Mass construction in Panama, particularly in the capital, is concentrated in some residential areas where prices are rising and it is advisable to monitor this situation. However, this does not constitute a threat of a housing bubble in the view of some economists.
Marbella, San Francisco, Bella Vista and Balboa Avenue are the areas with the greatest concentration of building projects in the capital, according to Capital.com.pa.
While recommending that there should be a mechanism for monitoring the behavior of the real estate sector, the economist and financier, Ernesto Bazan, argues that "there are no bubble warning signs." Bazan is refering to signs like a persistently abnormal increase in prices caused by expectations rather than economic fundamentals, which is associated with a significantly increased level of private debt.
"Today the largest number of housing units are built on Avenida Balboa, totalling 3,444, about 100% more than the number of apartments built in the same area in 2010. In the case of the southern part of the capital, 2011 closed with a total of 896 units, a figure three times higher than the 204 of 2010," published Capital.com.pa .
According to Bazán, the crisis of 2008 contributed to lowering the expectations of the property market in Panama, while banks have managed conservative credit policies, both for the construction sector and the mortgage industry.
There is not any type of a property index implemented by any state agency to monitor the market and thereby prevent price speculation.
The Ministry of Finance has received recommendations several times from rating agencies, in light of the housing boom in the country, regarding the implementation of a property index, but to date no action has been taken.
The increase in residential real estate projects around the center of Panama City has doubled land prices in some areas in the space of five years.
The real estate boom experienced in Panama City can now be seen in the prices of residential projects in areas previously considered as "suburbs" where residential real estate developments are priced at over $80,000.
In the last three years loans for the construction sector increased by 427%.
Statistics of the Superintendency of Banks of Panama (SBP) reveal that between January and May 2013, $2.509 billion more has been provided than in 2011, when the amount of loans processed was $587 million.
Located Ramal Villa Lucre along Corredor Norte, next to the succesful Villa Lucre development at $180/M2 or $16.72/SF. Total area of property 12,613 m2 or 135,766.33 square feet (3.17 acres). The property has a frontage to the ramal of Villa...