Panama JourneyIs Panama a good place to invest in real estate?

About nine years ago, I recall an “international” agent speaking to our group at the South Metro Denver Board of REALTORS® about the amazing investment opportunities in Costa Rica.  The prices he was heralding seemed too good to be true for ocean front property in developed areas.  If you are looking for such a deal today in Costa Rica, good luck.  That ship has sailed.

Tontalos

Enjoying my favorite jugo de naranja at Tontalo in Casco Viejo, Panama City

Today, international attention is focusing on Panama.  Sky rises less than a decade old grace the skyline and billionaire foreign investors like Donald Trump have poured millions into the tourist industry of Panama.  One of Panama City’s oldest areas, Casco Viejo, is being revitalized to its original splendor, embracing a very hip cultural vibe that I thought was really incredible. Why so much foreign attention in Panama?  Well, here are a few reasons that I had the opportunity to verify personally:

  1. Panama’s government is very open and friendly to foreign investment and businesses. Their economy is the fastest growing in Latin America!
  2. Panama’s pensionado program is great for retirees who enjoy crazy discounts and other benefits with a requirement of only $1000 of monthly retirement income per person.  Boquete is the #1 Retirement destination!
  3. They have immediate plans to widen the Panama canal which used to be the main source of income for the country, but now falls in second place to tourism.
  4. Infrastructure is vital to any expansion, and we saw first hand all the work going on to the highway and road systems.  They also now have two international airports.
  5. Fresh water supply is reliable and you can actually safely drink the water there right out of the tap.
  6. English is being encouraged in schools and tourist areas. You can survive in many places with no Spanish, but I certainly don’t recommend it.  I really missed not being able to communicate properly.
Panama City

Panama City’s Skyline is impressive!

In ten days, we traveled from Panama City, by plane to Bocas del Toro, then by water taxi and bus to David, then via rental car to Boca Chica, Pedasi, Coronado and back to Panama City.  (See map above) The only area we really didn’t get so see at all was the #1 hot spot for retirees, Boquete.  Each area we saw had its own charm and list of drawbacks as well.  If you are used to the suburbs of Denver, there is no place like home in Panama especially in terms of shopping and commercialism and just overall extravagance.  But I am going to go out on a limb and guess that maybe the reason that Panama ranked as the happiest country is that it’s not ultra commercial.

What I found particularly lovable about Panama and its people was the same thing that I could tell would drive me a little nuts if I lived there.  Let me explain.  Coming from America where everyone’s undies are in a bunch about the “issue of the day”, I felt like the whole country took a deep breath and counted to ten.  I bet they all have great blood pressure there!  (Not to mention the amazing, fresh, non-GMO, unaltered food that I am sure also contributes.)  Things are just not regulated that much there, and you see things take place that would never fly here. I found it to be incredibly refreshing! On the other hand, the laissez faire attitude contributes to the lack of systems and processes to make things run smoothly and efficiently. As a systems/process person, you can imagine how that could be frustrating to me.

u realtor logo

I hate to be a REALTOR® snob, but in order to call yourself one, you have to be a paying member of the National Association of REALTORS® in US and abide by a strict code of ethics. There is no board or code in Panama.

Real estate is conducted entirely differently there, and I would be very cautious in any real estate activity because its lack of regulation.  Although in order to sign or execute a contract you need a licensed Panamanian to conduct the transaction, agents abound with no official training and no licensing or ethical requirements.  I am not saying the agents are bad, in fact, I met some great ones while I was there.  There is no exclusive agency, and from what I hear, a seller will tell an agent their price and the agent then goes and markets the property at whatever price they think they can get and takes the difference.  You can find the same property on several websites and find that they have different prices.  I also hear that often there is often a different price given to Panamanians and foreigners.  Guess who pays more!

Since Panama’s economy is growing because of foreign investment, the recent decline in European and Canadian currency has had a somewhat negative impact on the housing market there.  It is currently a buyers’ market in Panama as Canadians unload properties they have made a killing on in the past ten years and bring those dollars back home to their depressed Canadian economy.

Panama Land For Sale

Beautiful Rolling Hills In Panama with Mountain Views 20 minutes from Pacific Ocean. Photo does not do justice to the actual beauty!

From what I saw, there are still some incredible land buys in Panama, and overall, the cost of living is lower there also.  With Panama being the #1 country in Latin America for economic growth, I do not see investing in real estate in Panama as risky business.  After touring the country, I have my eye on a particular pocket that has not yet been developed but has a lot of potential, and hope to go back maybe next year to do some hyperlocal scouting! Hopefully, I will find the values have not shot up too much, or we’ll be talking about Nicaragua, Colombia or Ecuador!

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