Is the property market in Panama still growing?

What do the latest sales, price and rent numbers say?

They say Panama is moving again, but not in every direction at once. Rents are clearly up. Sales have bounced back from a terrible 2025 in some datasets. Closed sale prices are flat.

Start with sales. A 4S Real Estate study reported by La Prensa counted 2,866 new-home sales in 2025, down 39.5% from 4,737 in 2024. Then 1,292 homes sold in the first quarter of 2026 alone. Don't multiply one quarter by four, but that pace shows buyers came back.

Not every count agrees. ACOBIR and INDESA, using a wider base, put residential sales value at $695 million in the first half of 2026, down 13% from a year earlier. So "sales are booming" is wrong; "sales stopped falling in the new-build segment" is closer.

Prices are the weak point of the growth story. ACOBIR's MLS put the average closed apartment price in Panama City at $1,726 per m² in the first half of 2026, against $1,756 a year earlier, a 1.7% drop. Asking prices are higher, and new-build prices are rising, but those are what sellers want, not what buyers paid.

Rents are the easy part. Apartment leases signed through ACOBIR's MLS averaged $12.57 per m² a month in the first half of 2026, up 8.9%. Encuentra24 asking rents reached $14.70 per m² in June 2026, up 13.5%.

Credit still lags. New mortgages from January to August 2026 were down 13%. Put together, Panama looks like a market that has restarted, with rising rents and flat prices, rather than one that is growing across the board.

Indicator	Earlier level	Latest reading	Change	What it shows
New-home sales (4S)	4,737 in 2024	2,866 in 2025	-39.5%	2025 was extremely weak
Q1 new-home sales (4S)	—	1,292 in Q1 2026	45% of 2025 in 3 months	New-build buyers came back
Residential sales value (ACOBIR/INDESA)	H1 2025	$695M, H1 2026	-13%	The wider market is still cooling
Closed apartment price, Panama City (MLS)	$1,756/m², H1 2025	$1,726/m², H1 2026	-1.7%	Sale prices are flat
Signed apartment rent, Panama City (MLS)	$11.54/m², H1 2025	$12.57/m², H1 2026	+8.9%	Rental demand is strong
New mortgage lending	Jan-Aug 2025	$981M, Jan-Aug 2026	-13%	Credit still lags

Why did Panama home sales fall so badly before recovering?

Because mortgage rules, housing subsidies and buyer confidence all got messy at the same time, and the quick rebound in new-build sales suggests part of the slump was temporary.

Convivienda, the developers' association, reported 6,126 homes sold in 2024 and only 4,020 in 2025, a 34% drop. The separate 4S Real Estate dataset showed its tracked new-home market falling from 4,737 units in 2024 to 2,866 in 2025. The two samples are different, so don't mix them, but both point the same way.

Several policy changes landed during that downturn. The $10,000 Fondo Solidario housing subsidy ended, and nobody knew for months what would replace the preferential-mortgage system. Buyers who depended on subsidized financing had good reasons to wait, and developers didn't know what their customers could finance.

That explains why the rebound came fast once the rules were set. The new preferential regime took effect on January 1, 2026, and the 1,292 sales recorded in the first quarter of 2026 equal about 45% of the entire 2025 total in three months. Convivienda expects 5,530 sales in 2026, a forecast, not a result.

So we treat 2025 as a disrupted year rather than a clean read of demand. The recovery in new-build sales is real, but comparing anything with such a weak base makes the growth rate look bigger than it is.

Are property prices in Panama actually going up?

New-build asking prices are. Closed sale prices aren't, at least not on average. That difference is the most important thing to understand before you buy.

Start with what buyers actually paid. ACOBIR's MLS put the average closed resale apartment in Panama City at $1,726 per m² in the first half of 2026, down 1.7% from $1,756 a year earlier and up 6.2% from $1,625 five years earlier. With inflation at 2.8% over the 12 months to September 2026, that's a drop of about 4.4% in real terms.

Asking prices look much better. PanamaProp's October 4, 2026 asking medians run from about $1,920 per m² in San Francisco and $1,978 in El Cangrejo to $2,521 in Punta Pacífica, $2,750 in Costa del Este and $3,481 in Marbella. Panama Equity's Q1 2026 report had new-build prices up more than 15% over 12 months. An older survey by Universidad Torcuato Di Tella and Zonaprop had the average Panama City asking price at $1,881 per m² in September 2025, up 6.81%.

