Authored by the expert who managed and guided the team behind the Panama Property Pack
Yes, the analysis of Panama City's property market is included in our pack
What do the latest numbers reveal about Panama City's real estate market? Are property prices on the rise, or are they stabilizing? Which neighborhoods offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Panama City, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
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1) Mortgage interest rates in Panama City are fluctuating between 5.5% and 6.5%
The average mortgage interest rate in Panama City is currently fluctuating between 5.5% and 6.5%.
This fluctuation is largely due to the economic conditions in the United States. Since Panama uses the U.S. dollar, any changes in U.S. monetary policies, especially those set by the Federal Reserve, can impact mortgage rates in Panama, often with a slight delay.
In 2023, the average interest rate for home loans in Panama was about 5.84%. However, this rate isn't set in stone. Foreigners, for instance, might face higher rates due to different tax implications. By 2024, some mortgage rates had climbed, with certain loans exceeding 7.25% for non-preferential credit terms, influenced by rising U.S. policy changes.
Mortgage terms in Panama also affect these rates. Typically, terms range from 10 to 15 years. Nationals often enjoy longer terms and preferential rates thanks to government subsidies, while foreigners usually deal with stricter requirements and shorter loan terms. Despite these hurdles, there was a noticeable increase in demand for new mortgage applications by June 2024, showing a growing interest in housing financing.
Sources: Kraemer Law, TVN-2, En Segundos
2) In Panama City's Costa del Este, the average price per square meter is between $2,800 and $3,200
In Panama City's Costa del Este, the average price per square meter is between $2,800 and $3,200.
This price range is largely due to the limited supply of quality, ocean-view apartments in the area. With fewer options available, prices naturally climb. Even properties on the lower end of the price spectrum maintain high quality and offer attractive rental returns, as noted by Punta Pacifica Realty.
Foreign investment is another driving force behind the rising property prices in Panama City. This influx of capital has pushed up the average dwelling sales price across the metropolitan area, a trend highlighted by Panama Equity Real Estate. The broader increase in real estate values is evident in Costa del Este.
Specific listings in the area further illustrate this price range. For instance, a 242 m² condo in Titanium is priced at $579,000, while a 406-meter apartment in the Upper East Tower is listed for $1.45 million. These examples align with the $2,800 to $3,200 per square meter range, showcasing how properties are valued in this sought-after district.
Such pricing reflects the desirability of Costa del Este, where the combination of limited supply and high demand continues to shape the market. The area's appeal is not just in its ocean views but also in its modern infrastructure and proximity to the city center.
Investors and potential homeowners are drawn to Costa del Este for its blend of luxury and convenience, making it a prime location for real estate investment. The district's ongoing development and reputation for quality living further bolster its market position.
Sources: Punta Pacifica Realty, Panama Equity Real Estate
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.
3) Around 30% of Panama City's homes were constructed in the past decade
Panama City has seen a 55% expansion in its urban area from 2000 to 2020, thanks to a boom in skyscrapers and high-rise buildings.
This rapid growth was driven by construction incentives and minimal urban planning, drawing more people to the city and creating infrastructure challenges. The skyline is now dotted with modern structures, a testament to the city's evolving landscape.
In 2020, the value of residential projects in Panama City took a hit, dropping by 28.6% compared to the previous year. However, this dip doesn't overshadow the significant construction activity over the past two decades, which has led to a substantial number of new homes.
About 30% of residential properties in Panama City were built in the last decade, reflecting the city's ongoing development. This surge in construction aligns with the broader trend of urban expansion and modernization.
Economic and political shifts, like the removal of building height limits and the introduction of preferential interest laws, have been pivotal in boosting real estate development since the 1990s. These changes have fueled a sustained increase in construction activity, especially in the 2000s and 2010s.
Panama City's real estate landscape has been shaped by these factors, making it a dynamic market for potential buyers. The city's transformation is evident in its modern infrastructure and the growing number of residential properties.
Sources: Latinoamerica21, Global Property Guide
4) About 35% of residential properties in Panama City are bought with cash
In Panama City, about 35% of residential properties are bought with cash.
This trend is largely driven by foreign buyers who prefer all-cash deals. Many are looking for stable investments due to political uncertainty in countries like the United States and Canada. Panama's economy offers the stability they seek, making it an attractive option.
European buyers are also contributing to this trend. Concerns about regional security have led them to favor cash purchases in Panama, where they feel their investments are safer.
