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What is happening in Panama’s real estate market? Are prices on the rise or decline? Is Panama City still attracting foreign investors? How are government policies and taxes shaping the real estate landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers alike, from Panama City to Bocas del Toro and beyond. Perhaps you’re curious about these trends too.
We know this because we stay closely connected with local experts and individuals like you, exploring the Panamanian real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to ensure you feel informed and confident about the market without needing to search elsewhere. If you think we missed the mark or could improve, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll strive to enhance this content for you.
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1) Rents in central neighborhoods will rise as young professionals compete for limited properties near new business hubs
In Panama City, rental prices in central neighborhoods are climbing due to their proximity to new business hubs.
Areas like Lynn Haven and Panama City North are seeing average rents hitting $1,495 and $1,512 as of 2023. This surge is fueled by the influx of multinational companies and foreign workers who want to live close to their jobs.
The demand for housing is intense, with 21,867 units needed to accommodate the growing population and workforce. Young professionals are flocking to urban areas, pushing up the demand and, consequently, the rental prices.
However, the housing supply isn't keeping pace. In 2023, only 124 permits were issued, which falls short of meeting the demand. This limited availability is making the rental market even more competitive.
Surveys indicate that many renters prefer living near their workplaces, a trend that's expected to persist. This preference is likely to keep driving up demand in these central neighborhoods.
Rents in established central neighborhoods will likely rise as younger professionals compete for limited properties close to new business hubs.
Sources: RentCafe, PadSplit, Buildium
2) New property tax policies will encourage stable long-term ownership, resulting in more predictable price trends across market segments
In Panama, updated property tax policies are making long-term property ownership more appealing.
Back in 2017, Panama introduced a property tax law that lowered tax rates, encouraging owners to keep their properties longer. This change meant that selling quickly was less attractive, as holding onto properties became financially beneficial. Then, in 2019, another reform came along, exempting primary residences valued at $120,000 or less from real estate taxes, further motivating owners to stay put.
Many property owners in Panama are now more willing to hold onto their properties for the long haul, thanks to these favorable tax conditions. Panama's growing reputation as a retirement haven and tourist hotspot adds to this trend, with steady rental demand providing a reliable income for those who choose to keep their properties.
These tax updates have also curbed speculative buying. Investors are now more interested in long-term gains rather than quick profits. This shift is noticeable in the reduced turnover rates and increased occupancy in popular spots like Panama City and beachfront areas.
In these areas, the market is seeing more stability, with occupancy rates climbing as people choose to stay longer. This is a win-win for both property owners and renters, as it creates a more predictable and stable market environment.
Sources: ReloFirm, Panama Equity, Panama Realty Zone
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.
3) David in Chiriquí will attract attention as a cheaper option to Panama City, gently boosting its property values
David in Chiriquí is catching eyes as a budget-friendly alternative to Panama City, nudging up its home values.
One big reason is the surge in property sales in the area. Casa Solution, a top real estate agency, has been busy, handling over $79 million in property sales in Chiriquí. This shows a market that's on the rise.
Real estate in David is also more affordable. Back in August 2020, the average house price in David dropped by 15.6% to US$784 per sq. m., while Panama City saw prices climb to US$1,501 per sq. m. This price gap makes David a tempting choice for those looking to save.
Infrastructure is another draw. David is conveniently located off the Pan American Highway, making it a great spot for exploring the countryside. Plus, the Gulf of Chiriquí offers top-notch diving and charming coastal communities. These perks, along with the rise of remote work, are pulling more people to David.
With more folks working from home, living outside big cities is easier than ever. David's mix of affordability and lifestyle perks is making it a hot spot for those looking to escape the hustle and bustle of Panama City.
Sources: Global Property Guide, The Broke Backpacker, Casa Solution
4) Rental prices and yields will rise in popular urban areas due to a shortage of mid-range apartments
In Panama City, a shortage of mid-range apartments is driving rental prices up.
With a population growth rate of 1.97% in 2023 and 2024, Panama City is bustling with commerce, banking, and tourism. This surge in population has naturally increased the demand for housing, especially in the mid-range segment, which many residents prefer due to the city's vibrant culture and economic opportunities.
