Panama City Real Estate Market Report 2020 / 2021

Our report on the real estate market in Panama City 2020 / 2021 describes the trend of the real estate market in the exceptional Corona year 2020 and takes a look at Panama’s real estate in 2021. As in the previous year (Report 2019 / 2020) we only report about high quality real estate in prime locations in Panama City, which are located in the UNESCO Old Town “Casco Viejo”, in the promenade street “Avenida Balboa”, in Punta Pacifica and on Ocean Reef. Because these are the locations in which we are active ourselves and can report on prices & rents realized by us.

Those who wish can use the following link to learn about the main events and the historical real estate market trends in Panama City over the last decades.

Anyone who has ever been to Panama City will have noticed that the skyline and thus the supply of residential real estate is huge. That is why we have always focused on unique, hard to duplicate locations with good quality. These are stable in value and easy to let.

The year 2020 had started very well for the real estate market and the economy of Panama. The new Panamanian government had only been in office for six months and new major projects were in the starting blocks (including the city beach Panama City, the fourth bridge over the Panama Canal, the third metro line, and the new cruise ship terminal). In addition, Panama’s copper mine had just gone into operation and the old town “Casco Viejo” was full of large groups of tourists.

And then the corona virus came to Panama…and everything was stopped.

The Panamanian government took a strict course against the virus from the beginning and implemented a hard lockdown of the country from mid-March on. This lockdown was gradually relaxed from mid-June and finally ended on October 12th with the opening of the international airport and tourism.

  • Due to the month-long lockdown, which also applied to the real estate industry, there were hardly any sales during this period that could be used to determine a trend for prices.
  • Since the beginning of October, furniture stores have been well visited again and many are sold out. Confidence is back.
  • However, the Corona-related higher unemployment in Panama will probably affect prices and rents of C and D properties (lower quality locations).
  • B properties (medium to good locations & qualities) have proven to be quite crisis resistant in terms of both prices and rents.
  • Prices in prime locations in Panama City are at about the same level as before. Owners are not willing to sell at really lower prices. Of course, there are always exceptions, but a trend cannot be seen.
  • At the same time, the Corona credit moratorium was recently extended until June 2021, which is why credit-financed real estate is not under stress. In general, the credit share of real estate in Panama is quite low, which makes it less vulnerable to crises.
  • Many expats (employees of multinational companies / tenants for A-locations) had temporarily returned to their home countries during the Panama lockdown. During the lockdown it was difficult to find new tenants and to arrange viewings. Therefore, rents for new leases for A-locations have fallen 10-15%. Expats have been returning to Panama since the reopening of the airport in October, which is again supporting rental demand and is already noticeable.
  • Since October we have also been seeing international buyers in Panama again. These come from Europe and we ourselves are seeing, for example, increased demand from German-speaking Europe for applying for second residences in Panama and opening bank accounts.
  • In addition, our real estate partners in Panama are reporting increased interest since the reopening of the airport from wealthy people from South America (including Argentina, Chile and Colombia) who, due to various crises in their home countries (often accelerated by the Corona crisis), consider USD real estate in Panama as a “safe haven”. The Bloomberg report (info link) published a few months ago, which reports on the escapes of millionaires from the countries of South America to Panama and other interesting locations, also fits in with this.
  • Panama is regionally in a very good position for a strong recovery in 2021. The recovery will be slow, but has already begun. And as long as Panama remains a stable and safe country due to its international importance, this recovery is likely to occur much faster than in other parts of Latin America
  • The above mentioned mega infrastructure projects will bring new labor force and thus rental demand to Panama.
  • We continue to buy real estate in Panama City in a prime location in the first row by the sea at approx. 2,300 – 2,500 USD / sqm and rent it out furnished in Corona times at approx. 12 – 14 USD / sqm (previously 14 – 15 USD). If the rental market remains at the lower level for a longer period of time, purchase prices will probably also be adjusted accordingly.
  • The purchase of smaller apartments (40-70 sqm) in A-locations can be interesting in times of crisis, because the rental budgets are in general smaller. These are also available in buildings with CoWorking areas (Offer-Link).
  • At the same time 2-bedroom apartments keep their attractiveness, because you can integrate your home office very easily.
  • An increased demand is currently experienced by beach apartments near Panama City, because you can also work from there in your home office (info link).
Ocean Reef Islands
Ocean Reef Islands

However, Corona also offers opportunities.
With the island project “Ocean Reef” (info-link) they offer buyers among other things guaranteed USD rental income of 6% annually after costs. Even during the Corona Lockdown, many properties were bought here even before construction began, since people feel more relaxed on the islands than in the city center. “Ocean Reef” is the most successful real estate project in Panama City. The quality and location of this island property is unique in Latin America, as it is located directly in front of the center of Panama City, but due to the island location, one can enjoy its tranquility.

Casco Viejo Panama
Casco Viejo Panama

Also in the UNESCO old town “Casco Viejo” (Info Link) the purchase prices remained approximately on the level before Corona. For used properties in good locations you pay about 3.000 – 3.500 USD per square meter. The renovation works in the old town are running at full capacity again and new beautifully restored colonial buildings are being built. However, many stores and hotels that depend on tourism are still closed and this affects the attractiveness of the old town. Nevertheless, the Corona pandemic has also brought an advantage here. Because in the old town, whose narrow streets are often congested with cars, certain streets are now closed off at set times so that restaurants can use the beautiful streets for their tables.

Basically, the Casco Viejo is a very unique and stable value real estate location, since the approximately 850 buildings on the peninsula in front of the skyline cannot be duplicated.

The plan for an city beach in Panama City, which was initiated last year and would have significantly increased the attractiveness of the entire city, is not being realized at the moment. Instead, a viaduct bridge road will be built to connect the promenade road of Panama City with the Causeway (Pacific Island Road in front of the city).

Panama serves as a “safe USD haven” for investors and companies in Central and South America. Current crisis in the neighboring South American countries reinforce this effect. Exactly for such wealthy investors from South America, Panama has created a new investor visa, which promotes foreign direct investments in Panama and at the same time grants a residence permit under certain conditions. Whoever wants to invest in the region of Latin America will not be able to ignore the Panama location in his considerations right now.

As in the past, Panama’s objective is therefore to emerge from the crisis better than its neighbors and to remain the more attractive and safer country for investors.

And in times when there are political and regulatory developments in Europe and the USA that do not appeal to every investor, Panama will continue to be an attractive location for asset diversification. We are also happy to assist you in applying for a second residence in Panama (info link).

Property prices in Panama City (A-locations) have historically often followed the trends in the USA (e.g. Miami) and these have risen strongly this year. During the Panama-Lockdown this was not possible, so there is a certain need to catch up.

Although the purchase prices for 1A real estate in Panama City are roughly at pre-Corona level, I advise every buyer to negotiate the seller’s price nevertheless. If you don’t need a loan, but can pay directly with equity, you have a very good basis for negotiation. We are happy to help with our experience in this context.


Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. He offers advice on all aspects of living in Panama.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

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