In the summer of 1997, I got a phone call in my office in Baltimore.
It was my global property scout of the time, Bob Fordi. Bob had just returned from his first visit to Panama City.
“One of the biggest investment opportunities of our lifetimes is shaping up in this city right now,” Bob told me.
“When the United States turns over control of the Panama Canal to the Panamanians and the U.S. military pulls out of Panama, a recession will follow.
“Onto this depressed market will come, overnight, an enormous volume of inventory—all the real estate being left behind in the wake of the Americans.
“And it will all be a screaming bargain.
“I toured officer housing—200- and 300-square-meter properties—that are expected to go up for sale for US$20,000 or US$25,000.
“You need to get down to Panama to see for yourself as soon as possible. This place is going to explode.”
Shortly after that call, I made my first trip to Panama City. I toured the barracks and the VIP officer homes of Howard and Albrook military bases, as well as key neighborhoods such as Paitilla, La Cresta, and Altos de Golf. And I was introduced to the colonial treasures of Casco Viejo…
I was as impressed by the potential of it all as Bob had been.
Long-suffering readers are familiar with the rest of the story. Fast forward to today, Lief and I have been recommending Panama for retirement and investment for more than two decades and living and running the Live and Invest Overseas business in Panama City for more than 11 years.
I write this morning from the dining table of the Avenida Balboa apartment that Lief and I bought in 2003. For years, we rented the place out… earning as much as 15% net per annum. Now that we’re empty-nesters, we’ve taken the one-bedroom loft unit off the rental market and use it as our base when we’re in town.
The view outside the window is nothing like the scene I remember from my first visit to this city more than 20 years ago.
Bob Fordi’s prophesy has played out even more spectacularly than he imagined. Over the past two decades, Panama City has, indeed, presented one of the greatest investment opportunities of our lifetimes.
But what about today? Is it too late to take a seat at this table?
Nope. Boomtown Panama booms on.
During this week’s Live and Invest in Panama Conference, we reminded everyone in the room (and ourselves) just how rosy this picture continues to be.
Over the past 15 years, Panama has been the fastest-growing economy in Latin America, averaging growth of 8.4% between 2004 and 2013, including 4% in 2009, the year economies elsewhere in the region collapsed.
The Panamanian economy is projected to grow at a further 6.3% in 2019.
What’s behind all this?
The Panama Canal. It’s been a cash machine for the country since they took possession from the Americans in 1999. One-way passage today costs US$250,000 to US$1.2 million per vessel, and the Canal operates 24 hours a day, 7 days a week.
Looking out the window to my left, I see the usual line of tankers and freighters in the Bay of Panama waiting their turns to make the crossing. I’ve counted as many as 40 ships at a time in this ever-present queue.
All that Canal cash is spread around the country in the form of infrastructure projects the likes of which other countries in this part of the world can only dream about.
Right now, for example, Panama is investing in:
- An eight-line metro for Panama City… lines one and two are already operating…
- A US$780-million airport expansion that will double the capacity at Tocumen International…
- A fourth bridge across the Panama Canal to improve access for the thousands who commute back and forth across the Canal to work each day…
- A US$165-million cruise port terminal at Amador that will mean an additional 600,000 tourists in Panama City each year…
- A cross-country train from Panama City to David…
Listening to presenter after presenter during this week’s conference in Panama City, you got the impression that the past 20 years have just been warm-up… and that Panama’s only really now getting started.
What does it all mean for you?