It could be the year round spring time mountain temperatures or the equatorial conditions found on the beaches but, for the most part, it is the economic conditions found in Panama that have brought real estate investors calling. Particularly in Panama City, real estate speculators are busily going about plans for high rise condominium/casino/resort projects. A consortium of European developers has a 93 floor building going up and Donald Trump has plans for a resort/condominium project on the boards.
In more recent times, Costa Rica was the “it destination” in the region. Vacationers from around the world were flocking to the country for the beautiful beaches and relatively stable political and economic conditions. The problem was/is that there was relatively little buying of real estate going on in the country. The country appeared to get stuck in a destination vacation mentality. Panama, however, has developed in such a way, with help from history and the United States that longer term real estate development has become a lucrative option since the handover of the canal in 2000.
Generally, Panamas time for world recognition, as a development and destination country, was just a matter of time. Developers had a past perception of instability where there was none. The country just needed to be recognized as an opportunity and, now it has been.
Blame it on the canal
Location and circumstance are the real reasons for the eventual rise of Panama. It was just a matter of time until the full resources of a modern world could take advantage. Before construction of the Panama Canal the region was mostly a haven for mosquitoes and Yellow Fever. With the beginning of the canal this issue was resolved and thousands of Americans began flooding into the “Canal Zone” for construction, security and administrative jobs. With political agreements in place, these Americans, in one form or another, never really left.
What they ultimately left behind, after a few false starts by the new Panamanian government, was a sometimes called United States of Panama. In many respects, some of the remnants of the American culture surpass the true American original. Healthcare is inexpensive, economic growth runs just a bit higher than the US and crime is quite a bit less than the general perception.
Retirement fueling real estate growth
Although general business is helping to fuel Panamas growth, its true recognition on the world real estate stage is coming from United States and European retirees. The initial real estate boom has largely been fueled by retirement communities located in the mountains and, to a degree, in gated golf communities closer to the coasts.
In the past, these retirees may have had a certain perception of Panama. Now those perceptions have changed as they visit for holiday and decide to stay. Local foods, American style shopping, a relaxed pace, easy transportation and lower prices all make for a near perfect retirement location if an international option is desired. Perhaps two of the largest benefits are that there is quality medical care that costs substantially less than in the United States and that the English language is just as prevalent as Spanish.
As Donald Trump and others go about their building activities the economy is running right along side to fill the buildings that are being constructed. Panama has slowly gotten its economic base under control after some rocky missteps. In todays economy, the country is known as a transit point, not only for goods but also for services. In many respects, Panama has become a cross roads for the world. The job of getting the country up to full speed is far from complete but the work is progressing nicely.
There are two main areas that the country is working diligently on so that the overall economy can maintain its solid annual growth. These two areas are shipping and trans-shipping and communications. Again, owing to the canal shipping is one of the countrys main revenue generators. Year over year growth has been occurring and is expected to be maintained into the foreseeable future. To maintain this pace, and keep pace with escalating ship sizes, a program to increase the size of the canals locks and channels has begun. Currently, there is a very large market waiting in this area as is the current market for getting through the canal.
A natural off-shoot of the canal is the trans-shipping and warehousing of goods. This segment of the shipping market continues to grow and recognizes Panamas importance as a gateway to South Americas large economies of Chile and Brazil.
In this recognition Panama is a member of the World Trade Organization, a benefit recipient of the Caribbean Basin Initiative and is in current talks for free trade status with a number of countries. With each agreement real estate will be a leading beneficiary and continue to drive development.
Another contributor to Panamas growth is its location and communications. There are several land portals that use Panama as a central switching location for South American traffic. Quite a few telecommunications companies have recognized Panamas opportunities and applied for licenses. So as not to be overrun by these companies Panamas leaders are carefully addressing each step. The government does not appear to be dragging its feet, so-to-speak, but they are being careful. The opportunities are enormous not only for switching opportunities but for services such as high speed internet and VOIP.
Currently, internet opportunities are under served as the government sorts out, broadband type services, computer to phone and other longer range possibilities. They want to be future looking as they make their decisions now. One interesting statistic remains, however, only 12 percent of homes have telephones.
Looking to the near future
As world real estate executives, travel agents and business in general looks at Panama, and Panama City in particular, the question remains, what will happen next? Real estate executives are diving in head first and see only profits in all sectors, Travel agents are seeing retirees looking for cool mountains and hot beaches and business is chomping at the bit for a bit more technology infrastructure. There are certain tipping points along the growth spectrum and it appears that Panama is near one, in one form or another. Today, however, life is good in almost every respect in Panama.