Closings by district are messier, and the district samples are small. Juan Díaz rose from $2,110 per m² in the first half of 2025 to $2,587 in the first half of 2026, while Bella Vista fell from $1,687 to $1,405 (-16.7%, a small sample). Read those as signals, not trends.

New developments pull averages up because they cost much more than existing stock. Panama Equity estimated early-2026 resale versus preconstruction prices at roughly $2,500 versus $3,800 per m² in Costa del Este, $2,200 versus $4,300 in Punta Pacífica and $1,900 versus $3,500 in San Francisco. Its July 2026 update calls the market "K-shaped": newer, well-equipped buildings are gaining, older resales are mostly flat.

So don't assume every Panama City owner has gained 10% or 15%. Use closed prices, not listings, to judge what a unit is worth.

Panama City area	Median asking price (PanamaProp, Oct. 4, 2026)	What we see
San Francisco	$1,920/m²	Cheapest of the central districts
El Cangrejo	$1,978/m²	Central, older stock
Obarrio	$2,026/m²	Business core
Punta Paitilla	$2,149/m²	Older waterfront towers
Punta Pacífica	$2,521/m²	Premium towers
Costa del Este	$2,750/m²	Corporate district
Marbella	$3,481/m²	Most expensive per m²

Is Panama City where most of the property growth is happening?

Yes. Panama City drives most of the activity, especially modern apartment districts where rents, foreign demand and shrinking supply meet.

The price gaps are too big to talk about Panama as one market. According to the 4S Real Estate study, new-build apartment prices ranged from about $2,045 per m² in Pedregal to $4,626 in Santa Ana/Casco Antiguo. Bella Vista was around $3,782, Juan Díaz around $3,723 and San Francisco around $3,673. Houses were generally much closer to $850-$1,200 per m².

Juan Díaz has the clearest run of good numbers on ACOBIR's MLS: resale closings went from about $2,110 per m² in the first half of 2025 to $2,587 in the first half of 2026 (a small sample), and signed rents averaged $14.17 per m², the highest in ACOBIR's district table.

Costa del Este has a different mix: large modern apartments, multinational companies, foreign families and a deep rental market. Santa María is smaller and more expensive, held up by scarcity and wealthy buyers.

Outside those districts, things are much more mixed. A family buying a $100,000 house in Panamá Oeste depends far more on local income and bank financing than someone buying a $700,000 apartment in Santa María.

That gap between buyers explains most of the confusion about whether Panama's market is "growing".

Are rents still rising in Panama City?

Yes, fast. Rents are the strongest evidence behind the recovery.

Apartment leases signed through ACOBIR's MLS averaged $12.57 per m² a month in the first half of 2026, up from $11.54 a year earlier, an 8.9% rise. By district, Juan Díaz was at $14.17, San Francisco at $12.73 and Bella Vista at $12.18.

Asking rents are higher. Global Property Guide's analysis of Encuentra24 listings put average apartment asking rent at about $14.70 per m² in June 2026, 13.5% above a year earlier. House rents rose 13.2% to around $9.12 per m². A September 2026 snapshot by Brax and Nexo Living found $15.56 per m² across 9,953 active listings, a different sample, so not a growth rate.

What does that mean for a landlord? Nexo ran the numbers on ACOBIR's first-half 2026 data for a typical 100 m² apartment: about 8.7% gross, about 4.1% net with a property manager and tenant turnover, and 5.2% to 6.1% if you manage it yourself. Those net figures are before income tax. Panama taxes rent earned in Panama even if you live abroad, and at 15% of net income the managed scenario drops to about 3.5%.

Global Property Guide, using asking prices and asking rents, estimated gross yields at 7.57% in Panama City in April 2026, compared with 7.83% a year earlier. Different method, same message: prices have risen enough that yields haven't expanded much.

That's the catch for investors. Rent is growing, but the gross yield is not, and the net yield after costs and tax is about half the headline.

Is luxury real estate growing faster than ordinary housing in Panama?

Yes. The upper end is in much better shape than affordable housing, because cash buyers, foreigners and wealthier households depend less on subsidized mortgages.

The split shows up in sales. ACOBIR and INDESA found that sales of homes above $120,000 fell only 6.2% in the first half of 2026, while sales of homes up to $120,000 fell 28.3%.

Registry-based analysis by Panacomps found recent Ocean House transactions in Santa María averaging roughly $3,622 per m² through early 2026, about 11.3% above the building's long-run average across 172 verified sales. At Ocean Reef, waterfront units were testing roughly $6,000-$8,000 per m².

