IL Postcard

As Things Go South in the U.S., Maybe You Should, too

Date: 07/29/2008

July 30, 2008
Panama City, Panama

Dear Panama Enthusiast,

The rising cost of fuel has caused the price of everything from gas to food to go up all around the world…including in Panama. Even so, the economy here continues to grow at light speed. In 2007 Panama had a banner year—real GDP growth was 11.2%, the highest rate among all Latin American and Caribbean countries. According to the United Nations’ Economist Intelligence Unit, Panama is currently the world’s second-fastest growing economy, after China.

And despite much heated debate over the impending (or not) demise of Panama's real estate and construction boom, property prices are on the rise and people continue to buy. In some areas, property owners have seen increases of 57% in property value, according to a report published in La Prensa. In fact, in the fast-growing Arraijan district just outside Panama City, building permits for the first five months of 2008 show new construction values are 182% more than in the same period last year.

And yet you can still find high-value, low cost property in Arraijan. For example, a half-acre lot in the sector known as Nuevo Arraijan is on offer for $25,000. A three-bedroom house in the Cerro Tigre neighborhood can be yours for $50,000.

In the "interior," or rural Panama, the La Prensa report says increases in new construction value average around 33%, but still prices remain impressively low. Two areas in particular have caught our attention, and we’ll be covering them in Panama Insider in the very near future.

In one of these towns, for example, we uncovered an upscale development where a two-story, three-bedroom home is $78,000. We tell all in the August issue of Panama Insider.

As for whether the real estate bubble is about to burst…all things are cyclical and it can't last forever…but local experts say "not yet." According to the Panama Construction Chamber (CAPAC), the construction industry grew 19.6% last year (the most Panama has ever seen) and in January and February 2008, the government approved construction permits valued at $1.2 million—72.3% more than in the same period last year. CAPAC President Walter Medrano says, “Definitely the demand exists, among both locals and foreigners."

Thanks for reading,

Jessica Ramesch
Editor, Panama Insider

P.S. Can't leave the U.S. right now? Meet us in Long Beach, Calif., for our only stateside event of the year, the Live and Invest Overseas Conference. From Oct. 3–5, we'll reveal six “Pockets of Prosperity”… special destinations scattered around the world where you can turn this recession into an era of profit and pleasure for you and your family. Save a place for yourself before midnight, Aug. 8, and you'll be entitled to a $200 early bird discount. By the way, Panama Insiders are entitled to an additional $100 savings…that's $300 off if you subscribe to Panama Insider !