Register

Create a user account to save your favorite homes.


Login

Lost your password?

Login

Lost your password?

Forgot Password


Still having trouble? Contact support

New Password



Still having trouble? Contact support

 
Strong Mid-Year Numbers for Panama’s Economy

Panama Equity’s Take on “The Papers”

By in Blog with 4 Comments

All signs point to the fact that Panama is about to clean up its act in a big way thanks to the release of last month’s Panama Papers, which revealed mischievous ongoing amidst one of Panama’s most recognizable law firms, Mossack and Fonseca. In the short term, we may see some collateral damage in the form of local banks, law firms, and brokerages being forced to either close or consolidate.  Plus, it’s been a pretty serious sucker punch to Panama’s reputation.

Long term, Panama is still poised for major growth with some very strong macro-economic foundations and estimates that I’ve seen of the “Offshore Company Set-up Business” touted as small as 1.9% of a $47 Billion GDP economy…a blip on the radar.

It’s important to remember that Panama has an enviably stable banking sector (that avoided the last financial crisis) with $90 Billion in capital, largely a result of 10 years of 8% plus annual growth (with ratings agency Fitch predicting, post-Panama Papers, another 6% growth this year).  Add to that a growing middle class, a shrinking poverty line, and a super healthy debt to GDP ratio that can finance infrastructure and social welfare projects galore.

Once the dust settles, the Panama Papers are great news for anyone who is long on Panama and understands that greater transparency means more investor confidence and ultimately more growth.

And what about Panama’s“hot” real estate market? Are we looking at a massive selloff of properties currently held by offshore corporations?  Not likely, as most of the offshore corporation holders are not even in Panama. But realistically, global headline scandals aren’t “Demand” generators usually, and on the “Supply” side there could be some fallout in the real estate market depending on who’s got issues.

Savvy investors should be ready for possible fire sale opportunities as they come up. 

And just as a reminder, the good old Panama Canal’s been here as a strategic asset for over 100 years, and it’s about to double in size. It’s still an average of 30 degrees Celsius year round and a 2 and a half hour flight to Miami.  So as long as global retirees and young adventurers are looking for safe, low cost of living and a great warm weather lifestyle, Panama prevails.

Don’t worry too long about us!

About The Author

Kent Davis, founder and Managing Director at Panama Equity real estate, has been widely quoted in publications such as Wall Street Journal, Time Magazine, The Miami Herald and the Financial Times for his unabashed views on the Panama real estate market. Panama Equity is regarded as one of the most active real estate agencies in Panama and Kent’s articles, reports, and market research projects have been syndicated by press agencies including Bloomberg and the Associated Press.   Connect with the Author via: Email | LinkedIn | Facebook | Google+

4 Comments

  1. Chuck says:

    The irony is that the overwhelming majority of entities, structures, etc. that were revealed were entirely legal. This is just the powers that be putting the pressure on offshore services in general. It was just Panama’s turn this time. I’m getting ready to open a bank account there. I hope the bank I’m using isn’t affected by this.

    • Kent Davis says:

      Chuck, the worst part is Panama’s been cleaning up their act for the last two years…it was just “our turn” as you put it! Opening up a bank account shouldnt be an issue, just make sure to bring down everything you’ll need (tax filings, letter from 2 current banks, employment status verification, etc). They’ll probably have a few more required docs, so be prepared to be patient!

  2. mark says:

    well said ! good conclusion

Leave a Reply

Your email address will not be published. Required fields are marked *