The change in demographic of the real estate buyer in Panama over the last five years has resulted in a surge of new, higher-end property offerings. Prices on Panama real estate have been driven up due to both increased purchasing power of the local Panamanian market along with a new type of foreign buyer who in all likelihood is still working (as opposed to retired, which was the typical buyer from five years ago), with higher expectations on quality and amenities, and less restrictions on budget.
What exactly is high end, luxury real estate in Panama going for these days? What are the best neighborhoods for someone who is less price conscious and more driven by lifestyle and location? And what should buyers be wary of when investigating options in this segment of the market?
Neighborhoods such as Albrook, Punta Pacifica, and Costa del Este are establishing themselves as the top choices for high-end real estate in Panama. New projects like a private island development within Panama City and a Jack Nicklaus golf community near the International airport have seen tremendous success (in terms of inventory absorption) and would have been perceived as overly ambitious and ahead of their time five years ago.
New developments, of course, have their drawbacks. Construction quality in Panama varies greatly from developer to developer, and in the case of a brand new island community…engineering issues and structural concerns immediately come to mind.
From a real estate agency inventory standpoint, gated communities in the areas known as Camino de las Cruces, Costa del Este, and the Clayton/Albrook area continue to thrive because they are meeting the demands for a living solution offering security, privacy, and a level of amenities that were previously only seen in high rise developments. This market is also driving new supporting services in their respective neighborhoods such as fine dining, high end delis and specialty food stores, along with new international schools within the area.
According to Greg D., an internet executive from Malibu, California who brought his family to Panama four years ago, “We loved living Camino de Cruces because it was close to the office, and took advantage of the equestrian center in the area, but found it to be quite far from the center of the city, where the nightlife and activity was. We also felt the quality of the markets, shopping, etc. were a bit more on the lower side versus other parts of town.”
After making the move to Costa del Este, Greg discovered “that it has all the qualities of living in Punta Pacifica without all the gnarly traffic and other nonsense. We have good restaurants, fine markets, and everything that's needed to have a normal living experience. It's also quite convenient to the center of the city and an easy commute to the International School of Panama.”
So what exactly does your money buy these days in terms of higher end, luxury real estate in Panama?
$500,000 will generally get you a two- to five-year old apartment (multi-family high rise condo) that measures roughly 225 meters, or 2,450 square feet with between two and three bedrooms. In all likelihood it will be in an oceanfront district such as Costa del Este, Punta Pacifica, or Balboa Avenue. The property is likely to have ocean views, amenities such as a gym, swimming pool, and 24 hour security, and perhaps some extra amenities such as racquetball or basketball. Examples of high-end buildings offering this type of condo-living option are Parque del Mar in Costa del Este (although not front line to the ocean), Dupont in Punta Pacifica, and Allure, just off Balboa Avenue.
Luxury Homes in this price range are relatively non-existent, but can occasionally be found in the Bethania, El Dorado, Hato Pintado, or Dos Mares neighborhoods. Don’t expect a large floor plan or stunning views on a “luxury” home for sale at this price point though.
$1,000,000 will get you a condo with just over 400 meters of living space, or roughly 4,300 square feet. Included in these types of offerings are open floorplans, attached maids quarters, walk in closets plus en suite in all of the bedrooms, along with generally high cielings and build materials such as granite and marble. Developments such as Pacific Point in Punta Pacifica, offering a shared community center with tennis courts and a gym with a personal trainer, or the oceanfront Aqua II building in Costa del Este become viable options at this price point. Additionally, penthouse units in YOO Tower on Balboa Avenue start at just under $1,000,000.
Luxury homes for sale generally start around the $1,000,000 mark and would most likely be found in one of a number of gated communities in areas like Costa del Este, Clayton, Albrook, and other parts of the former canal zone such as Quarry Heights in Ancon and the Camino de las Cruces development, near El Dorado. Tucan Country Club, just west of the city, also offers high end homes in this price range.
One small note on amenities: Amenity level and overall finish quality vary greatly in Panama. Some communities like Camino de Cruces offer very few amenities, whereas communities like Embassy Club offer a wide variety of both amenities and community-driven events and interest groups. Brand new buildings may be very beautiful in their first few years, but can deteriorate rapidly if not maintained properly. A few older buildings, on the contrary, have withstood the test of time and have a large cash reserve on hand (from monthly common area maintenance/HOA charges) because few repairs have been necessary over the years.
Luxury homes for sale in Panama are in most cases located within gated communities, however there are also high end single family homes which are stand-alone properties not associated with any particular development. These types of luxury single family homes are most likely to be found in areas such as Ancon, Clayton, and Albrook, all of which are within the former Panama Canal Zone, known locally as “Las areas revertidas.”
While crime is not a major concern in Panama City, it is always something to think about in this region of the world. Home robberies and kidnappings are not common, but the security of a well managed building or a closed and gated community have become increasingly sought after, especially for high profile residents. Stand-alone homes, especially those on large private lots may be more exposed to this type of crime.
Gated communities such as Embassy Club are creating a new precedent in Panama, and have been very popular with executives and foreign service personnel who require added security and a higher standard of amenities. On site spas, luxurious social areas with multiple swimming pools, soccer turf, kids play areas, plus daily security patrols are a few features that this development brought to the Panamanian market when it was launched a few years ago.
Golf course communities like Santa Maria, located just east of Costa del Este approximately 15 minutes from downtown and 15 minutes (assuming no traffic) to the airport and due for completion in early 2014 also offers this type of amenity list and home selection.
Another point to consider is traffic in Panama, which can be bad, especially at rush hour in areas like Punta Pacifica or Balboa Avenue. Commute times from areas like Costa del Este and Albrook vary greatly depending on the time of day, and need to be taken in to consideration on school decisions and office commutes.
From $2,000,000 - $4,000,000 will cover 99% of the luxury properties for sale in Panama for both condos and homes. Buildings such as the Bellagio offer luxurious lobbies, ocean front social areas including infinity pools and barbeque facilities, and in the case of the Trump Ocean Club, hotel style amenities like maid turndown, concierge and room service, along with multiple dining and entertainment options within the building.
Homes in this price point will be built on large, estate style lots (especially in the case of homes in the former Canal Zone) and may even be ocean front if they are located in Paitilla and certain parts of Costa del Este. Island communities like Ocean Reef just off of Punta Pacifica along with golf communities like Santa Maria offer homes in this price range.
One final point to consider: Published pricing and final transaction pricing can vary greatly in Panama, especially in the luxury market. With no transparency and available closed sale comparables, property owners often base their asking prices on similar, potentially overpriced listings. As in any real estate offering, days on market and seller motivation are important factors to consider when evaluating making an offer on a property. To see a small but ever growing list of closed sales comparables in Panama, click on this link.
Buyers seeking a luxury residence in Panama have more options now than they’ve ever had because developers are recognizing that this growing market is demanding a product that, just a few years ago, may not have existed yet.
For more information on luxury properties in Panama, you can contact the author at Kent@panamaequity.com.