However, the construction of new mid-range apartments hasn't kept up with this demand. By 2025, the number of completed apartments is expected to drop by 20%, mainly because of higher interest rates and slower rent growth. This has led to a housing deficit of 140,000 units, hitting the mid- and lower-price ranges the hardest. With a population density of about 3,203 people per square kilometer, competition for available housing is fierce.
In some areas, the vacancy rate for mid-range apartments is under 2%, leading to bidding wars and pushing rental prices even higher. From 2019 to 2023, rental prices increased by 28%, outpacing wage growth. Investors are taking note, seeing the high demand for mid-range rentals as a chance for attractive yields.
Sources: Oxford Business Group, World Population Review, Buildium
5) Property management apps will streamline rentals and may boost long-term yields for tech-savvy landlords
In Panama, smartphone adoption and internet usage have skyrocketed, setting the stage for digital solutions like property management apps.
By early 2024, Panama had 5.34 million mobile connections, outnumbering its population, and internet penetration hit 78.8% with 3.54 million users. This connectivity is crucial for adopting tech solutions in property management.
The global property management software market is booming, with expectations to hit USD 9.68 billion by 2030. This surge is fueled by the need for cloud-based solutions, which are perfect for property managers working remotely, making them a hit with tech-savvy landlords.
These apps are not just about convenience; they cut costs and boost tenant satisfaction. A Buildium survey found that 91% of property managers want to grow their portfolios, using automation to expand without extra costs, showing a clear trend towards tech in property management.
Virtual tours and online leasing tools are gaining traction, offering residents more convenience and helping property managers tap into wider markets. This digital shift is likely to continue, lowering vacancy rates by making management more efficient.
As Panama's rental market is set to grow by 19.2% over the next five years, the need for streamlined management practices will likely increase, making property management apps even more essential.
Sources: DataReportal, Research and Markets, BGSF
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6) Panama's properties near co-working spaces will see increased rental demand and slightly better yields as remote workers flock to the area
Panama is becoming a hotspot for remote workers, thanks to its appealing Digital Nomad Visa.
This visa, introduced in 2023, has made it much easier for digital nomads to settle in Panama, leading to a noticeable influx of remote workers. With this increase, the demand for properties near co-working spaces has surged, as these workers seek convenient living arrangements.
Co-working spaces are popping up all over Panama, especially in bustling areas like Panama City. The Latin America coworking spaces market is on the rise, driven by the need for flexible work environments. This trend is particularly visible in Panama City, where co-working spaces are becoming a common sight.
As a result, areas like Casco Viejo and Punta Pacifica are seeing a boom in rental demand. These neighborhoods are popular for their modern amenities and proximity to co-working spaces, making them ideal for remote workers. Rental prices in these areas are climbing, reflecting the growing interest.
Real estate agencies are noticing this shift, with many reporting a significant uptick in inquiries for properties near co-working hubs. This trend is not just a passing phase; it's a response to the evolving needs of the modern workforce. Properties in these areas are becoming hot commodities, offering both convenience and a vibrant lifestyle.
For those considering a move to Panama, understanding this dynamic can be crucial. Investing in property near co-working spaces could be a smart move, given the rising demand and potential for rental income.
Sources: Mordor Intelligence, ReloFirm
7) Santiago’s economic growth will draw young families, gradually boosting home values in emerging residential areas
Santiago's steady economic growth is drawing in young families.
In 2023, Panama's economy grew by 7.3%, and while this pace might slow, it's still expected to grow by 5% nominally and 3% in real terms by 2025. This kind of stable economic environment is perfect for families seeking both opportunities and stability.
The Panama-David Train Project is a game-changer. It's set to create jobs in transportation, logistics, and infrastructure, making Santiago more appealing to young families who value convenience and job access.
Demographics back this up. With a birth rate of 13.3 per 1,000 and a fertility rate of 1.82 children per woman, Panama's population is on the rise, especially among young families. About 25.44% of the population is under 15, hinting at a growing number of families eyeing new areas like Santiago.
Young families are increasingly looking for places that offer both economic prospects and a family-friendly environment. Santiago, with its emerging residential sectors, fits the bill perfectly. The city's growth is not just about numbers; it's about creating a community where families can thrive.
