Should You Invest?
Though still a relatively new market for international
investors, Panama's economy has developed quickly, and
prices for both land and real estate are higher than many buyers
may expect. Tax-free status for income earned overseas, beautiful
beaches and a growing economy have all contributed to the country's
success. Panama appeals to investors for a number of reasons:
- There are very low transaction costs when purchasing a
property.
- Rental income tax is charged at moderate rates.
- There are high rental yields, especially in popular tourist
areas such as Panama City, which provides a good investment
for those looking to buy into a buy-to-let market.
- Buyers have a five to twenty year amnesty before having to pay
any property taxes, depending on when construction permits on the
property were awarded.
- The government has introduced new retirement schemes to attract
more long term foreign investors.
- Major infrastructure development plans have been put into place
by the government to improve living standards and increase tourist
potential.
Rental Yields
The buy-to-let market in Panama is the main money making scheme
in the real estate market with rents rising an average 12%
annually. Rental yields in Panama are very good at the moment
and you can expect yields between 8% to 12.5% for houses in
and around the city. Along the coastal front, yields
are higher - up to 15% for 80 sq m properties, and 7.2% to 11%
for other sized real estate. Outside the city in areas such as the
Pacific mountain region, property prices are more expensive and
yields can reach around 5%.
location
type of
property |
size
(m2) |
average
price
to buy
(us$) |
cost per
m2 to buy
(us$) |
average
price
to rent
(us$) |
cost per
m2 to rent
(us$) |
yield
(%) |
Panama City-
Apartments/Condos |
|
|
|
|
|
|
| |
120 |
197,400 |
1,645 |
1,790 |
14.9 |
10.88 |
| |
190 |
274,170 |
1,443 |
2,567 |
13.5 |
11.23 |
| |
260 |
439,660 |
1,691 |
3,390 |
13.0 |
9.25 |
| |
330 |
607,860 |
1,842 |
4,679 |
14.2 |
9.24 |
| |
565 |
1,046,380 |
1,852 |
6,238 |
11.0 |
7.15 |
Coastal Areas-
Houses w/grounds |
|
|
|
|
|
|
| |
150 |
179,550 |
1,197 |
- |
- |
- |
| |
250 |
275,500 |
1,102 |
- |
- |
- |
| |
350 |
535,850 |
1,531 |
- |
- |
- |
| |
650 |
1,178,450 |
1,813 |
- |
- |
- |
Source:
Global Property Guide
Price History
Due to the canal and foreign business interests in the country,
Panama has always been a bit of an anomaly in South America. Prices
here have not been low, by European standards for some time, and
they have risen by 25% per annum over the past three years.
Costs of property now ranges from around $1,000 to over $3,000 per
square metre, depending on the size of the property and its
location. The mountain, coastal and city areas are very popular
with investors and tourists alike and all have a good rental
market. Property prices in Panama are growing steadily ahead of
other countries in the region.
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