Real Estate Market Deflates

In Panama City a reduction of almost 20% in the prices of residential rents has been reported, particularly in areas that five years ago registered the highest prices in the capital.

Thursday, September 6, 2018

The high supply of apartments and houses in residential areas has pushed down prices, especially in areas such as Paitilla, Balboa Avenue and Costa del Este, where in 2013 2 and 3 bedroom apartments were rented at prices above $2,000 and $3,000 a month.

Martesfinanciero.com reports that "...According to the construction guilds, prices of residential real estate have plummeted by an average of 18%. Aldo Stagnaro, president of the Panamanian Association of Brokers and Developers of Real Estate (Acobir), explained that 'There is a lot of real estate supply and that is good and ideal for investing by buying and then renting it out. The property can pay for itself from the rent'."

Eileen Chévez, market research coordinator at Cbre Panama, explains that "... the residential rental market in 2017 and the first half of 2018 was sluggish, however, in July it started to become more dynamic ...Chévez indicates that, given the oversupply, the terms of negotiation of rents are greater and tenants obtain great benefits. The main cause of the fall in prices is attributed to an excess supply of real estate."

In the medium term it does not seem that the supply of residential real estate will decrease.  As of May, the environmental impact studies that were submitted in Panama represent an estimated investment of $235 million. See "Construction: $235 million in residential projects"

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More on this topic

Real Estate Market is Saturated?

October 2018

It is estimated that it will take about seven years to commercialize, through the usual channels, the over-supply of between 500,000 m2 and 600,000 m2 that currently exists in the real estate market in Panama.

Those times when real estate projects were selling fast are already in the past.

Panama: Soaring Prices in Residential Market

August 2016

Between the first half of 2015 and the same period in 2016 the average selling price per square meter rose from $2,850 to $3,100 in Class A projects.

Data from CBRE Panama reported on by Capital.com.pa reflects the growing demand for residential projects in the capital and its surrounding areas. In the case of Class A residential projects, in the first half of the year an increase was recorded in the average price per square meter, while in the segment of class B projects, stability is reported in prices, "... underpinned by a low availability. "

Panama’s Residential Market

December 2012

The residential market in Panama City remains stable, with slightly increased demand for Class A buildings at 74%, up 2% on the prior period.

CBRE Panama submitted its report on the housing market for the first half of 2012:

The residential market in Panama City has remained stable in the first half of 2012, showing an absorption rate of 74% in Class A buildings compared to 72% in the previous period.

Excess Supply of Luxury Homes

May 2010

The real estate market in Panama has an excess supply of between 5.000 and 8.000 luxury residences.

This was stated by Wilson Ruiz, from the Panamanian Realtors Association (ACOBIR).

Such properties are located in San Francisco, eastern coast, Balboa Avenue and Bella Vista. They feature between 30 and 700 square meters of constructed space, and are priced above $250.000.

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