Are Panama property prices going up in 2025?

Last updated on June 17, 2025

Authored by the expert who managed and guided the team behind the Panama Property Pack

Everything you need to know before buying real estate is included in our Panama Property Pack

As of June 2025, Panama's residential property market presents a complex picture: while prices have risen 59.83% over the past five years, the market has shifted to favor buyers with discounts of 10-25% on list prices due to oversupply in certain segments.

Panama City properties average $337,645 as of mid-2025, with mid-range apartments experiencing the sharpest price increases due to vacancy rates below 2%. The completion of Metro Line 3 and other infrastructure projects is creating new hotspots for price growth, particularly in previously undervalued neighborhoods.

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.

Quick Summary:

Panama property prices have increased 59.83% from 2020-2025, with Panama City averaging $337,645 per home, though current oversupply has created a buyer's market with significant negotiating power.

Mid-range apartments in central Panama City are seeing the strongest growth with under 2% vacancy rates, while beach areas and neighborhoods near new Metro lines are emerging as the next growth hotspots.

Market Indicator	Current Status (June 2025)	Trend
Average Home Value (Panama City)	$337,645	Up 59.83% (5 years)
Market Conditions	Buyer's Market	10-25% discounts available
Mortgage Rates (Foreigners)	7-9%	Elevated from historical averages
Foreign Buyer Growth	+25% projected by end-2025	Increasing demand
Rental Price Growth	+28% (2019-2023)	Outpacing wage growth
Inflation Rate	-0.2% (January 2025)	Price stability
New Inventory	16,519 units	Oversupply in mid/high-end

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.

Who is the author of this content?

THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Panama. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At THE LATINVESTOR, we explore the Panamanian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Panama City, Boquete, and Coronado. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How much have Panama property prices increased in the last 5 years?

Panama's residential property prices have surged 59.83% nationwide over the past five years from 2020 to 2025.

This substantial growth represents one of the strongest performances in Central America's real estate markets. Panama City has led this surge, with average home values reaching $337,645 by March 2025, while the national residential real estate market has grown to US$248.34 billion in total value.

The price growth has been even more dramatic over the longer term. Looking back a full decade from 2015 to 2025, Panama's property prices have increased by 122.85%, meaning values have more than doubled. This exceptional performance reflects Panama's emergence as a major financial hub and retirement destination in Latin America.

Foreign buyer demand has been a crucial driver of these price increases. In 2023 alone, demand from international buyers jumped 20.7%, and the number of foreign buyers is projected to increase by 25% by the end of 2025. This influx is particularly concentrated in Panama City's central neighborhoods and popular expat destinations like Boquete.

However, it's important to note that as we reach mid-2025, the rapid price growth has started to moderate due to increased inventory and higher mortgage rates, creating more balanced market conditions.

Where did property prices increase the most in Panama?

Panama City's central neighborhoods near new business hubs are experiencing the sharpest price increases in the country as of June 2025.

Mid-range apartments in these areas are seeing exceptional growth due to severe supply constraints. With vacancy rates below 2% in central Panama City, bidding wars have become common, driving prices significantly higher than in other parts of the country. Young professionals and expatriates are competing fiercely for limited inventory in these prime locations.

Costa del Este and Panama Pacifico neighborhoods are emerging as new hotspots for price appreciation. These areas are benefiting directly from the Metro Line 3 completion in mid-2025 and major highway expansions. Properties near these new transport links are commanding premium prices as improved connectivity makes previously less accessible areas highly desirable.

Rental prices in Panama City have surged even more dramatically than purchase prices, increasing 28% from 2019 to 2023. This rental growth has outpaced wage increases, making central city apartments increasingly valuable as investment properties. The combination of low vacancy and high rental demand creates a compelling case for continued price appreciation in these urban cores.

It's something we explore in detail in our Panama property pack.

What are the current mortgage rates for foreigners in Panama?

Mortgage rates for foreign buyers in Panama currently range from 7% to 9% as of June 2025.

These rates represent a significant increase from historical averages and are contributing to the current buyer's market conditions. Local banks have tightened their lending criteria, making it more challenging for both locals and foreigners to secure financing. This has shifted market dynamics to favor cash buyers and well-qualified foreign investors who can navigate the stricter requirements.

The elevated interest rates are having a measurable impact on buyer behavior. Many potential purchasers are adopting a wait-and-see approach, hoping rates will decrease following the 2025 general elections. This hesitation has extended listing times and increased negotiating power for buyers willing to move forward despite higher borrowing costs.

Foreign buyers should expect to provide substantial documentation and meet higher down payment requirements compared to previous years. Banks are particularly cautious with international borrowers, often requiring 30-40% down payments and extensive proof of income from foreign sources.

Despite these challenges, Panama's stable banking system and dollarized economy continue to make it one of the more accessible Latin American markets for foreign property financing.

Which property types are seeing the biggest surge in prices in Panama?

