March 2015 Panama Real Estate Update
Property prices are up on residential real estate in Panama City, Panama compared to 2014. However, new construction starts and disparate pricing are having a negative impact on existing inventory in 2015.
Days-on-market for the first quarter of 2015 have increased from 90 days in Q4, 2014 to roughly 120 days in Q1, 2015. The pricing run up in 2014 in certain areas hit the double digits, and buyers are starting to second guess prices in Panama City, Panama’s top areas including Punta Pacifica and Balboa Avenue, where some sellers are trying to achieve prices crossing the threshold of $3,000/m2 — levels never seen in the market before except in certain exceptions (most notably the Trump Ocean Club).
New construction in the Santa Maria area continues to hold the highest price per square meter in the city ($3,250 list and at or just under $3,000 sell) with front-line, high-end Costa del Este apartments achieving just under the $2,800/meter mark on final sales prices.
Because there is no single, definitive multiple listing service in Panama, property owners in a period of appreciation tend to overprice properties based on what their neighbors have listed for, causing prices to increase in a disparate manner. This often causes buyers to second guess a purchase decision, causing supply to remain stagnant and market forces to eventually drive down price levels to a more realistic middle ground.
New construction pricing in the city-center (while it varies by neighborhood, amenities offered, and level of finishes) is generally being priced between $1,750/meter in an area like San Francisco to as high as $3,000/meter in areas such as Calle 50. Based on the variance of published price lists from one month to the next, an estimate on absorption depending on the project (and the stage at which it’s in) is between 0-8 units sold per month.