As Panama reopens, property buyers are snatching up top properties around Panama City. In the second quarter, Punta Pacifica Realty continued to see unprecedented sales and rental activity, particularly in high-end properties offering resort-style amenities.
According to our latest data, sale prices in the second quarter were up 5 to 7 percent in top tier buildings from the last quarter of 2020. It’s becoming harder to find motivated sellers and buyers are starting to compete for top properties. With the bottom-of-the-barrel quarantine prices a thing of the past, FOMO — fear of missing out — is turning into a reality, with fewer top-quality resale homes on the market and many of the city’s top developments selling out of their best pre-construction units.
In the second quarter, we saw many of the same trends we identified in the first quarter continuing, as more countries around the world loosen restrictions. We posted record sales in the first quarter and we surpassed those numbers in the second quarter. Although rental prices are still depressed from their pre-covid numbers, occupancy has increased significantly across PPR’s portfolio of more than 300 properties, with occupancy levels steadily above 90 percent..
Once again, we’re seeing tremendous activity in the high-end developments, especially the few developments that offer a waterfront lifestyle. Sales on Ocean Reef, the man-made islands in Panama Bay, are on fire. The first phase of Seascape, the wellness-focused community on Ocean Reef’s second island, is now completely sold out. The second phase Seascape was recently released through a “family and friends” promotion and nearly 70% have sold, even before the official launch, with 11 sales in recent weeks.
Construction has started on Seascape, which usually signals the next phase in pre-construction pricing. But with such a limited supply available, we doubt the remaining units will last very long.
Across Panama City, we’ve seen a focus on high-end units with top amenities. With many buyers worried about the shifts in the global economy, this is a classic “flight to quality.” While many buildings in Panama City are seeing few or no sales, the top buildings are very busy.
Penthouses continue to be highly sought after. During the second, two penthouses in Seascape sold, for $1.9 million and $1.2 million respectively. The last residences in Waterfront 21 sold for close to $2 million. In Almar, the last units were also sold in the $2 million range and construction has started, another sign that Panama real estate is in the midst of a healthy cycle.
Investors continue to focus on resort-style residences with top quality amenities. In the second quarter, PPR signed 14 sales contracts in the Yoo Panama on Avenida Balboa and 11 contracts in The Ocean Club, the waterfront tower that remains the icon of Panama City living.
Wanders and Yoo, the much-discussed designer-focused downtown tower, continues to attract the investor attention. The tower touches on many of the recent trends, including a resort lifestyle, top amenities, and a prime location. PPR ‘s sales team put together six new sales contracts for the Wanders and Yoo in the second quarter.
There was a similar uptick in interest in Santa Maria, the gated golf course community minutes from downtown. La Maison by Fendi Casa — another international designer name — and the Reserve were particularly popular, in large part due to a dramatic increase of buyers from Peru looking for a home with more political stability.
In the second half of the year, we expect continued investment flow from Peru and other areas experiencing political turmoil in South America, as travel restrictions begin to loosen. We also expect increased activity from Canada, which saw almost zero travel during the pandemic. As active as it has been through the first half of the year, we expect to see a surge of interest as more markets open to travel; we are still a long way from “normal.”
As we return to a fully-opened status, we will continue to follow many of the trends that were propelling the Panama market before the pandemic. Economists are predicting solid growth in Panama for the next two years, led by the trade, mining and infrastructure projects that always made Panama a solid investment.
In addition, the international community is only starting to absorb the recent changes to the residency programs in Panama, including a new form of “Golden Visa” launched last November. The new Panama Investor Visa provides an easy path to residency for investing as little as $300,000 in property.
Jeff Barton is managing director of Punta Pacifica Realty, the top sales and property management company in the waterfront skyscraper community of Punta Pacifica.
For more information on the Panama real estate market, visit http://www.puntapacificarealty.com or call us at: (+507) 836-5991 / (786) 528-3080.