Foreign Investment and Panama Real Estate
Foreign investment in Panama as a percentage of Gross National Product continues to top other Latin American countries. Over the last ten years a flood of North American’s has come to Panama to visit, buy second homes, and/or retire. The low cost of Panama real estate as well as Panama’s mature service sector, and Panama’s great natural beauty have attracted real estate buyers and investors. Panama’s ranking in foreign investment is a good clue that Panama will continue to grow and that real estate investment
Foreign investment in Panama as a percentage of Gross National Product continues to top other Latin American countries. La Prensa, Panama, quotes figures from the United Nations’ Economic Committee for Latin America and the Caribbean in a May 5, 2008 article. Panama does well for a small country in foreign investment. This high level of foreign investment is an indication of Panama’s economy and growth potential. Potential Panama real estate investors can take notice of the continuing growth and development in Panama.
Panama is a tropical country of 3.3 million connecting North and South America. Panama has a unique combination of untouched natural resources and a developed infrastructure. Panama is in the midst of an economic boom. As the site of the Panama Canal, Panama sits astride a major world trade route. Panama’s strong service sector includes the operation of the Panama Canal, many international and local banks, the Colon Free Zone, a strong insurance industry, container ports, flagship registry, and tourism.
Over the last ten years a flood of North American’s has come to Panama to visit, buy second homes, and/or retire. The low cost of Panama real estate as well as Panama’s mature service sector, and Panama’s great natural beauty have attracted real estate buyers and investors. Panama’s easy residency requirements have encouraged many to live in Panama full time.
The large number of North Americans, wealthy by Panamanian standards, has helped fuel Panama’s housing boom, including the many high rises that line the Bay of Panama in Panama City. For those interested in investing in Panama, especially Panama real estate, a look at foreign investment figures is encouraging.
A May 5, 2008 article in La Prensa, Panama, states that, “Foreign investment as percentage of GDP [in Panama] is high. For the second consecutive year, Panama ranked first in foreign investment in Latin America in relation to its gross domestic product (GDP), according to a report published yesterday by the United Nation's Economic Committee for Latin America and the Caribbean (ECLAC).
“The $1.8 billion USD Panama received in foreign investment in 2007 represents 10.5 percent of the country's GDP. That figure puts Panama ahead of such countries as Brazil, Mexico and Chile, although those [larger] nations lead the rankings in absolute terms.
“The important thing is to see where that investment is going. If it's in new businesses, it's going to generate more work and greater use of our natural resources, which is good news,” said Rolando Gordón, a professor on the economics faculty at the Universidad de Panamá. “We need a transfer of technology, which creates jobs and makes use of national inputs for production,” Gordón added. If those elements are in place, they “support the economic development of the country.”
Investment in Panama real estate, especially commercial real estate, has paid handsome returns over the last ten years. With financial difficulties throughout the world Panama remains a growth opportunity. The banking community is Panama has and remains fairly conservative so there is no “sub prime” crisis in Panama.
In addition, Panama’s thriving economy is not upon North American retirees. A much large portion of the housing boom is based upon Panama’s increasing prosperity and a farsighted government approach of subsidizing low cost mortgages getting more and more Panamanians into their own homes.
Commercial real estate is especially attractive in Panama as commercial real estate does not have rent controls such as low cost apartments do. Also, commercial real estate ties more closely into Panama’s thriving economy than does the “retirement” housing market.
Panama’s ranking in foreign investment is a good clue that Panama will continue to grow and that real estate investment in Panama will continue to prosper.
If you are interested in real estate investment in Panama come to see us at ABPanama. We have over 23 years experience managing real estate portfolios and do business throughout the country.
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