The well positioned area of Coco del Mar, in Panama City, will be designated as high density, allowing the construction of residential and office buildings.
The Ministry of Housing and Land Management has made changes to the zoning of the area adjoining via Cincuentenario, between Calle 50 and Calle Republica de la India, changing its classification to RM3-C2, which allows the construction of high-rise residential and office buildings.
With its profitability affected by low hotel occupancy recorded in the capital of Panama, the hotel Esplendor has converted its 100 rooms into rental apartments.
This is the example of the boutique hotel Esplendor, which opened its doors in 2010 with an investment of $30 million, but at the end of 2012 closed due to the low occupancy rates, which made it unprofitable.
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.
In the last five years the Authority for Consumer Protection and Competition of Panama resolved 1.676 lawsuits against developers and builders.
Prensa.com reports that "Consumer complaints against housing developers were resolved in the Reconciliation and Complaint Decision departments and agreements were achieved through judicial agreements, out-of-court settlements, repairs, clarifications, money returns and handing over properties, among other things. "
In the first seven months of the year the value of approved construction projects amounted to $918 million, 45.3% more than in the same period last year.
This July alone, the total approved exceeded $151 million, representing a 140% increase compared to July 2011.
Of the total number of permits approved $705 million worth was for projects to be developed in the capital, being mostly non-residential.
More than 42,000 people attended the event, during which there were transactions worth $270 million.
In an article in Elsiglo.com Gabriel Diez, president of the Organizing Committee of CAPAC Expo Habitat 2012, reported that this amount will be added to by transactions taking place "throughout the year thanks to the contacts made during the show."
"Diez said the 25th version exceeded expectations as more than 42,000 people came through the doors, a figure that has not been achieved to date in any CAPAC Expo Habitat. Diez attributed the turnout to people’s growing interest in looking for homes that fall within the range of prime interest. "
Demand for luxury properties in Panamanian coastal areas has grown and it is not unusual to end up paying up to $1,800 per square meter.
Residential projects, depending on their proximity to the beach and how well esteemed the area is, in many cases can exceed a million dollars.
The most sought after are the banks of the Pacific, starting in the Capira district, continuing through the area of Coronado, San Carlos and Farallon in Cocle.
The National Council for Housing Promoters in Panama is made up of 22 Developers and 9 Banks, who are united by quality and accountability requirements.
An article in pa-digital.com reports that "57% of everything that is built in the Republic of Panama is developed by members of this union whose promoters have been in the housing market for over 50 years."
The Panamanian group of companies, Convivienda projects sales in 2012 amounting to $665 million with the delivery of 7,429 homes.
The director of the national council of housing developers, explained that the with the Preferred Interest Act raising the ceiling on the value of homes which can benefit to $120,000 will help... "the middle class above all, because there are more chances to get a house for a longer period", reported Panamaamerica.com.pa
The Panamanian government will announce in the coming weeks a tender for several tourist developments in the area.
The executive secretary of the Management Unit for Reverted Property (UABR in Spanish), Juan Carlos Orillac said they have already completed a development plan for the area prepared by the Spanish consulting firm C4T .
"The exploitation of the beautiful beaches of Sherman offers the industry, the chance to construct of six ecotourism hotels, yacht marinas, cultural centers, eight housing cores and recreation centers.
According to their press release, Panama’s Superintendency of Banks’ study of the real estate market shows growth in the construction sector.
For the fifth consecutive year, Panama’s Superintendency of Banks circulated a survey among those banks with most lending activity within the construction sector in order to analyze the housing market. On this occasion, as well as requesting information regarding single-family housing projects and apartments, it included financed projects which fall into the category: Other Buildings, Infrastructure and Commercial Properties.
The crisis in Europe, North America and Venezuela is dampening the dynamism in the real estate sector whose sales depend heavily on these markets.
In the first six months of 2011, of the total amount of real estate transactions only 2% related to the sale of luxury real estate projects.
The executive director of the National Housing Promoters (Convivienda), Elisa Suarez Gomez, said that building of luxury residences has been reduced in the first half of the year. "... In luxury segments, those costing upwards of $350,000, sales depend heavily on the foreign market, so the crisis in European countries, Canada and Venezuela, has made for significant changes in the sales process", said the director to Panamaamerica.com.pa
In the past two years, the value of constructions in the district of Arraijan, in the central-western part of the Province of Panama, rose to $200 million.
Of all the money invested, $97 million corresponds to non-residential projects.
According to the President of the Panamanian Chamber of Construction (Capac) commercial and real estate investments are continuing to grow to the west, even as far as Capira.