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Considering buying real estate in Panama City? You're not alone!
Many people are enchanted by Panama City's modern skyline and dream of owning a luxurious apartment or a stylish penthouse there.
Does it make sense, though? Are property prices increasing in Panama City? Is it expensive? Should I buy property in Casco Viejo or Punta Pacifica? Are there any secret taxes? Where can you get a rental yield above 7%?
We've solved it for you.
At TheLatinvestor, we've done our homework on this market. Actually, we've put all our findings together in a pack. Get it now.
In this article, we're happy to share useful information with you.
How is the real estate market in Panama City?
Confused about the property market's status? Everyone has their views. We prefer data and statistics over opinions for accurate assessments.
Types of properties
In Panama City, there are various types of properties available for sale, catering to different preferences and needs.
These include apartments and condos offering modern city living with amenities, houses and townhouses providing more space and privacy, commercial properties suitable for businesses, and possibly land for those interested in building their own property.
Whether you're looking for a place to live, invest, or establish a business, Panama City offers a diverse range of property options to choose from.
Buy or rent?
(If you're purchasing for personal use and not for renting)
If Panama City is your city of choice, you may be thinking about the advantages of buying versus renting a property in this vibrant capital of Panama.
Obviously, it's better to buy if you're looking for long-term stability and the potential to build equity in the property.
One data can help us make a decision - the price-to-rent ratio. It's like a measure of how much rental income you'll need to afford the property at its current value.
According to Numbeo, the property price-to-rent ratio in Panama City is around 11.63, which is quite low.
It means that, on average, you would only need 12 years of rental payments to actually purchase a property. Buying is clearly an attractive option in Panama City.
Property prices in Panama City
On average, according to the last data from National Institute of Statistics and Census (INEC), purchasing a property in Panama City will cost you around $2,480 per square meter.
There are significant differences, clearly. The value of a square meter for an apartment in Panama City might differ from a suburban house in Costa del Este. We actually offer a more in-depth analysis in our pack for buying property in Panama City and in Panama.
To put things in perspective, it means that, instead of purchasing a flat in Manhattan, you can become the owner of 5 properties in Panama City.
Also, housing prices in Panama City are way cheaper (-62%) than in Dubai.
The most expensive neighbourhoods in Panama City are probably Punta Pacifica, San Francisco, and Costa del Este, while the cheapest ones are likely El Chorrillo, San Miguelito, and San Miguel.
First and foremost, we have to acknowledge that Panama is known today for being a stable country. The last Fragile State Index that has been reported for this place is 47.5.
Keep this in view when pondering the viability of buying a property in in Panama City.
If we look at the forecasts made by the IMF, Panama's economy is expected to soar by 19.2% in the coming 5 years, resulting in an average GDP growth rate of 3.8%.
If you intend to invest in real estate in Panama City it's a good thing because when the economy grows, people often experience an increase in wealth, it typically translates to a surge in housing costs.
Also, in Panama, the average GDP per capita has changed by 3.1% over the last 5 years. The growth, although minimal, is still present.
This trend can lead to a rise of property prices in Panama City over the course of 2024 and also later on.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Panama right now.
Buying property in Panama City
It can be difficult to buy property in Panama City due to the difficulty of obtaining reliable and up-to-date information. That's why we have created the pack to buy property in Panama City and in Panama.
Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.
Here, we are providing you with a simpler version to assist you in better comprehending the information.
This is the step-by-step process to purchase a property in Panama City:
- Research Panama City's real estate market and legal requirements for foreign buyers.
- Obtain a "Certification of No Liens" from the Public Registry to verify the property's legal status.
- Engage a reputable local real estate agent who understands the Panama City market.
- Visit properties that meet your criteria and obtain detailed property information.
- Request a "Catastro" certificate from the Ministry of Economy and Finance to confirm property boundaries and taxes.
- Hire a Panamanian attorney to review all documents and handle the due diligence process.
- Negotiate the purchase price and terms with the seller.
- Draft a formal "Promise to Purchase" agreement, outlining conditions and timelines.
- Obtain a "Finiquito" certificate from the Social Security Office to ensure no outstanding property-related debts.
- Secure financing from a local bank or provide proof of funds.
- Sign the final "Public Deed of Purchase" before a Panamanian Notary Public.
- Register the property transfer at the Public Registry to complete the purchase process in Panama City.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Panama.
Make a profitable investment in Panama City
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Where to find a property
Explore these websites to find properties in Panama City.
- Panama Realtor - A comprehensive real estate website offering a wide range of properties for sale and rent in various locations.
- Panama Equity Real Estate - A real estate agency specializing in properties for sale and rent in Panama City and popular locations.
- Region Panama Realty - A real estate company in Panama offering properties for sale and rent across various regions and provinces.