Foreign buyers sit mostly in this part of the market. Panama uses the US dollar, and a non-resident foreigner can hold registered title in their own name, with restrictions within 10 km of the borders and on some islands. INDESA estimates foreigners made 57% of purchases above $120,000 in the first quarter of 2026, with foreign purchases worth $205 million (+17%) and US buyers alone at $33.6 million (+53%).

That 57% is not the share of all homes sold in Panama, so don't read it that way. But it lines up with where prices are highest and supply is tightest: Costa del Este, Punta Pacífica, Santa María, Avenida Balboa and Casco Viejo.

Meanwhile, mortgages for homes up to $80,000 fell 35.3% during the first four months of 2026, and lending in the $80,001-$120,000 range dropped 27.5%. Wealthier buyers are pushing ahead while many local families can't finance a purchase.

Panama property segment	What is happening now	Main buyer issue	Direction
Luxury Panama City	High prices, scarce inventory	Finding the right asset	Strong
Premium waterfront	$6,000-$8,000/m² in some projects	Very limited supply	Strong but niche
Upper-middle apartments	Better sales and rents	Value versus new-build premiums	Growing
Homes below $120k	Weak mortgage approvals	Affordability and credit	Weak
Peripheral family housing	More price-sensitive demand	Household income	Mixed

Why are Panama mortgages falling while property prices rise?

Because the buyers keeping the top of the market busy depend much less on bank credit than the families at the affordable end. And as seen above, average closed prices aren't really rising: asking prices and rents are.

From January to August 2026, banks issued about $981 million in new residential mortgages, down 13% from a year earlier, according to Superintendency of Banks data compiled by Brax. August alone was down 24%. Earlier in the year, January to May, the drop was 19.9% ($578.5 million against $722.7 million), so the fall is slowing but hasn't stopped.

Subsidized lending is where it hurts most. Preferential mortgages totaled $132 million in the first four months of 2026, down 34% from $200 million a year earlier. Regular residential mortgages fell much less, 8%, to $249 million.

Borrowing also costs more than a few years ago. The banking regulator's residential reference rate went from 5.75% in 2020-2022 to 6.50%, where it stayed in the first two quarters of 2026. That's a regulatory benchmark, not the rate a foreigner gets: Banco General's 2026 grid shows 8% plus 1% FECI for a second home, with 70% maximum loan-to-value.

Higher rates hurt most where monthly payments are already tight. Unemployment was still 8.5% in August 2026 (INEC, down from 10.4% in 2025) and informal employment 45.8%, which makes mortgage approval hard for a large share of households.

So you can have firm premium prices and weaker mortgage lending at the same time. The people buying in Santa María aren't representative of every buyer in Panama.

Is Panama’s new preferential mortgage system working yet?

Not yet. The new rules removed the uncertainty that hurt sales in 2025, but cheap mortgage lending hasn't picked up.

The revised system, in force since January 1, 2026, covers qualifying new homes worth up to $120,000 used as a main residence, with an interest subsidy of up to 4 percentage points for seven years in the $80,000-$120,000 band. It isn't open to a foreigner's investment apartment.

That matters because homes below $120,000 are a huge part of Panama's mass market. CAPAC said again during Expo Vivienda 2026 that demand was concentrated below that level, with more than 300 projects presented at the event.

Still, preferential mortgage issuance was down 34% during the first four months of 2026, and sales of homes up to $120,000 fell 28.3% in the first half. The implementing regulation was only finished in June, so the early months were never a clean test.

For now, the law is a possible recovery driver, not proof that affordable housing has recovered. The test is simple: banks need to approve more of these loans.

Is Panama building enough new homes, or is supply getting tight?

Panama built less in 2025, and available apartments are shrinking in several important Panama City districts. That's why asking prices can rise without a construction boom.

INEC recorded 377,967 m² of construction across Colón, Panamá, San Miguelito, Arraiján and La Chorrera in the fourth quarter of 2025, 16.2% below the 451,206 m² of a year earlier. Activity fell hardest in Arraiján and San Miguelito.

Bank financing points the same way. New construction lending totaled $631.5 million in the first five months of 2026, down 24.4% year over year, and La Estrella reported construction credit still falling in August.

The pipeline is starting to turn, slowly. Residential permit value rose 14.1% in the first half of 2026, according to ACOBIR and INDESA, and CAPAC counted first-quarter permit investment up 36.3% on a year earlier. But that first-quarter figure is still 44% below the first quarter of 2023, so builders are coming back from a very low point.