As Santiago continues to develop, its appeal to young families will likely increase, gradually boosting home values in its residential areas. The combination of economic growth, infrastructure projects, and favorable demographics makes Santiago a promising choice for those looking to settle down.
Sources: Trading Economics, Wikipedia, Casa Solution, Newsroom Panama
8) Digital property registries will boost transparency, lower fraud risks, and help maintain steady property values
Panama is embracing blockchain technology in its real estate sector, following a global trend.
Countries like Sweden and Estonia have already seen success with digital property registries, which have made property transactions more transparent and less prone to fraud. In Sweden, for instance, the time to register property has been slashed from weeks to just minutes, drastically cutting down fraud opportunities. Meanwhile, in the U.S., before digital registries, up to 10% of property transactions involved fraud, but these numbers have dropped significantly with the new system.
In Estonia, a survey revealed that 80% of people feel more secure with digital registries, believing they enhance transparency and security in property deals. This boost in confidence is expected to stabilize the market, which is key for keeping property values steady and drawing in foreign investors.
Panama is on a similar path, aiming to replicate these benefits. By adopting blockchain, the country hopes to create a more reliable and efficient property market. This move is not just about technology; it's about building trust and ensuring that property transactions are as smooth and secure as possible.
For potential buyers, this means a more straightforward process with fewer risks. The transparency offered by digital registries can make purchasing property in Panama a more attractive option. As the system matures, it could lead to a more vibrant and stable real estate market.
With these advancements, Panama is positioning itself as a forward-thinking player in the global real estate market. The integration of blockchain technology is expected to bring about a new era of trust and efficiency in property transactions.
Sources: Crypto Adoption Around the World: Panama, Obtaining A Crypto License In Panama, Real Estate - Panama | Statista Market Forecast
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.
9) Demand for single-level homes will stabilize property values in accessible Panamanian neighborhoods due to an aging population
Panama's population is getting older, with 8.2288% of males aged 65 and above in 2023.
Many older Panamanians prefer single-level homes because they're easier to manage and access. Popular spots like Coronado and Boquete attract retirees due to their peaceful lifestyle and excellent healthcare.
In these areas, the demand for homes is strong, driven by retirees looking for convenient access to healthcare and a serene environment.
Real estate trends show that as Panama's population ages, there's a growing interest in properties that cater to their needs, especially in regions known for their retiree-friendly amenities.
Neighborhoods with easy-access properties are likely to see stable values, thanks to the consistent demand from older buyers.
Sources: Worldometers, Business Panama, Trading Economics
10) Colón’s revitalization projects will gradually enhance its residential appeal, leading to a slow rise in property prices over time
Colón is buzzing with revitalization projects that are reshaping its residential landscape.
With a hefty $650-million investment in infrastructure, including housing, sewer, and water systems, Colón is setting the stage for better living conditions. This is crucial for drawing in new residents and investors who are eager to be part of this transformation.
In 2023 and 2024, property sales in revamped areas have surged, with house prices more than doubling in some neighborhoods. This shows a growing belief in Colón's potential, even as Panama's overall housing market remains sluggish. The buzz around a new planned community, featuring thousands of apartments and amenities, is also attracting potential homeowners and renters.
Tourism is picking up steam, thanks to the new Amador Cruise Terminal and the Colón 2000 port, which are set to welcome half a million visitors. This tourist influx is likely to boost demand for short-term rentals, pushing property values higher. The media spotlight on Colón's improved living conditions is also helping to shift perceptions, making the city more attractive to both residents and investors.
Locals are noticing the changes too, with new businesses popping up and a sense of community pride growing. The revitalization is not just about buildings; it's about creating a vibrant, livable city that people want to call home.
As these projects continue, Colón is slowly shedding its old image, paving the way for a brighter future. The ongoing improvements are expected to gradually enhance its residential reputation, nudging property prices upward over time.
Sources: ENR, Global Property Guide, Rio Times
11) Smaller studio apartments will become popular with single professionals, boosting rental yields in central business districts
Smaller studio apartments are becoming increasingly popular among young professionals in urban areas.
