Panama seeks to attract more international home buyers

 Posted on 2023-08-20


In the first semester, home sales were recorded, accumulated for $386.3 million to foreign buyers. The main buyers are from Colombia, followed by Venezuela and the United States.

In the first half of this year, according to data collected by Indesa, there was a 20% increase in home sales to foreign investors and buyers, which are valued above 120 thousand dollars per unit, compared to the year 2020.

This increase represents sales in the order of 386 million dollars. By nationality, the majority of home buyers are from Colombia with 19% participation and transactions for 73 million dollars, followed by Venezuela (14%) and about 56 million dollars in home purchases.

Foreign home buyers, from the United States, represented transactions worth 38 million dollars, 10% of what was sold in the first half. From Spain, 27 million dollars were purchased in homes in Panama, reaching a 7% share.

Citizens of China represented home purchases in the Panamanian market for 24 million dollars (6%), Italy 18 million dollars, Argentina 13 million dollars, Germany 13 million dollars and Peru 13 million dollars, among other buyers of different countries.

Luis Navarro, managing partner of Indesa, stressed that this is a segment that acquires high-value homes, so it is an opportunity to boost the market even for homes that have a value above $180,000 and are in lower demand.

Navarro presented to a group of real estate buyers, investors and promoters from Panama and the United States, the opportunities that the country offers to bet on the local real estate market that represents sales of 3.1 billion dollars annually and around 23 thousand transactions.

The average price of homes purchased by Colombians in Panama is $324,778, for properties of 143 square meters, while Venezuelans paid an average price of $264,253 and Americans $315,919, per housing unit. The average price per square meter ranged between $2,109 and $2,339.

According to the National Housing Council, 82% of the housing sales market in Panama covers units with price ranges from zero to $180,000 that are protected with the benefit of preferential interest.

“There is a great opportunity for more people, for example from the United States, to come to invest in the Panamanian real estate market, whether as an investment, to live, or as a second country of residence when they retire,” Navarro pointed out.

He specified that 40% of home sales valued above $120,000 in Panama are purchased by foreign buyers who see the Panamanian market as a destination to live and do business, according to the real estate sector report, released by Luis Navarro, managing partner of Indesa.

“Real estate investment prices in Panama are highly competitive compared to other markets. Inventories of homes and properties that existed before the pandemic have been absorbed, which allows prices to be very attractive for buyers in the United States,” Navarro said.

He maintained that the analysis describes that this is the time to buy in Panama because it is feasible that in the not too distant future prices will tend to increase.

“Panama offers one of the best mortgage rates in dollars on the continent, making it a good market to buy and invest in homes,” Navarro added.

The director of Indesa explained that Panama has all the conditions to continue attracting foreign investment in the residential real estate segment.

Facts and figures of the Panamanian real estate market

$3.1 billion in annual sales: The Panamanian real estate market registers annual home sales of 3.1 billion dollars, through 23 thousand transactions, according to data from Indesa.

$1.9 billion of new loans: $ 1.9 billion in new mortgage loans and around $1.2 billion in buyer deposits and cash purchases are recorded annually.

$1,000 million of investments: The real estate industry represents one billion dollars in potential investments in residential projects and also generates one thousand 400 million dollars in imports of construction-related products from 5,000 importers (564 companies).

250 developers: The Panamanian real estate sector is made up of 250 developers. Each of them registered sales greater than one million dollars in 2022. In addition to a primary buyer market of 18 thousand people and 5 thousand secondary market buyers. And an estimate of 3 thousand foreign buyers.

4.1% of GDP comes from housing construction.

business meeting

In conjunction with ProPanamá, the Panamanian Association of Real Estate Brokers and Developers (Acobir) and the United States-Panama Business Council (USPA), the Panama Beautiful conference is being held this week to promote investments in the real estate sector and present different residential, commercial and logistics projects to potential buyers in the United States.

Carmen Gisela Vergara, administrator of ProPanamá, said that real estate agents are in Panama City to learn about the potential of the real estate market.

“They have clients in the United States who are interested in having a second residence in countries like Panama, which has a lot of affinity with that market. States showing all the real estate offers and at the same time the advantages of obtaining a second residence with real estate investment, in addition to other laws that encourage foreign retirees to live in Panama,” Vergara explained, indicating that this year there is a growth of foreign direct investments as well as exports.

The president of Acobir, Álvaro Boyd, said that the prospects for increasing sales of residential properties and in the commercial segment are positive with this type of alliances and programs that seek to promote the arrival of new investments in real estate.

“It is a golden opportunity to show that the country is in full recovery. 100 people are participating in this congress and later in September we will have another congress, the VIII Latin American Real Estate Congress Panama 2023 (CILA), with the presence of more than 300 people so that they can learn about the real estate offer, both residential, industrial and commercial,” said Boyd. pointing out that currently there is a greater sale and placement of homes valued above 200 thousand dollars.

He specified that investing in real estate such as warehouses, offices, warehouses, homes, gives a high return on investment and the Panamanian market is stable with a high degree of investment.

The real estate sector’s commitment is aimed at the market of foreign retirees so that they buy and live in Panama, but also at those who seek to diversify their investment portfolio with local real estate.

Source: Martes Financiero