Panama City’s real estate market is described as turning after roughly 15 years of stagnation, with stronger rental demand, rising secondary-market prices, and renewed interest from foreign residents seeking a tax-friendly “plan B” jurisdiction.
For many years, Panama City was associated with expensive real estate, oversupply and weak price growth. The market reportedly went through a long period in which prices “did not budge,” as early-2000s development left too much inventory and not enough demand.
That oversupply is now being absorbed. The change is visible in both new construction and the secondary market.
New construction prices are rising
Developers that were selling pre-construction units at around $3,000 per square meter two years ago are now reportedly selling at $3,500 to $4,000 per square meter. In the luxury segment, some prices are reaching $5,000 per square meter.
This is described as a price jump not seen in years.
New construction near the apartment discussed in the transcript is priced at roughly $3,500 to $4,000 per square meter.
Secondary-market rents and prices are moving
The secondary market is also strengthening, mainly because of low rental inventory and higher rental demand.
Reported market changes over the past 12 months:
- rental prices up around 20% to 25%;
- secondary-market sale prices up around 10% on average;
- prime areas such as Costa del Este moving from about $2,000–$2,100 per square meter to $2,200–$2,400 per square meter in some buildings.
Costa del Este units mentioned were generally larger three- and four-bedroom apartments of about 350 to 400 square meters.
The main driver is not described as speculation, but actual relocation demand. Expats and wealthy migrants are moving to Panama because of taxation, safety concerns, political uncertainty, and a limited number of alternative jurisdictions.
Why demand is increasing
Panama is being positioned as a functional tax-friendly city rather than a luxury lifestyle market like Dubai.
The demand sources mentioned include:
- Americans and Canadians, including seasonal “snowbird” buyers;
- people leaving or reconsidering Dubai and the UAE;
- Europeans concerned about taxation and safety;
- Israelis and Jewish buyers from the United States, South Florida, the Northeast, Switzerland and elsewhere;
- high-net-worth individuals looking for residence, lower tax exposure and a safe operating base.
Panama’s appeal is tied to several practical factors:
- territorial-style tax planning possibilities if structured properly;
- low property taxes;
- decent infrastructure;
- decent schools;
- perceived safety;
- direct connectivity through Copa Airlines across the Americas;
- ability to use property as part of a residency strategy.
The transcript compares Panama with alternatives such as Thailand, Malaysia, Singapore, Hong Kong, Paraguay and Costa Rica. Thailand is described as potentially creating long-term tax issues, Malaysia as affordable and tax-friendly, Singapore and Hong Kong as increasingly difficult to access, Paraguay as a major lifestyle shift from Dubai, and Costa Rica as less of a big-city option.
Residency through real estate
Two Panama real estate investment thresholds are mentioned:
- $200,000 real estate investment for residency, typically for applicants from developed countries;
- $300,000 real estate investment for immediate permanent residency for applicants from anywhere in the world.
Other Panama residency options mentioned include term deposits and creating a company and hiring oneself.
Example apartment investment
The transcript gives one example of a secondary-market apartment in Panama City.
Property details:
- building constructed in 2009;
- high-floor unit on the 26th floor;
- 112 square meters;
- one-bedroom loft;
- fully furnished;
- parking, pool and gym;
- walkable neighborhood;
- target tenants: single person or young couple.
The apartment is expected to rent quickly for about $1,600 per month fully furnished. The claim is that if listed on a Monday, it could be rented by Friday.
The purchase price is unclear in the transcript. However, the unit is described as being around $1,800 per square meter and below $2,000 per square meter.
The projected assumptions include:
- 92% occupancy, described as conservative;
- 10% property management fee;
- tenant-finding fee equal to one month’s rent, with tenants staying about 18 months on average;
- annual property tax of about $1,020;
- monthly HOA fee of $179;
- some closing costs, legal costs and minor renovation costs;
- projected pre-tax net yield of about 5%.
The property tax is described as being in a higher bracket because the unit is an investment property, but still relatively low.
Secondary market versus new construction
The apartment is contrasted with new construction nearby priced at about $3,500 to $4,000 per square meter, roughly twice the secondary-market price.
The expected rent for the new construction would not be twice as high. The transcript gives the secondary unit rent as $1,600 per month and starts to describe the new-build rent as “22 to…” but the exact figure is unclear.
HOA fees in new buildings are also expected to be higher. New buildings are described as averaging about $3.50 per square meter in HOA fees. For a 100-square-meter unit, that would be about $350 per month, almost twice the HOA cost of the example secondary-market apartment.
The trade-off is that newer buildings may have better amenities and may be easier to rent, but the older secondary-market unit offers a lower entry price and stronger yield potential.
Building and maintenance risks
Older buildings carry the risk of special assessments. In the example discussed, the building had recently been repainted, with an estimated four years before another exterior repaint would be needed.
The building is described as functional but not visually attractive from the outside. The investment case is based more on price, walkability, rental demand, and yield than on luxury positioning.
Investment view
The market is described as entering a stronger phase after years of stagnation. The argument is that demand is being driven by multiple fundamentals:
- more foreign residents moving to Panama;
- limited supply of tax-haven or safe-haven real estate in walkable urban neighborhoods;
- rising rents;
- rising secondary-market prices;
- growing pressure on alternative jurisdictions such as Dubai;
- increasing capital flows into Panama.
The main caveat is that a major global liquidity crisis could affect all real estate markets, including Panama. Outside that risk, the transcript presents Panama City as a market that has started turning in the right direction and where investors can still find secondary-market deals with relatively low carrying costs, rental demand, and residency potential.
