Country Article / Postcards

Panama City Think Tank Debates Condo Crisis

Date: 06/15/2006

Dear International Living Reader,

For decades, the world's interest in Panama was restricted to the country's trans-continental canal, the most efficient way to transverse the east and west coasts of the Americas. No more. Today, Panama is a country increasingly known for its banking services and retiree benefits programs. It's making a name for itself internationally not only as an offshore and a retirement haven...but also for its low cost of living, stable government, and sunny weather. Tourism numbers are up, discussions progress on expanding the canal to allow for 21st-century cargo carriers, and the economy is recovering from the exodus of the 50,000 Americans formerly based in the Canal Zone.

A complete renovation and expansion of the international airport is under way to accommodate the continued air traffic growth to this country. Panama is today not only the crossroads between the Atlantic and Pacific oceans, but it is also the major and most efficient air travel hub for all Latin America. In other words, Panama isn’t relying on North Americans alone for future economic expansion.

As a result, interest in Panama's real estate market from not only North, but also South Americans seems to continue to grow at a remarkable pace.

There's a potential danger for Panama City's apartment market, however, which can be expressed by quoting a recent statistic: While there are currently 121 high-rise buildings in Panama City, more than 100 additional high-rises are either under construction or already have been granted planning permission to begin construction. The question we've been asking each other here in the International Living offices is: Can the market absorb all these new condo and apartment units? The answer depends on many related issues--including plans for the expansion of the canal and the growth of the local Panamanian market, as well as continued interest from investors and retirees abroad.

We don't have answers to all these questions...but we know some people who ought to be able to get us thinking in the right direction. I'm getting our key Panama City contacts together, therefore, for a conference call to talk through the issues and the implications. I'd like to invite you to join us.

I'll be moderating a Teleconference addressing the subject "The Future of the Panama City Property Market" on June 29. On the line with me will be Jose Bern, a leading player in this country's real estate industry, an executive with Empresas Bern, one of the biggest development companies in Panama City. Jose will specifically address the effects of all the new and ongoing construction on the Panama City property market, as well as the changes he is seeing in the types of products being created to meet new demand from foreigners and retirees.

Also on the call will be our legal counsel in the country, Rainelda Mata-Kelly, who has helped many of us here at International Living personally, as well as, over the past six years, hundreds of International Living readers with real estate purchases, visas, and other Panama legal issues. Among other things, Rainelda will speak to Panama's current 20-year property tax exemption. How does it work...and will it be permanently repealed, as some talk suggests?

In addition, the Minister of Trade, Julio Fabrega, will join us to discuss the implications he foresees from the current construction boom both on the economy and the country's position as a foreign retirement haven. Julio will also speak to the impact the property boom is having on the city and its infrastructure.

Finally, we'll be joined by Jose Talor, vice president of sales and distribution for Banistmo Bank, who will address issues related to banking and mortgage financing in this country.

This will be an insider conversation among serious players in this market. I feel privileged, as one already invested in the Panama City market and with ongoing business interests in the country, to be able to be on the line with these professionals, and I very much appreciate their making time in their schedules to participate. I realize that, ordinarily, I'd have to invest a considerable amount of both time and money to gain the kinds of behind-the-scenes insights this group will share during the hour we'll be on the phone together later this month.

As I mentioned, you're invited to join us. Our Events Team is making it possible for a number of International Living readers to be on the line to listen while these four key members of Panama's real estate market share their views on prospects for this market in the context of its current construction boom. The cost is a nominal $14.95. Roundtable and Lifetime Society members are invited to join us as our guests (that is, free of charge). And subscribers to the print edition of International Living pay only $9.95. Full details for how to participate will be e-mailed in advance to every reader who registers. And the entire Teleconference will be recorded so that registered readers who can't dial in at the appointed hour can listen to the conversation at their convenience.

You can register online now. Then mark the date, June 29, at 1 p.m. EST, on your calendar. I'll look forward to speaking with you then...and, along with you, to hearing what our distinguished panel has to say.

Regards,

Lief Simon
Real Estate Editor, International Living