Property Type	Price Performance	Key Drivers
Mid-range Apartments (Panama City)	Sharpest increases, <2% vacancy	Young professionals, expat demand, central location
1-2 Bedroom Units (Boquete)	Strong growth, $88-129 daily rates	Retiree demand, vacation rental market
Properties near Metro Line 3	Rapid appreciation starting 2025	Infrastructure completion, improved connectivity
Beach Properties (Coronado)	Tightening inventory, rising prices	Limited coastal development, lifestyle buyers
Affordable Homes (<$120,000)	Expected surge from 2026	New government interest subsidies
Luxury Condos	Oversupply, 10-25% discounts	Market saturation, higher interest rates
Single-Family Homes	Moderate growth	Family demand, less speculation

What impact are foreign investors having on Panama's property market in 2025?

Foreign investors are fundamentally reshaping Panama's property market, with their numbers projected to increase by 25% by the end of 2025.

The Pensionado Visa program and Panama's favorable tax incentives continue to attract wealthy retirees and investors from North America and Europe. These buyers are particularly concentrated in Panama City's upscale neighborhoods, beach communities, and highland areas like Boquete. Their purchasing power, often involving cash transactions, gives them significant advantages in the current high-interest-rate environment.

This foreign influx is creating distinct market segments. In popular expat areas, prices are rising faster than the national average, and properties are often marketed primarily to international buyers. The demand has been so strong that some neighborhoods have seen their character transform entirely, with English becoming as common as Spanish in certain areas.

However, this foreign investment wave is also contributing to the current oversupply in luxury segments. Many developers built high-end projects anticipating continued foreign demand, but the combination of higher interest rates and political uncertainty has slowed absorption rates, creating opportunities for buyers willing to negotiate.

The comprehensive data on foreign investment patterns is detailed in our Panama property pack.

Get fresh and reliable information about the market in Panama

Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.

How is Panama's property market performing compared to other Central American countries?

Panama's residential property market stands as the most expensive and developed in Central America as of mid-2025.

With average Panama City home values at $337,645, Panama's prices significantly exceed those in neighboring countries. The nation's property market forms a substantial portion of Central America's US$1.36 trillion residential real estate sector, reflecting its status as the region's financial and logistics hub.

Panama's 59.83% price increase over five years outpaces most regional competitors, with only Costa Rica's prime locations approaching similar values. The stability of Panama's dollarized economy, combined with its international banking sector and strategic canal location, creates a premium that investors are willing to pay compared to markets in Nicaragua, Honduras, or El Salvador.

The sophistication of Panama's market is evident in its diverse offerings, from luxury high-rises to affordable housing programs. While other Central American countries struggle with limited financing options, Panama offers mortgage products to foreigners and maintains a liquid property market with established legal frameworks protecting international buyers.

This regional leadership position attracts both investors seeking stability and lifestyle buyers who value Panama's infrastructure advantages over its neighbors.

What are the property price forecasts for Panama in 2026?

Property prices in Panama are expected to experience moderate but steady growth in 2026, driven by infrastructure completion and new government housing initiatives.

The full impact of Metro Line 3, which reached completion in mid-2025, will materialize in 2026 as businesses and residents adjust to improved connectivity. Properties along the new metro route and in adjacent neighborhoods are forecast to appreciate 10-15% as commuting patterns stabilize and commercial development follows residential demand.

A major catalyst for 2026 will be the new preferential interest scheme for homes under $120,000, taking effect in January. This government program is expected to unlock pent-up demand in the affordable housing segment, potentially driving prices up 5-8% in qualifying communities as first-time buyers enter the market with subsidized financing.

Post-election clarity should also boost market confidence. With political uncertainty resolved after the 2025 general elections, both local and foreign investors are expected to return to the market more aggressively. Analysts predict this could reduce the current inventory overhang by 30-40% by mid-2026.

Overall, most experts project Panama City property values to increase 8-12% in 2026, with stronger growth in emerging neighborhoods and more modest appreciation in already-expensive areas.

How are infrastructure projects affecting Panama property values in 2025?

Major infrastructure developments are creating new real estate hotspots throughout Panama, with Metro Line 3's mid-2025 completion leading the transformation.

Properties within walking distance of new Metro stations are commanding premiums of 15-20% compared to similar properties farther away. Neighborhoods like Costa del Este and Panama Pacifico, previously considered suburban, are now attracting urban professionals who can commute to the city center in under 30 minutes. This accessibility shift is compressing the traditional price gap between central and peripheral areas.

Highway expansion projects are having similar effects on property values. The improved road networks are opening up previously isolated communities, making them viable for both residential development and investment. Beach communities within a 90-minute drive of Panama City are seeing renewed interest as weekend homes become more practical with better roads.

The multiplier effect of infrastructure on property values extends beyond immediate proximity. Commercial developments follow residential growth, creating employment centers that further boost local property demand. Areas near infrastructure projects are seeing land values increase 30-50% even before construction begins, as speculators anticipate future development.