The weakening dollar has further influenced this market. For foreign investors, Panama becomes more appealing as they can stretch their purchasing power further, making cash transactions even more enticing.
These factors create a perfect storm for cash transactions in Panama City's real estate market. The combination of political and economic elements makes it a hotspot for those looking to invest securely.
With these dynamics at play, it's no wonder that cash purchases are a significant part of the market, reflecting the confidence of international buyers in Panama's stability.
Sources: Panama Equity, Bankrate, Mashvisor
5) About 55% of residential property buyers in Panama City use mortgage financing
In Panama City, approximately 55% of residential property buyers use mortgage financing.
During 2023 and 2024, mortgage rates in Panama remained steady, with lending rates hovering around 6.25% by the end of 2024. This stability provided a predictable financial landscape for potential buyers, making it easier to plan and consider mortgage options.
The real estate market in Panama City was bustling, characterized as a seller's market. Although housing supply was on the rise, it remained limited, prompting buyers to act swiftly. Many opted for mortgage financing to manage costs effectively in this competitive environment.
Panamanian banks offered a variety of mortgage options, including competitive rates tailored for full-time residents. These attractive mortgage choices appealed to many buyers, particularly those interested in purchasing residential properties.
With the market dynamics in play, buyers found that securing a mortgage was a practical approach to acquiring property. The combination of stable rates and limited housing supply made mortgages a popular choice.
Sources: CEIC Data, Bankrate, Premier Casa
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6) About 35% of homes in Panama City are in gated communities
In Panama City, around 35% of residential properties are within gated communities.
With crime rates rising, safety has become a top priority for many residents. This concern has led to a growing interest in gated communities, which promise a secure and peaceful living environment.
Surveys reveal that over half of the city's residents feel unsafe, pushing them to seek homes that offer better security. Gated communities have become the go-to choice, highlighting their robust security features to attract buyers.
Property values in these communities are climbing. For instance, condos in upscale buildings have seen significant price hikes, underscoring the allure of secure living. Developers are responding by building more gated communities, emphasizing security in their marketing strategies.
These communities not only offer safety but also a sense of exclusivity and comfort. Buyers are drawn to the added amenities and peace of mind that come with living in a gated environment.
As the demand for secure living spaces grows, developers continue to innovate and expand their offerings, ensuring that gated communities remain a popular choice for homebuyers.
Sources: ReloFirm, Panacrypto, Panama Sovereign
7) Between 15% and 20% of residential properties in Panama City are currently vacant
In Panama City, 15% to 20% of residential properties were vacant during 2021 and 2022.
This high vacancy rate was mainly due to the economic impact of the COVID-19 pandemic, which initially hit the real estate market hard. As restrictions eased and the economy started bouncing back, rental demand began to rise, especially in prime areas.
The arrival of large multinational companies played a significant role in this recovery, creating a more favorable environment for property owners and investors. This influx of businesses helped stabilize the market, making it more attractive for potential buyers.
Consequently, vacancy rates have dropped significantly, with some buildings reporting vacancy rates as low as 5%. This shift indicates a healthier market, where rental bargains are becoming scarce, and rents are climbing back to pre-crisis levels.
For those considering buying property in Panama City, it's essential to understand that the market is evolving. The current trend shows a decrease in available rental properties, which could influence purchasing decisions.
As the city continues to attract international businesses, the real estate landscape is likely to remain dynamic, offering both challenges and opportunities for investors. Understanding these market shifts can help in making informed decisions.
Source: Frapan Invest
8) The inventory of 1-bedroom homes in Panama City rose to 221 in November 2024
The inventory of 1-bedroom homes in Panama City increased to 221 homes in November 2024.
While the overall number of homes for sale in the city decreased by 3.9% from October to November 2024, 1-bedroom homes bucked the trend. Specifically, their numbers rose by 5.7%, climbing from 209 in October to 221 in November. This is quite different from other home types, like 2-bedroom and larger homes, which all saw a drop in availability.
This shift hints at changing dynamics in the housing market. Perhaps there's a growing demand for smaller living spaces, or maybe more 1-bedroom homes are being listed for sale. It's a curious development, especially when larger homes are becoming less available.
For potential buyers, this could mean a unique opportunity. If you're considering a move to Panama City, the increase in 1-bedroom homes might offer more choices and possibly better deals. It's worth exploring why these homes are suddenly more available.