- Premier Casa Panama - An international real estate company offering a wide range of properties for sale in Panama.
- Panama Coastal Real Estate - United Country Real Estate specializes in coastal properties and is based in Panama.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Panama.
Which properties for which budget?
As mentioned before, the average price per sqm in Panama City is $2,480. A 1-bedroom property with 60 square meters of space would cost approximately $149,000, while a 2-bedroom with 85 square meters of space would cost around $211,000.
Obviously, property prices will change based on both the property itself and its location.
Prices tend to be higher in the top areas of Panama City. If you're looking at Punta Pacifica, a residence might be about $600,000, whereas an apartment in Costa del Este could be priced at $260,000.
Some locations are less expensive. You could find a residence in San Francisco for $250,000, or you may discover a residence in Pueblo Nuevo priced at $160,000.
We give a more detailed pricing list in our full pack for buying property in Panama.
Risks and pitfalls
Here are the main pitfalls when buying property in Panama City:
- Encroachments on property boundaries due to informal land development.
- Coastal properties subject to strict maritime zone restrictions.
- Potential issues with beachfront concessions affecting property use.
- Unanticipated impacts of heavy rains and flooding on vulnerable areas.
- Limited availability of title insurance for property transactions.
- Delays in obtaining necessary permits and approvals from local authorities.
- Challenges related to foreign ownership regulations and residency permits.
- Risks of investing in pre-construction properties with uncertain completion dates.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Panama Property Pack
Living in Panama City
Living in Panama City is an exciting experience, offering a vibrant urban lifestyle with access to beautiful beaches, lush rainforests, and a variety of cultural attractions.
Cost of living
The cost of living in Panama City is generally lower than in many other major cities around the world. It is possible to live comfortably on a moderate budget, as the cost of groceries, housing, and other essentials are quite affordable.
Here are some examples to better understand the cost of living in Panama City:
- Rent for a one-bedroom apartment in El Cangrejo neighborhood: $900 per month.
- A meal at a local seafood restaurant with a ceviche dish: $15.
- Monthly transportation pass for Metro Bus and Metro: $30.
- Utilities (electricity, cooling) for a small apartment in Bella Vista: $100 per month.
- A bottle of Ron Abuelo, a popular Panamanian rum: $15.
- Traditional drink Chicheme (corn and milk beverage): $2 per glass.
- A coffee at a local café using locally grown Geisha beans: $3.50.
- An artisanal Panama hat (sombrero pintao) from a craft market: $40.
Since our objective is to present information in a clear and reader-friendly manner, we've created a summary table outlining the various neighborhoods in Panama City. For yields, prices and rents, check our property pack.
Casco Viejo, also known as the Old Town, is the historic center of Panama City. It boasts colonial architecture, cobblestone streets, and a vibrant arts and cultural scene, attracting tourists and locals alike.
Historic charm, cultural attractions, lively atmosphere.
Parking can be challenging, some areas may lack modern amenities.
Punta Pacifica is a modern upscale neighborhood with luxurious high-rise apartments and waterfront views. It's home to the renowned Punta Pacifica Hospital and close to shopping centers and entertainment options.
Exclusive real estate, waterfront living, proximity to high-quality healthcare.
Higher cost of living, traffic congestion during peak hours.
Obarrio is a bustling commercial district with numerous office buildings, banks, and restaurants. It's a central location for business activities and offers easy access to public transportation.
Business hub, diverse dining options, good transport links.
Can be noisy and crowded during weekdays, limited green spaces.
Bella Vista is a vibrant and trendy neighborhood with a mix of residential and commercial areas. It offers a lively nightlife scene, popular restaurants, and proximity to parks and the Cinta Costera.
Entertainment options, cultural diversity, recreational areas.
Parking can be challenging, traffic congestion during peak hours.
San Francisco is a well-established residential area with a blend of middle-class and upscale neighborhoods. It has various schools, supermarkets, and restaurants, making it family-friendly.
Good schools, diverse housing options, proximity to amenities.
Some areas may be crowded, traffic during rush hours.
Costa del Este
Costa del Este is a modern and exclusive neighborhood known for its luxury residential towers, shopping centers, and recreational parks. It offers a high-quality lifestyle with beautiful ocean views.
Prestigious real estate, scenic views, family-friendly environment.
Higher property prices, limited public transportation.
El Cangrejo is a vibrant and diverse neighborhood with a mix of residential and commercial properties. It's known for its lively nightlife, international restaurants, and a wide range of entertainment options.
Entertainment and dining scene, cultural diversity, convenient location.
Noise and traffic during weekends, limited parking.
El Dorado is a residential and commercial area with shopping centers, supermarkets, and schools. It offers a convenient lifestyle and a mix of housing options.
