The wealthy and super wealthy are starting to discover Panama, and we believe this market segment will be the driver for 2013. We saw it in 2006 and we’re starting to see it again: a second wave of buyers looking to live and invest in Panama, and they have their sights on the NEW Panama. Multi-billion dollar infrastructure investment is creating a new urban vitality and renewed sense of livability in the city, and we’re seeing buyers coming in once again from all over the world, but these buyers are different from the first wave. Panama is becoming Latin America’s hub for wealth, and we see strong indications that the high end market is the place to be in 2013.
It’s happening in other sectors of the local economy as well, and for our readers who already live in Panama, the signs are obvious: New high end restaurants, more luxury cars on the road, and new and expensive retailers carving out a space in the shopping malls all catering to this new affluent demographic (and it’s not just foreigners). Ten years ago, this could have never been possible, but strong signs are indicating that there is money to be made investing in high end real estate in Panama, and prices haven’t been this low since early 2007.
We see the luxury sector as one of the best positions to be in for 2013.
Those who have followed the Panama story since 2007 know that just five years ago, Panama had no 5 star hotels, no ultra high end car dealerships, and the idea of selling out a housing development located on an artificial island (Ocean Reef) where prices for completed homes started at $3 million each was considered simply impossible.
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The luxury sector in Panama is driving the market right now, and we see a tremendous upside in properties which meet the needs of the affluent buyers who are demanding quality construction, first class service, and more than the standard list of amenities in their residences.
Evidence all over Panama is supporting the trend.
The first phase in the Ocean Reef project is now completely sold out, the Jack Nicklaus golf course in Panama City’s Santa Maria development is well underway with homes selling at an average of $1 million, and good luck finding anything for sale in Punta Pacifica’s Bellagio Tower for anything under $2 million.
The buyers for high end real estate are already here, and large retailers believe that there are more on the way: Mercedes Benz TRIPLED their sales in Panama last year, BMW’s massive new showroom just opened in June, Multi Plaza (Panama’s high end retail center) is adding another 200 stores, and the Ritz Carlton Group just started construction on their first project in the region, to be located in downtown Panama City.
In addition, TWO new marina projects were approved at the beginning of November to address the pent up demand for accommodation for yachts and sailboats. New marina capacity brings first time visitors to Panama, many of whom will discover what is quietly evolving into a radically changed city.
High end properties in neighborhoods like Punta Pacifica, Balboa Avenue, and Costa del Este are selling and renting, and the development pipeline for new inventory is slowing down. If fewer new projects are starting there will be less to choose from, which is another reason we like the sector.
As a company, we’ve closed more $700k + transactions this year than ever before. Many of the clients who have expressed interest in buying in the first quarter of 2013 are looking for well built, large, high end apartments and there are less than 10 buildings that meet their criteria in the city to choose from.