Understanding these trends can be crucial for making informed decisions. Whether it's a change in lifestyle preferences or economic factors, the rise in 1-bedroom homes is a notable shift. Keep an eye on how this might affect prices and availability in the coming months.
Sources: Rocket Homes, Rocket Homes
We have made this infographic to give you a quick and clear snapshot of the property market in Panama. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Panama City has a population density of about 3,203 people per square kilometer
Panama City boasts a population density of about 3,203 people per square kilometer.
This figure includes both the bustling city center and its surrounding suburbs, offering a comprehensive view of the urban spread. The density calculation covers the entire urban agglomeration, not just the core city.
When you compare it to the rest of Panama, Panama City stands out with a much higher population density. This is no surprise, given its prime location near the Panama Canal, which makes it a hub for commerce and finance.
Living in Panama City means being part of a vibrant community where business and culture thrive. The city's strategic position has attracted a diverse population, contributing to its dynamic atmosphere.
For those considering a move, the city's density reflects its status as a key economic center in the region. The bustling environment offers numerous opportunities for work and leisure.
Whether you're drawn by the economic prospects or the lively urban life, Panama City offers a unique blend of both, making it a compelling choice for potential residents.
Source: World Population Review
10) Around 15% of homes in Panama City have backup generators
In 2023 and 2024, Panama City struggled with energy reliability, a common issue in many urban areas.
While Panama's energy matrix was shifting towards renewables like hydropower, wind, and solar, this transition didn't ensure backup power for all homes. Many residents found themselves in the dark during outages, highlighting the need for reliable solutions.
Having a residential backup generator offers several benefits. It ensures your lights stay on during outages, keeps security systems running, and can even save money during construction. However, only about 15% of residential properties in Panama City have backup generators, leaving many without this safety net.
Despite the push for renewables, Panama still relies heavily on fossil fuels for its main energy supply. This dependency underscores the importance of having backup power options, especially as the country navigates its energy transition.
For those considering property in Panama City, understanding the energy landscape is crucial. Backup generators are becoming more common as residents seek to mitigate the impact of power outages.
As the energy infrastructure evolves, the demand for reliable backup solutions grows. Investing in a generator could be a wise decision for homeowners looking to ensure uninterrupted power.
Sources: Benefits of Residential Backup Generators, Panama's Energy Matrix and Renewable Energy, Panama City Generator Services
11) About 40% of homes in Panama City feature ocean or bay views
Panama City is a prime location for real estate, thanks to its stunning coastline.
With its unique geography, around 40% of residential properties in Panama City offer ocean or bay views. This is a significant feature in the city's real estate market, making it a sought-after destination for homebuyers. Properties like the Grand Bay Tower and Destiny Ocean Front condos, highlighted in 2023 and 2024 listings by Premier Casa, exemplify this trend.
The allure of ocean views is not just about aesthetics; it's also about investment potential. Panama City is a hotspot for tourists and investors, which drives up the demand for properties with ocean or bay views. This demand makes such properties more desirable and prevalent in the market.
For those considering buying property here, it's important to note that the market is influenced by the city's popularity as a tourist destination. This means that properties with ocean views are not only beautiful but also a smart investment choice.
In addition to the natural beauty, the city's real estate market is shaped by its status as a global investment hub. This makes properties with ocean or bay views a common and attractive feature for potential buyers.
Whether you're looking for a vacation home or a long-term investment, the prevalence of ocean views in Panama City properties is a major selling point. This trend is supported by various real estate listings and market analyses.
Sources: Premier Casa, 7th Heaven Properties, Central America Second Homes
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12) New residential construction in Panama City is growing by 8% to 10% annually
Panama City is buzzing with growth and opportunity.
Over the past five years, the city's population has increased by 3%, while the GDP per capita has seen a rise of 3.1%. This surge is fueled by foreign investments and ongoing economic development, making Panama City a hotspot for potential property buyers.
Infrastructure is booming, with major projects like the Panama Canal expansion and new metro lines enhancing the city's appeal. These developments are crucial for supporting both economic and real estate growth, making the city more attractive to residents and investors alike.
The real estate market here is thriving, with a strong demand for residential units. Despite global economic challenges, Panama City is projected to maintain a robust economic growth rate of 6% in 2023. This stability indicates a healthy appetite for new housing, making it an exciting time for property investment.
