage opportunities and require larger upfront capital commitments.
Legal fees, closing costs, and ongoing HOA and condo fees add to the total cost of ownership and should be carefully calculated when evaluating investment returns. Thorough due diligence is crucial, including title checks, lawyer vetting, and careful review of all purchase and HOA documents.
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 City's real estate market in 2025 presents a compelling opportunity for both investors and residents, offering stability, attractive yields, and foreigner-friendly regulations in a growing economy.
The combination of moderate price appreciation, solid rental returns, and accessible ownership structure makes it particularly attractive for international buyers seeking diversification in Latin American real estate markets.
Sources
- Global Property Guide - Panama Price History
- The LatinVestor - Panama City Price Forecasts
- The LatinVestor - Panama Real Estate Trends
- Panama Sovereign - Real Estate Market Forecast
- Panama Equity - Pre-Construction Developments
- Global Property Guide - Panama Rental Yields
- WFTV - Mortgage Rates Panama City
- The LatinVestor - Panama Real Estate for Foreigners
- Casa Solution - Buying Process
- BrightTax - Buy Property in Panama