The New Middle Class in Panama

Along with the pace of strong growth in the Panamanian economy in recent years, so too is growing a new middle class who are driving consumption.

Tuesday, July 12, 2011

Homes and cars are the main investment goals of the new Panamanian middle class. For the first objective, the government plans to establish subsidies with the Preferred Interest Act, which pays 4% market interest rate on home purchases up to $65,000. If the market rate is 6%, the customer will pay 2%, and the state pays the other 4%. For households from $65,000 to $ 80,000, the subsidy rate is 2%. In this price range people buying are those who work in banks, industries, business and the health sector, whose household incomes are above a thousand dollars a month. With a monthly income of more than $350, middle class citizens are able to buy a $30,000 home.

For the purposes of market analysis, middle class sub-sectors can be defined according to the range of housing they have, explained Elisa said Suarez, executive director of the National Housing Developers Council (Convivienda).

As for the size of the Panamanian middle class, an article in indicates it is "32% of the total population, which according to the census of 2010 amounts to 1,056,000 inhabitants."

More on this topic

Another 50 million Consumers in Latin America

November 2012

In just six years the number of people in Latin America with middle class purchasing power increased from 103 to 152 million.

Beyond showing the extraordinary achievement that it means to have taken 50 million out of poverty, the report "Economic Mobility and the Rise of the Latin American Middle Class'', by the World Bank, points clearly to one of the fundamental reasons for global investor interest in the countries of the region: it has 50 million more consumers.

Middle-Class Housing Incentives

October 2011

Proposals submitted by the Costa Rican government are awaiting approval by Congress.

Two bills intended to stimulate the middle-class housing market were presented over a year ago and have still not received approval from the Costa Rican legislators.

Among the proposals that have not progressed is one that refers to a five-year exemption from paying property tax for homes valued under $145,000 in the 48 months following the law’s inception.

Panama Lacks Housing for Middle Class

August 2011

Of the 520 housing projects on the market, only 18% offer homes for under $80 thousand.

According to data from Galería Inmobiliaria, a company dedicated to studying the sector, the average price of all the projects under construction (298) ranges from $200,000 to $400,000.

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