Meanwhile, unsold new-build stock is shrinking. Panama Equity, citing Galería Inmobiliaria, counted 15,499 available new-construction units in Panama City in May 2026, 11% fewer than a year earlier. Resale listings also fell heavily in the districts it tracks: roughly 30% on Avenida Balboa, 40% in Costa del Este, 43% in El Cangrejo and more than 50% in Santa María and Casco Viejo.

Less supply is a big part of the Panama City story. Prices for good units can hold up even if developers aren't building much more.

Supply indicator	Previous level	Latest level	Change	What it means
Q4 construction area	451,206 m²	377,967 m²	-16.2%	Less construction
New construction credit, Jan-May	About $835M	$631.5M	-24.4%	Harder project financing
Residential permit value, H1	H1 2025	H1 2026	+14.1%	Pipeline turning up from a low base
Unsold new-build units, Panama City	May 2025	15,499 (May 2026)	-11%	Developer stock is shrinking
Costa del Este resale inventory	—	-40.2% YoY	Sharp fall	Buyers have less choice
Santa María resale inventory	—	-52.4% YoY	Very sharp fall	Scarcity supports pricing

Is Panama’s economy strong enough to keep property growing?

Yes. The economy is growing fast enough to support more property demand, but many local households aren't feeling enough of it to buy a home.

Panama's real GDP grew 4.4% in 2025, according to INEC. Growth then reached 4.8% in the first quarter of 2026 and 5.5% for the first half, driven by the Canal and trade (INEC, September 2026). The World Bank expects 4.2% for the full year.

For property, that means hiring, relocations, logistics, retail spending and demand for rental housing. Panama also keeps benefiting from the Canal, banking, regional headquarters and Tocumen's role as an aviation hub.

Inflation is back, too. Consumer prices rose 2.8% over the 12 months to September 2026 (INEC), after close to zero in 2025. That pushes rents up, but it also means a flat sale price is a small loss in real terms.

The job market is weaker. Unemployment fell to 8.5% in August 2026 (INEC), from 10.4% in 2025, but 45.8% of jobs are still informal.

That gap explains the market. Growth is strong enough to fill apartments and attract higher-income buyers, while many families still can't turn their housing needs into a mortgage approval.

Is tourism becoming a real driver of Panama property demand?

Yes, for rentals and internationally oriented property. Tourism is growing fast enough to matter for the parts of the market that deal with visitors and foreign buyers.

The Panama Tourism Authority reported 1,755,998 international visitors in the first half of 2026, up 17.4% from a year earlier. Tourism income reached roughly $3.79 billion, up 14.7%.

Panama Stopover adds another clue. More than 132,000 travelers used Copa Airlines' stopover program in the first half of 2026, 38% more than a year earlier. These are people who could have stayed inside Tocumen Airport but chose to spend time in Panama.

Event tourism is growing as well. The Tourism Authority reported 74 international events in the first half of 2026, with more than 113,000 participants and almost 48,000 occupied hotel rooms.

Most of that helps hotels, but some spills into furnished apartments and short stays. Be careful there: in the district of Panamá, renting for less than 45 days without a tourist-accommodation authorization can bring fines of $5,000 to $50,000, and some buildings' condo rules (PH) ban short stays outright. Bills 301 and 713, which would tax short stays at 10% or 15%, were still bills on October 20, 2026.

Tourism gives the upper end and the rental market another source of demand while local mortgage demand stays weak.

Which part of Panama’s property market is struggling most?

Affordable, mortgage-dependent housing. It's the clearest weak spot.

The numbers are direct. Loans for homes worth up to $80,000 fell from about $97 million in the first four months of 2025 to $62.5 million in the same period of 2026, a 35.3% drop.

In the $80,001-$120,000 range, approvals dropped from $92.9 million to $67.4 million, down 27.5%. Financing between $120,000 and $150,000 fell even more, though changes to the preferential-loan bands make that segment hard to compare.

Sales confirm it. ACOBIR and INDESA found sales of homes up to $120,000 down 28.3% in the first half of 2026. These are the price brackets where local demand sits, and CAPAC's Expo Vivienda again showed buyers want homes below $120,000.

The problem isn't a lack of interest. Plenty of families want housing. The hard part is getting the monthly payment, household income and bank approval to line up.

That's one reason we don't buy the "nationwide property boom" story.