Rapid urban development does bring challenges, but the city is tackling these through initiatives like the Partial Plan of Spatial Planning of the San Francisco sub-district. This plan focuses on integrating private development with socio-economic and environmental sustainability, aiming to improve residents' quality of life.
Notably, the construction of new residential units in Panama City is growing at a rate of 8% to 10% annually, reflecting the city's dynamic real estate market. This growth is a testament to the city's resilience and its ability to attract both local and international investors.
Sources: Benoit Properties, Latam News, IDOM
13) In November 2024, 120 homes in Panama City sold below asking price
In November 2024, 120 homes in Panama City were sold under asking price.
This was part of a larger trend, with 166 homes either sold or pending sale during that month. Of these, a notable 72.3% were sold for less than their listed price, indicating a shift in the market dynamics. This means that a significant majority of the homes sold were not able to meet their initial asking prices.
Interestingly, only 20% of the homes sold at their asking price, showing that sellers had to adjust their expectations. Meanwhile, a mere 8% managed to sell for more than the asking price, highlighting the rarity of such deals in that period.
These numbers suggest that buyers had more negotiating power, possibly due to a decrease in demand or an increase in housing supply. The market conditions seemed to favor those looking to purchase, as sellers were more willing to compromise on price.
For potential buyers, this could mean an opportunity to find a good deal, as the market appears to be in their favor. Understanding these trends can help in making informed decisions when considering a property purchase in Panama City.
Source: Rocket Homes
14) Monthly condo maintenance fees in Panama City range from $1.50 to $2.50 per square meter
In Panama City, condo maintenance fees average between $1.50 and $2.50 per square meter.
These fees cover essential services like water, gas, and 24-hour security, ensuring a comfortable living environment. Depending on the building, costs might also include insurance for common areas and cleaning of shared spaces. Some buildings offer enhanced security or extra amenities, which can bump up the fees.
The size of your condo matters too. Larger condos often mean higher maintenance costs because they contribute more to shared expenses. This also gives them a bigger say in the homeowners' association decisions.
For example, a condo with a pool or gym might have higher fees due to the upkeep of these facilities. Meanwhile, a smaller building with fewer amenities might keep costs on the lower end of the spectrum.
It's crucial to consider these factors when budgeting for a property in Panama City. Understanding what your fees cover can help you make an informed decision and avoid surprises.
Ultimately, the specific services and amenities offered by a building will determine where your fees fall within the average range.
Sources: Punta Pacifica Realty, Easy Land Panamá
We made this infographic to show you how property prices in Panama compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Property purchase transactions in Panama City typically take 45 to 60 days to complete
Buying a property in Panama City typically takes 45 to 60 days.
This timeline is influenced by the negotiation process, which can vary based on the deal's complexity and the parties involved. If both sides are quick to agree, things move faster, but any back-and-forth can stretch the timeline.
Another factor is Panama's public registry system. This system records property transactions, and any hiccups here can delay the process. If the registry is running smoothly, you're in luck, but any inefficiencies can add days to your wait.
Paperwork is another piece of the puzzle. The status of the documents and the transfer process can either speed things up or slow them down. If everything is in order, the transaction can proceed swiftly, but missing or incorrect paperwork can cause delays.
Sometimes, transactions wrap up faster, but other times, they drag on. Issues with documentation or finalizing details can extend the timeline. It's not uncommon for parties to need extra time to iron out the specifics.
These factors all contribute to the typical 45 to 60-day range for completing a property purchase in Panama City. The process can be quicker or slower, depending on how these elements play out.
Sources: ReloFirm, Central America Second Homes, Casa Solution
16) Residential properties in Panama City offer an average annual ROI of 7% to 9%
The average annual return on investment for residential properties in Panama City is between 7% and 9%.
In neighborhoods like Punta Pacifica and Costa del Este, luxury condos often achieve these returns due to stable rental income. These areas attract business professionals and expatriates, ensuring a steady demand for rentals.
Panama's growing economy and stable dollarized currency make it appealing for foreign investors. The country's reputation as a retirement and tourist hub supports consistent rental demand, maintaining these ROI levels.
Even with economic changes in 2023 and 2024, these factors have continued to bolster the real estate market. Luxury apartments might have slightly lower ROI due to higher purchase prices, but they still offer long-term rental income potential.
Seasonal fluctuations also play a role, with beachfront properties experiencing higher demand during peak tourist seasons, sometimes pushing ROI to 10%.
Source: Panama Realty Zone
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.