Buying property pre-construction (off plan) can be an effective way to lock in a deal at low prices and take advantage of Panama City’s fast-paced growth. Pre-construction property prices in Panama City typically run about 15 to 20 percent less than the final developer prices and the investment can be locked in with a down payment of between 10 to 30 percent of the price.
After a lull, pre-construction deals are returning to Panama City, as we noted in a recent article. Within the trend, there are many opportunities—and pitfalls. Buying off-plan can be a tricky and risky endeavor, as evidenced by buyers around the world who lost money in projects that were never built, in the wake of the global economic crash.
Off-plan deals can bring much higher returns—in Punta Pacifica, early off plan buyers in buildings like Aquamarine and Aqualine saw the value of their apartments double–but it’s best to take a cautious approach.
- Buy with a trusted developer. Plan to do a considerable amount of research on the developer and their track record. Walk through their current projects. See that they have a good reputation for high quality, timely delivery, buyer satisfaction, and market appreciation.
- Buy in an area with limited future inventory. If the market is already flooded with units, or if there’s a lot of open land left for construction, you risk a wave of new supply coming on the market, which will limit the value of your apartment.
- Be flexible on the delivery date. If you absolutely must sell or move in by the date promised, you might find yourself in a sticky situation. Projects often are delayed. You should have the ability to comfortably wait out any unforeseen problems.
- Buy early. Pre-sale prices tend to increase incrementally by 5 percent, once construction starts. Early buyers get the best prices and the pick of the best apartments.
- Do your homework: It pays off the study the market and the different neighborhoods. Remember, you’re contemplating a home and an investment for the future, so you want to make sure the community and the real estate market is right for you.