As the year draws to a close, let’s take a step back and highlight the big news trends of 2021.
The U.S. Alternative. With home prices skyrocketing in the United States, investors were looking for property investments that could provide real growth in the years ahead. Panama was once again seen as a great alternative, providing stability, a dollar-based economy, and top-quality properties below their market value and replacement cost.
The Rise of Crypto. Cryptocurrencies started to play a role in sales as more owners expressed a willingness to accept bitcoin and other forms of crypto. No longer a theoretical concept, it’s clear crypto will play a more important role in the future. The government is also exploring legislation that would make crypto an accepted currency and create a regulatory framework for transactions.
Ocean Reef Thrives. This was the year the man-made islands in Panama Bay took their place among the most successful in the world. Sales were on fire, with Beach Club Residences, Seascape, Almar, Waterfront 21, and Casa del Mar joining the list of sold-out developments. Construction also moved forward on the key infrastructure, with the marina and Panama City’s largest water sports club opening for business.
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Rental Rebound. Vacancy rates jumped and rates slipped at the height of the pandemic. That all changed in 2021. PPR’s property management department saw occupancy rates rise to over 95% and rental rates steadily increased. There was a clear flight to quality, as apartments in top buildings attracted competition. Over the course of the year, PPR’s property management department added 75 units under management, as more investors turned to our trusted professional team to take care of their investment properties.
Decreasing Supply. The pandemic promoted the cancellation or delay of an unprecedented number of developments. In 2021, there were almost no new projects launched and banks were reluctant to fund new construction loans. As a result, there was an increased volume of sales and absorption of unsold developer inventory, plus resale apartments that had been on the market a long time finally sold. The decrease in supply will have a profound impact on the market — and prices — going forward.
Bulk Sales Soar. Investors increasingly focused on already rented condo portfolios in the buildings with the highest rental demand, such as Ocean Club in Punta Pacifica, Yoo Panama on Avenida Balboa, and the Regent in Costa del Este. Investors typically purchased packages of 5 to 15 units of rented condos in these popular buildings, generating cash flow from day one. These bulk buyers focused on buildings with unique amenity packages and high demand from multinational executives.
Top Developments Near Completion. Construction continued on some of the most widely anticipated developments in Panama City. The list includes the Wanders & Yoo in downtown, the La Maison by Fendi Casa in Santa Maria, and the Beach Club Residences on Ocean Reef. In many cases, buyers who purchased units at pre-construction prices are about to realize significant increases as the buildings complete and move-ins begin.
New Visa Rules. Panama established a new “Golden Visa” rule providing a path to residency for property buyers, a tremendous advantage in the international market. The visa was a big step forward and was one of the most-discussed topics among PPR clients. The government also implemented a new “digital nomad” visa making it easier for remote workers to set up operations in Panama. Both policies reinforced Panama’s image as one of the most welcoming countries in the world for international property buyers.
All these 2021 trends should carry over into the new year. If anything, they are likely to grow, as the pandemic continues to fade and markets return to normal. With all these factors in place — and the economy expected to grow significantly — the next year is shaping up to be one of the best in the history of the Panama property market.