“How can there be such a hotel shortage in a city with so much new construction?”
“All the buildings you see going up everywhere are condo towers,” I explained. “Many of them are coming online right now, but they’re residential units.”
“Can there be buyers for all these units?” asked the reader we met for drinks here in Panama City last evening.
“Most have already been bought. They were purchased pre-construction a year or two ago. Finally, they’re being delivered.”
“Won’t this glut of supply sour the market?”
“Well, the Panama City sales market has already softened considerably. Prices have leveled, and apartments aren’t selling in a matter of a few weeks or months, as they were a year ago. Prices will fall. Meantime, sellers are more negotiable than they’ve been in years.
“But this market won’t collapse, as others around the world are.”
“Right,” Lief interjected. “People think that, because the bottom has fallen out of the U.S. market, all markets in this part of the world are done for. Yes, of course, what’s going on in the States has an effect throughout this region. But a varying effect. And Panama will be perhaps least fazed by the U.S. troubles and the global meltdown. Because, like the tourism market in Panama, the real estate market in this country is only partly made by Americans.
“Plus, frankly, people need someplace to put their money,” Lief continued. “An enormous amount of wealth has disappeared over the past 12 months…but that is not to say that nobody anywhere has any money, period.
“In this part of the world, if you’ve got money, Panama is one place you park it. The flight of capital right now from Venezuela and Colombia, for example, into Panama, is a big and growing market force. A friend in the real estate business told me about a call he received from a Venezuelan business owner.
“‘I need 50 apartments,’ the guy said. ‘And I need them now. I don’t want pre-construction. I want to move my 50 top executives from Venezuela to Panama, and I need places for their families to live.'”
“You know, in fact, I can attest to the Venezuelan interest in this market from personal experience,” said our reader-friend. “I had an apartment on avenida Balboa that I sold last year. The buyer was a Venezuelan woman. She bought sight-unseen. And she didn’t put the place into the rental pool after she bought it. As far as I know, it’s sitting empty. She so much didn’t care about hassling with renting out or managing the place. She just wanted to put her capital into something in Panama City.”
Venezuelans, Colombians, Argentines…and Europeans, too. For centuries, people have sought out this strip of land connecting North to South America. It’s been a trading hub of international significance since its earliest days, in the early 1500s.
Panama is and always has been a melting pot. Our little Panama City office team includes a Colombian, a Canadian, a Russian, a German, and we three Americans…
Today, it’s not only trade that’s bringing people from all over the world to these shores. As Lief suggested in our conversation with our reader-friend last night, it’s also a flight to safety. This country has real advantages. It offers hard assets at a time when people are, rightly, suspicious of paper assets.
And at a time when other countries around the world are in turmoil.
Here in Panama, it’s business as usual. And the business of Panama is growth.
“Kathleen, I just left a real estate office where I was talking about banking in South America and how you talk it up as being so safe. The agent I was visiting with said that she was raised in Brazil and that you never kept your money in a local bank, because the government could take whatever money was in in-country bank accounts whenever they wanted.
“So I am curious now. If I decided to settle in, say, Belize, would I be safe to have my civil service retirement sent straight to a bank there or should I keep it in a Stateside bank and only transfer what is needed at the time? This would also apply if I decided to live in Panama or Costa Rica. I am doing a lot of reading about South America, but when a local who has lived down there tells you something like this, you begin to wonder.”
— Dennis C., United States
Your Brazilian real estate agent is right. Wealthy Brazilians don’t keep much money in local banks. Neither do wealthy Colombians, Argentineans, Nicaraguans, or Venezuelans. They keep most of their wealth outside their home countries.
One of the places they put it is Panama. Panama is one of the world’s top banking havens.
Belize, too, can make sense as a place to park deposits. Belize, like Panama, has a stable government and strict banking laws that protect the depositors and the banks.
To answer your question directly, I think you’d be fine to have your retirement pension deposited into a bank in Belize…or Panama. Beyond these two countries, which, again, have strong banking industries and solid banking laws, you might keep on deposit in a local bank only as much money as you need to live on.
“Kathleen, as someone who frequently travels to Ecuador and who has family there, I think you made some good points about the upsides and the downsides to placing that country on a ‘Top 10 list.’ However, in using Quito as an example, in my opinion, you overlooked a part of the country that has far more pros than cons.
“I recommend the Salinas area, where one doesn’t sacrifice infrastructure for low prices. Getting there is easy. It’s about an hour-and-a-half drive from the international airport in Guayaquil on the best road in the country–a perfectly paved, new highway.
“The greater Salinas area is home to several hundred thousand people. All the main roads are paved. It is not polluted, has a brand new hospital, a mall, many restaurants, several grocery stores, and reliable municipal utilities, including cable TV and broadband Internet.
“Real estate prices remain low. It is possible to get a condo in a beachfront development for around US$50,000.
“As you pointed out, the best option is to visit for oneself. I believe readers looking for affordable beachfront property, low cost of living, and good infrastructure will be pleasantly surprised by Salinas.” — Amy P., United States