Convenient amenities, diverse housing, good transport connectivity.
Traffic congestion during rush hours, limited green spaces.
Santa Ana is a historic neighborhood with Spanish colonial-style houses and charming streets. It offers a glimpse into Panama's past and is home to the Iglesia San Jose, a significant religious landmark.
Historic charm, cultural heritage, peaceful ambiance.
Limited parking, fewer modern amenities.
Marbella is a mixed-use area with a combination of offices, restaurants, and residential buildings. It's located near the waterfront and is known for its nightlife and proximity to the banking district.
Central location, entertainment options, proximity to the financial district.
High traffic congestion, limited green spaces.
Life in Panama City
Panama City is the financial and economic hub of Panama and is known for its thriving banking and financial services sector. The city also has a growing tourism sector, with numerous luxury hotels, restaurants, and shopping malls.
What expats usually like the most in Panama City is the vibrant culture, with its diverse restaurants and nightlife, and the tropical climate that offers an array of outdoor activities.
Unfortunately, there is a bit of crime in Panama City (the crime rate index is around 49, which is not so low. Examples of crimes in Panama City include burglary, robbery, pickpocketing, and drug trafficking, which are largely concentrated within the local population and do not usually affect the expat population.
A good point for a property investor - Panama City has a mass rapid transit system called the Metro de Panama, which is the first of its kind in Central America.
Access to healthcare in Panama City is very good, with a Healthcare Index of 60. Good healthcare facilities is a positive indicator in a real estate market.
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Renting out in Panama City
If you're considering purchasing property solely for renting and earning income, you'll find valuable information in this section.
Tenant Profiles in Panama City
If you decide to buy and rent out to long-term tenants, you should target professionals working in the banking, tourism, and shipping industries, as well as those employed at the Panama Canal. Additionally, you should consider targeting retirees and expats who are looking for a more permanent residence in the city.
Here is a little summary table we've made for you.
|Property type and area
|Profiles of potential tenants
|What they are looking for
|Expected monthly rent in $
Apartment in Punta Pacifica
Luxurious living, waterfront views
$1500 - $3000
Condo in Costa del Este
Modern amenities, family-friendly
$1200 - $2500
Studio in Bella Vista
Central location, urban lifestyle
$800 - $1500
Apartment in Obarrio
Business district, convenience
$1000 - $2000
House in Clayton
Families, international students
Quiet surroundings, proximity to schools
$1500 - $3000
Apartment in El Cangrejo
Young professionals, students
Nightlife, affordable living
$600 - $1200
Condo in San Francisco
Urban living, proximity to amenities
$800 - $1500
These days, Panama City presents attractive opportunities in terms of rental yields. In fact, you can easily achieve yields above 9% due to the high demand for rental properties in the area.
Properties located in the central neighborhoods of Panama City, such as El Cangrejo and San Francisco, tend to provide the best rental yields due to their close proximity to key business and entertainment districts that attract a large number of renters. Additionally, properties located in the suburban areas of the city, such as Costa del Este and Punta Pacifica, have seen an increase in rental yields due to their modern infrastructure and amenities.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in Panama City are taxed at 6%, which is very advantageous.
You could also decide to rent short-term to business travelers, vacationers, or expats living in Panama City. Additionally, there are many digital nomads and remote workers looking for short-term accommodation in the city.
If you decide to go with that option, look for properties in the areas of Casco Viejo, San Francisco, Obarrio, Punta Pacifica, and Costa del Este. These areas are in high demand for short-term rentals and have the best rental returns.
Is it worth buying real estate in Panama City then?
In Panama City, buying a property is a smart choice for those seeking long-term stability and potential equity growth in a stable economic environment. The price-to-rent ratio, at around 11.63, indicates that buying is an attractive option, especially if you plan to hold onto the property for an extended period. The city's low cost of living is also appealing, making it an attractive destination for expats and retirees looking for affordability and comfort in their purchased property.
Additionally, Panama's stable economy and forecasts of GDP growth suggest that property prices are likely to appreciate over time, offering a promising investment opportunity.
However, for those looking for quick gains or short-term investments, Panama City might not be the ideal choice due to potential fluctuations in the real estate market and associated transaction costs. Property-related risks, such as encroachments on property boundaries and coastal property restrictions, should be carefully considered.
Foreign ownership regulations and the need for permits and approvals can pose challenges, requiring thorough understanding and compliance.
In conclusion, buying a property in Panama City is a solid choice for long-term stability and rental income potential, but it's crucial to conduct thorough research, be aware of potential risks, and align the decision with your specific financial goals and risk tolerance.
Make sure you understand the real estate market in Panama City
Don't rush into buying the wrong property in Panama. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.