With a large number of skyscraper condo developments under construction since 2008, the supply of condos in Panama City poised to enter the market over the coming years is substantial. In a down economy, and with a lack of willing buyers, the potential overabundance of condo inventory could translate to good bargains for buyers seeking quality oceanfront properties in Panama. See the following article from International Living for more on this.
Today there’s too much supply and too few buyers in the Panama City condo market.
You can benefit. You could buy that shiny new condo for up to 50% less than it sold for pre-construction in 2008.
Too much supply and too few buyers means that motivated sellers needs to offer a killer deal to sell. As an investor I’ll be watching this market from the sidelines. However, if you want to have a base in Panama City that you will hold for the medium term—this is your second chance.
Here’s my advice:
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
- Focus your search in the prime ocean view areas of Balboa, Paitilla and Punta Pacifica.
- Look for newly completed buildings with high-end amenities and where “real” buyers have closed on at least 80% of the units. Buy quality.
- Line up your finance. Get ready to pull the trigger.
- Get reliable realtors onside. Work your realtor. Make him want to find you a deal. Tell him exactly what you are looking for and make sure he understands you can close fast.
Then sit back and wait for the deals. This is a buyer’s market. Here’s why…
According to La Estrella, 191 skyscrapers are under construction in Panama City. On average each building has 30 floors. We don’t know how many condos this equates to but it’s likely to be in the 20,000 to 30,000 range. That’s a lot of inventory.
Most of this is priced beyond the reach of all but wealthy Panamanians. These skyscrapers are targeted at foreign buyers from North America, Europe and neighboring countries in Latin America. These buildings were mostly planned at the peak of the property boom in 2007, construction started in 2008 and are set for delivery this year and next.
Sales contracts have been signed on most of the inventory that’s due for delivery this year. That doesn’t mean the units are sold. We can only count on them being sold when buyers pay the remaining 80% of the purchase price.
Many buyers planned on using a line of credit in the U.S. or a mortgage from a local bank to close. The world has changed since 2008. These options may no longer be open. Banks in Panama routinely withdraw mortgage offers without explanation these days. Other buyers may have the means to close but may decide to just walk away.
Understanding what all this means is complicated by the variety of nationalities of buyers. Venezuelans and Colombians are mostly cash buyers who take a medium term view of the market. They don’t necessarily need rental income from their unit. They were mostly looking for a safe home for their cash. American, British, and Irish buyers were mostly speculators. They are finding themselves in difficulty. Canadian buyers fall somewhere between the other two groups.
Whatever way you look at it—too much supply is too much supply. The pressure is building. The deals are set to come.
Investors will watch from the sidelines for the moment. But, we’ll be standing by. Ready to move.
This article has been republished from International Living.