This infrastructure-driven appreciation pattern is thoroughly analyzed in our Panama property pack.

infographics comparison property prices Panama

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.

What's the current state of Panama's rental market in June 2025?

Panama's rental market is experiencing intense pressure with prices having surged 28% from 2019 to 2023, significantly outpacing wage growth.

Mid-range apartments in Panama City are particularly tight, with vacancy rates below 2% driving fierce competition among renters. This scarcity has created bidding wars for desirable units, pushing rents even higher than asking prices in prime neighborhoods. Young professionals and expatriates are struggling to find affordable options in central areas where they work.

The rental yield for property investors remains attractive despite high purchase prices. In Boquete, vacation rental properties generate average monthly revenues of $918, with daily rates ranging from $88 to $129 depending on seasonality. These returns are drawing more investors to convert properties into short-term rentals, further reducing long-term rental inventory.

The mismatch between rental price growth and local salaries is creating social tensions and pushing middle-income residents to outer neighborhoods. This displacement is gradually changing the demographic makeup of central Panama City, with service workers facing commutes of over an hour to afford housing.

Looking ahead, rental prices are expected to continue rising unless significant new supply enters the market, making rental properties increasingly attractive as investments.

How is political uncertainty affecting Panama's property market in 2025?

The upcoming 2025 general elections are creating a noticeable hesitation among property buyers, particularly in the luxury segment.

High-end property listings are staying on the market 40-60% longer than in 2024, as wealthy buyers adopt a wait-and-see approach. This uncertainty has shifted negotiating power dramatically, with sellers accepting discounts of 10-25% off list prices to close deals before potential policy changes. The buyer's market conditions are most pronounced in properties above $500,000.

Foreign investors are particularly sensitive to election outcomes, concerned about potential changes to visa programs, tax incentives, or property ownership rules. Some international buyers are delaying purchases until after the election results, creating a temporary slowdown in foreign investment despite the projected 25% growth in foreign buyers for 2025.

However, Panama's strong economic fundamentals and infrastructure investments are providing a buffer against political concerns. The dollarized economy and established banking system continue to inspire confidence, preventing the kind of capital flight seen in other Latin American countries during election cycles.

Most analysts expect a post-election rebound regardless of the outcome, as pent-up demand returns to the market once policy directions become clear.

What opportunities exist in Panama's current buyer's market?

Luxury condo negotiations: With 16,519 new units creating oversupply, buyers can negotiate 10-25% discounts on high-end properties, particularly in buildings with high vacancy rates.
Pre-construction advantages: Developers facing slower sales are offering enhanced incentives including furniture packages, closing cost coverage, and extended payment plans to move inventory.
Beach property potential: Coronado and other coastal areas are seeing tightening inventory, making current listings attractive before prices rise further with improved infrastructure.
Metro-adjacent investments: Properties near newly opened Metro Line 3 stations offer immediate appreciation potential as neighborhoods adapt to improved connectivity.
Rental conversion opportunities: With rental vacancy below 2% in prime areas, converting purchased units to rentals can generate immediate positive cash flow.
Distressed sales: Some overleveraged investors from the 2020-2023 boom are selling at losses, creating below-market opportunities for cash buyers.
Future affordable housing zones: Areas qualifying for the 2026 interest subsidy program offer speculation potential before the program launches.

What are the long-term prospects for Panama property investment?

Panama's property market shows strong fundamentals for long-term appreciation over the next 10-20 years.

The country's strategic advantages remain compelling: a dollarized economy providing stability, the Panama Canal generating consistent revenue, and favorable tax policies attracting international wealth. These structural factors have historically supported property values through various economic cycles and are unlikely to change significantly.

Demographic trends favor continued growth, with Panama's popularity as a retirement destination expected to intensify as North American baby boomers seek affordable tropical lifestyles. The successful Pensionado Visa program and established expat communities create a self-reinforcing cycle attracting more foreign buyers annually.

Infrastructure investments beyond 2025 will further enhance property values. Planned expansions of the metro system, new highways, and airport improvements will open additional areas for development while increasing existing property values. The government's commitment to positioning Panama as Central America's business hub ensures continued infrastructure spending.

Climate change considerations also favor Panama, as the country sits outside the hurricane belt and has relatively stable weather patterns. This environmental advantage may become increasingly valuable as climate risks affect other tropical retirement destinations.

Analysts project annual appreciation of 5-8% over the next decade, with periodic corrections providing entry opportunities for long-term investors.

Conclusion

Yes, Panama property prices are going up, with residential values increasing 59.83% over the past five years and 122.85% over the past decade. Despite current buyer's market conditions offering 10-25% discounts due to oversupply in luxury segments, the fundamental growth trajectory remains intact.

The combination of infrastructure improvements, continued foreign investment, and Panama's strategic advantages as a financial hub and retirement destination support ongoing price appreciation. While 2025's political uncertainty and higher interest rates have created temporary headwinds, long-term prospects remain strong with forecasts of 8-12% growth in 2026 and steady appreciation thereafter.