Top investment locations are marked by a growing young population, economic momentum, increased purchasing power, the well-being of the people, good infrastructure and a developed transport network. Panama fulfils these criteria, thereby making it attractive to invest in the country. Where else can you acquire an apartment for 2500 US dollars per square metre within a modern, international metropolis with excellent conditions in a top location on the Pacific promenade? The above-mentioned factors coupled with Panama`s security appeal to many international companies and their staff. This, in turn, serves to create prosperity, purchasing power and a continual demand for real estate. Property investments in Panama City`s top locations realise around 7% per annum (2% in Frankfurt). Such returns are moreover achieved in US dollars, the world`s most important currency. Additional costs for buying in Panama (notaries, lawyers, estate agents and registration) are low at 1-2% of the purchase price. Similar costs in Frankfurt would be approximately 7.5%.
Real estate multiplier in international comparison
The “purchase/rental price ratio” (“multiplier”) compares buying prices to attainable rental incomes. The following rule applies: the higher the multiplier, the more expensive the property. In this way, we can look at both under and overvalued locations.
These figures do not only relate to top settings, but concern average downtown prices and thus differ from our above-mentioned figures for best locations. They do indeed provide a fine overview of profitability in single spots.
Panama is thus internationally an excellent investment location, not only because of its natural beauty, security and strong economic growth, but also because of its real estate figures. The comparatively high rental returns stem from:
The demand from multinational companies for employee accommodation
International business people who wish to profit from the economic growth
Spanish workers who have few prospects in their own country
Foreign retirees who have settled in Panama
South Americans attracted by job opportunities
Such groups can be defined as those preferring to rent rather than buy. Whether you decide on an investment in the UNESCO old town of Casco Viejo with all its incentives or on an apartment in Panama City along the Pacific promenade, the real estate market in Panama is truly exciting and profitable.
Source of graphs (www.numbeo.com, www.globalpropertyguide.com, own)