Are Panama City condo towers cutting prices?

Not with big public price cuts, but buyers are getting room to negotiate, and you should use it.

The hard numbers: in the first half of 2026, apartments sold through ACOBIR's MLS closed 6% below their asking price on average, after an average of 224 days. Average closed prices in Panama City slipped 1.7%. That's a market where sellers wait and give ground, not one where buyers fight over units.

New-build is where the gap is widest. Panama Equity's figures put preconstruction prices at about $4,300 per m² in Punta Pacífica against about $2,200 for resales, and $3,800 against $2,500 in Costa del Este. Developers with unsold units after delivery have more reason to discount than the brochure suggests, even with unsold stock down 11% to 15,499 units.

What to do: check closed prices for the building or district (ACOBIR MLS, Panacomps or a broker's registry comps), not portal asks. On an older resale, treat the 6% average discount as your starting point, not your target. On a new unit, ask for a cash discount, parking or a storage room included, or the developer paying closing costs. And on any first sale of a new home, make sure the Law 546 transfer-tax break (zero ITBI on the first $120,000, whatever the price) is applied.

Before you sign anywhere, ask the building for its "paz y salvo" (proof that condo fees are paid) and its PH rules: unpaid fees follow the unit, and some buildings ban short stays.

What changed for foreign buyers in September and October 2026?

Four things, all in the last two months.

Law 546 took effect on September 1, 2026. On the first sale of a new home, the 2% transfer tax (ITBI) is zero on the first $120,000, with reduced rates of 0.5% to 1.8% on the part between $120,000 and $200,000. Above $200,000 the normal 2% applies. That tax is normally paid by the seller, so ask how it shows up in the price.

Decree 17 of 2026 took effect on September 16. Panama's Qualified Investor residency now accepts real estate from $300,000 for the first sale of a new home and $500,000 for a resale, and you have to keep the investment. Friendly Nations, with a $200,000 property option, and Pensionado ($1,000 a month pension, or $750 with a property over $100,000 in your name) are unchanged.

On October 9, 2026, the EU took Panama off its list of non-cooperative tax jurisdictions (Annex I). It stays on Annex II, under monitoring, and it's not on the FATF grey list either. It matters most for companies and banks; for an individual buyer it may mean fewer questions from a European bank, but don't count on it.

On the same day, a magnitude 7.5-7.7 earthquake (agencies differed) struck near Tonosí, on the Azuero peninsula. Panama is outside the main hurricane belt but has moderate seismic risk. If you buy, ask for the building's structural documents and any post-quake inspection, and price in insurance.

Could Panama’s property recovery lose momentum again?

Yes. It can keep going, but weak credit and tight affordability could stop it from spreading beyond the strongest districts.

Mortgage lending is the biggest risk. If banks keep approving fewer home loans, more local buyers get priced out, and sales below $120,000 are already down 28.3%.

The second risk is jobs. Unemployment of 8.5% (August 2026) and informality of 45.8% make it hard for mass-market housing to grow as fast as GDP.

There is also a price risk in new developments. Preconstruction apartments in several Panama City districts cost far more per m² than comparable resales. With closed prices already slipping 1.7%, buyers are starting to push back on that premium.

The top end has more cushion: scarce inventory, rising rents, foreign demand (57% of purchases above $120,000) and buyers who don't need a mortgage.

So we're more confident about prime Panama City rentals and good buildings than about the national housing market as a whole.

What would make us call it a real recovery?

Three things moving together: mortgages, sales value and closed prices. Right now only rents and new-build sales counts are clearly up.

The turnaround in new-build sales is hard to ignore. After 4S's tracked sales fell 39.5% in 2025, 1,292 homes sold in the first quarter of 2026. Rents are up 8.9% on signed leases and 13.5% on asking rents. GDP grew 5.5% in the first half and visitor arrivals jumped 17.4%.

The other side is just as clear. Residential sales value fell 13% in the first half of 2026, closed apartment prices in Panama City slipped 1.7%, and new mortgages were still down 13% through August.

Our judgment: Panama is past the 2025 slump, with a rental-led recovery concentrated in Panama City. The claim that the market is "still growing" is true for rents and for good buildings in strong districts, and not true for average sale prices or affordable housing.

What to watch next: ACOBIR's second-half MLS report (closed prices and rents), the monthly Superintendency of Banks mortgage figures, and whether Law 546 lifts new-home sales below $200,000. If mortgages turn up while rents stay strong, the recovery will broaden.