Panama City Rental Pricing Declines

Panama City Rental Pricing Declines

Panama City has developed significantly over the years, with the addition of a multitude of construction initiatives, both from a residential and commercial perspective which has changed the skyline of Panama on a continual basis, and will continue to do so as Panama continues to develop and gain in popularity as both a tourism and business destination.

If one considers the cost of living, as well as the bargains that could be had in Panama with respect to the real estate that one could have secured in 2004 as compared with current prices, needless to say those prices have skyrocketed. From raw land, coastal properties to condos, prices went through the roof for reasons that may be seen as speculative, as well as well founded sentiment regarding the progression of Panama as a country. Developments such as the Panama Canal expansion project, the variety of incentive initiatives may well have played a role, however many believe that a lot of hype around the real estate in Panama was based upon efforts to follow on Costa Rica’s example of their real estate growth and development.

Ironically though, or perhaps due to the extensive supply that is now available within the rental market, the prices to rent these very apartments have plummeted. So much so that some apartments, which were going for about $2000 per month, rent in certain areas, have now become available at 50% of that going rate. Regardless of which side of the fence you are one, whether as an owner investor or rental tenant indicates that the supply is so extensive that naturally such a correction or leveling out was bound to occur sooner or later. This type of market correction provides a lot of opportunities for people looking to rent, as well as for those that travel to Panama on business regular and even the tourist that may prefer to stay in an apartment as opposed to a hotel or resort, as this effectively provides some of the most cost effective accommodations regardless of term of stay within the country at the moment.

The oversupply of apartments for the rental market, has resulted in many a buyer that entered the market a little late to actually now consider selling their unit, as this oversupply naturally extends to the selling prices of the units that are now available. It seems that all remains relative within any real estate market regardless of where and which country it is situated in. There is a quarter calling for added benefits and initiatives for foreign investment into these widely available apartments to encourage a more stable growth and reduce, what some may term as the state of flux that appears to be occurring, however considering the current global scenario it may take a while before cycles return to ‘normal.’
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