The rate of Panama housing construction for the first half of 2014 has increased nearly one-third compared with the same period in 2013. Apartment construction increased 27%, house construction 30%, according to the Department of Statistics and Census.
In September, 845 new structures, additions, or repairs were undertaken, valuing US$195.3 million. This represents an increase of US$63.2 million over August. Of the 845 projects, 801 were residential, totaling about US$165 million.
The average residential project value is US$206,000. This amount indicates that many of the units are being built for the local middle-class market instead of foreign higher-end clients. Until recently, Panama’s residential real estate market has been saturated with higher-end properties. The emergence of a sizable middle class in Panama has brought about an increased demand for mid-range prices.
The municipality of La Chorrera is seeing the biggest growth in new construction, accounting for 353 of the projects.
Real estate prices in Panama have been recovering from drops in the wake of by the 2007-2008 global financial downturn. After dropping as much as 40% from 2008 to 2012, residential property prices rose 10% in 2013. This increase has continued in 2014 and is expected to continue in 2015.
The restored strength of Panama’s real estate market has been fueled by continued economic growth. For 2014, Panama’s GDP growth is expected to reach 7% thanks largely to revenue from the Panama Canal and the quickly growing tourism industry.
To keep up with the infrastructural demands of growth, massive public projects have been undertaken in recent years. These include the expansion of the Panama Canal, the continued construction of a state-of-the-art metro system, upgrades to Panama City’s international airport and the Pan-American Highway, the new international airport built at Rio Hato, as well as planned upgrades for the run-down port-town of Colon.
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