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Panama City Is A Top Property Investment Market For 2016

The Two Top Property Investment Markets For 2016, Part 2

We’ve been telling you to take a close look at what Medellín, Colombia, has to offer for seven years. Today, we’re more bullish on this real estate investment market than ever.

Our second top recommendation for property investment in 2016 is, likewise, one we’ve been making for many years: Panama City, Panama, where, again, current fundamentals and prospects are stronger than they’ve been in all the time we’ve been endorsing this market.

Panama City, Panama: A Longtime Favorite Market Sees Even Better Times Ahead

Why We Like It:

Panama City is a physical hub for air travelers, as well as a world financial and economic hub. It’s just a short trip from here to the United States, with good connections throughout North America.

The city is modern and cosmopolitan with more than its share of gleaming high-rises in the forms of office buildings, hotels, and condo towers.

Panama City also has a good selection of restaurants from around the world. Whether you want a barbecue burger or Indian cuisine, you’ll find it here. You’ll also find many of the familiar products and stores that you’re used to seeing back home.

In Panama City there’s no need to “do without.”

Panama City also has a large, well-established expat community, and there’s a good amount of English spoken by Panamanians, who are accustomed to English-speakers among them, thanks to the many years of U.S. presence.

Why You Should Invest:

Panama has been the economic star of Latin America for years, with enviable unemployment rates, good budget performance, and low debt. The income provided by the Panama Canal has been a solid and generous source of revenue for a long time.

This year, the long-awaited canal expansion project is scheduled to be completed.

The Panama Canal Authority estimates that the expansion will result in an eightfold increase in revenues. I’ve also seen estimates that it will double Panama’s GDP within 10 years. Whether or not these numbers pan out, I am confident that the increased revenue from the canal will inject even more money into an already-solid economy.

You might worry about the economic impact of all those canal workers being laid off when the canal is finished. But most believe that the impact, if there is any at all, will be minimal. The expanded canal will require more permanent employees to operate it. In addition, and more significantly, the government has a number of other large public-works projects under way (line 2 of the city metro system, for example, and the rejuvenation projects being undertaken in the city of Colón) that should provide enough jobs to keep most current canal expansion workers employed.

Panama is a dollar-based country, so there’s no chance of a currency bargain (as U.S. dollar holders enjoy in Colombia right now, for example). On the other hand, you don’t have to worry about the currency moving against you in the future, either.

I don’t think that property prices across the country are going to jump up as soon as the canal is finished. However, I do think that Panama will carry on as an even more appealing island of economic stability in an era of devaluations, negative interest rates, and money printing.

In addition, while a canal factor spike is unlikely, I do believe Panama City’s property values will appreciate nicely in 2016.

Here, my favorite areas are along Balboa Avenue and in Punta Pacifica. Anything bought in these districts will appreciate in value short- and mid-term, will hold value long-term, and will generate a good rental yield all along.

Lee Harrison
Editor, Overseas Property Alert

 

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