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Monday, July 9, 2012

2012 Panama City Real Estate Survey By Panama Equity

In July 2010 we asked the question “Is now a good time to buy an apartment in Panama City?” We discussed the boom years running up to the economic crisis and the state of the market in its aftermath.
It was at that time that we started to define the post-crisis buyer; how investor goals were changing, and how real estate developers in the region were adapting to this new reality.
So now, two years later, we’ve excited to be able to publish an update on the Panama City real estate market.  It comes courtesy of Kent Davis, founder of Panama Equity, a boutique Panama real estate agency based in Panama City.
Panama Equity shares our call for more real estate transparency in the region and sponsored a market research study of over 100 real estate agents actively working in Panama City.  The goal of the survey, conducted in both English and Spanish, has been to capture and clarify the status of what could easily be Central America’s most dynamic real estate scene of the past decade.
Panama City, Panama construction projects on Avenida Balboa
English: New photos of Panama City, Panama construction projects on Avenida Balboa (Photo credit: Wikipedia)
Highlights from the survey include:
  • 76% of all real estate sales in Panama City fall between $120,000 and $400,000
  • 28% of all buyers in real estate transactions in Panama City come from Latin American countries other than Panama, with Venezuela leading the way
  • Furnished, 2-bedroom properties are by far, the easiest to rent, according to brokers, 65% of whom had closed such a deal in the past 3 months
  • Average sale price on Avenida Balboa, Panama City’s prominent coastal strip, is now between $1900-$2000 per square meter
  • More than 50% of Panama City’s real estate brokers have closed a sale in the San Francisco neighborhood over the past 6 months making it the city’s most dynamic real estate district
  • 55% of agents surveyed believe that prices on both rentals and sale properties will either stay the same (or increase slightly) within the coming 12 months.
  • 85% of agents surveyed had negotiated a discount of between 1-10% off of the listing price in deals they have closed over the last 6 months.
  • 83% of Panama’s real estate agencies surveyed are small, independent firms operating with between 1 and 4 agents
So, what does this information mean about the current status of the market for buyers and sellers according to Davis himself?
  • If you are looking for a cash flow investment, you’re best off with a two bedroom and need to spend the money to furnish it
  • Look to negotiate up to 10% off listing prices and expect to work with independent brokers
  • If you had planned on waiting until prices drop, most experts believe that they’ll either stay the same (or increase slightly) in the near future

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