In Panama, urbanization is on the rise, with a steady influx of people moving to cities. In 2023, the urban population growth rate was 1.8759%, drawing more individuals to central business districts like Panama City. These areas offer the convenience of living and working in close proximity, which is a big draw for new urban dwellers.
Living close to work is a top priority, especially in bustling hubs like Panama City. With its strategic location and booming economy, professionals are keen to reside near their workplaces. The city's proximity to key amenities, such as the Panama Canal and Tocumen International Airport, makes central business districts even more appealing.
Investors are taking note, as rental yields for smaller units are higher than those for larger apartments. In 2024, gross rental yields in Panama ranged from 6.8% to 9.5%, making these compact spaces an attractive investment, particularly in urban and tourist hotspots.
The gig economy's growth from 2024 to 2025 has also played a role, encouraging more transient living arrangements. This shift favors compact, minimalistic living spaces, aligning perfectly with the needs of single professionals.
Sources: Global Property Guide, Trading Economics, LATAM News
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12) Energy-efficient home systems will boost prices for units with smart solar panels and green tech
In Panama, there's a growing trend towards energy-efficient home systems.
This shift is largely due to a heightened awareness of environmental issues and the perks of sustainable living. People are more conscious of their environmental impact and are actively looking for ways to reduce energy consumption in their homes.
The Panamanian government has been instrumental in this movement by offering fiscal incentives for solar projects. These incentives, such as exemptions from import taxes and income tax credits, have spurred investments in solar energy, especially around Panama City. This makes it more appealing for both consumers and developers to integrate smart solar panels and other green technologies into homes.
Additionally, the Comfort & Lighting market in Panama is expected to see a 14.68% growth from 2024 to 2029. This surge is driven by changing customer preferences and trends that lean towards energy-efficient and sustainable products. As demand for these technologies increases, the price of units that incorporate them is likely to rise due to their perceived value.
For those considering buying property in Panama, it's worth noting that homes equipped with these advanced systems not only offer environmental benefits but also potentially increase in value over time. The integration of green tech is becoming a key selling point in the real estate market.
13) Newer condo developments in prime areas will become more appealing and pricier due to demand for low-maintenance, turnkey properties
Interest in low-maintenance, turnkey properties is booming, especially among retirees and expats who want easy living.
Since 2023, more people are looking for homes that need little upkeep and come with modern perks. This trend is clear in hot spots like Casco Viejo and Punta Pacifica, where new condo developments are all the rage.
Sales of new condo units have shot up, thanks to investors eyeing high-quality properties with modern features. These condos often promise higher rental yields, making them a hit with both buyers and renters.
Their prime locations and modern amenities make these properties even more appealing in today's market. Real estate listings in Panama now highlight low-maintenance features like smart tech and energy-efficient systems, showing a strong market preference for convenience and modern living.
Media reports back up the growing popularity of condo living in urban areas, further boosting the trend towards newer developments. This shift is reshaping the real estate landscape, with more people opting for the ease and comfort of modern condos.
In these prime districts, newer condo developments are not just popular but also command higher prices, thanks to their low-maintenance appeal and modern amenities.
Sources: Panama Equity, Condo Control
14) Luxury villas with high maintenance will see slower price growth as buyers opt for easier-to-manage properties
In Panama, luxury villa buyers are shifting their preferences due to rising maintenance costs.
Maintenance fees in Panama City are notably high, often surpassing those in major US and Canadian cities, with averages around $2.50 per square meter. This has made potential buyers reconsider their options, especially when it comes to high-maintenance properties.
There's a growing trend towards low-maintenance and sustainable living. Many buyers, particularly younger ones, are drawn to properties that offer security and sustainability, which require less upkeep. They prefer minimalist and eco-friendly lifestyles, making these properties more appealing.
Real estate market analyses indicate that price growth for luxury villas is slowing. This is because more buyers are opting for properties that are easier to manage, reflecting a broader shift in preferences.
Real estate agents have noticed this change too, reporting a decline in interest for high-maintenance properties. Buyers are increasingly looking for convenience and ease of management in their investments.
As a result, high-maintenance luxury villas are becoming less attractive, which is mildly lowering their price growth. This trend is expected to continue as more buyers prioritize easy-to-manage properties.
Sources: Statista Market Forecast, Expat Tations, Buildium
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.