Panama's real estate sector has long been a cornerstone of the country's economy. With its strategic location, economic stability and investor-friendly policies, Panama attracts expats and investors from all over the world. After the boom of the early 2000s and the pandemic stagnation, the market is now stable and expected to continue growing. This guide overviews real estate trends, key investment areas, property purchase procedures and financing options.
Panama's real estate market tendencies
Real estate is one of the key sectors of the Panamanian economy. Its importance to the country's economic well-being is hard to overestimate. The property market experienced an impressive uptrend in the first 15 years of this century. The sector entered the pandemic crisis with some stagnation already present, and in the following couple of years, homeowners watched their investment profits evaporate. However, the situation has stabilized, and the outlook is way brighter now. Many areas in Panama still represent the buyers' market, but the trend is changing.
In 2025, Panama's real estate market will likely experience robust expansion following the positive economic performance. The country's GDP is expected to grow between 3% and 6%. The International Monetary Fund foresees a , and Panama's Ministry of Economy and Finance projects a .
The industrial real estate sector remained stable despite reduced Panama Canal traffic caused by droughts in 2024. Vacancy rates have been decreasing, leading to an uptrend in rental prices.
Similar vacancy tendencies are observed in commercial properties. Vacancy has dropped to lower than pre-pandemic levels. Still, the prices remain low due to oversupply and the shift toward remote and hybrid work models.
The Federal Reserve's interest rate reductions at the end of 2024 can positively affect construction and real estate due to lower financing costs. However, Panamanian banks remain cautious about the construction sector.
The residential real estate market is on the rise, though trends vary by zone and segment. The demand in Panama City and major tourist and expat areas has increased, while the vacancy has somewhat reduced.
Numerous factors suggest an increase in property prices, including:
- Economic growth: The Panamanian economy is expected to grow in 2025, supported by several sectors such as logistics, finance and tourism;
- The Panama Canal: The expansion of the Panama Canal continues to boost the country's importance to international trade and increase demand for industrial, commercial and residential properties.
- Tax incentives, free trade zones and special economic regimes: Low property and capital gain taxes attract foreign buyers and foster price growth. Free trade zones and special economic regimes draw multinational companies thanks to their tax and labor benefits.
- Infrastructure projects: Metro expansion and new road developments increase accessibility and property prices in adjacent areas.
- Stable dollarized economy: Panama is one of the most economically stable countries in the region. This fact attracts expats from the U.S. and Europe who wish to relocate to a tropical setting, as well as investors from neighboring countries seeking greater security.
- Tourism and digital nomadism: The local government's efforts to promote tourism have increased vacation home purchases. Additionally, the global rise of remote work since the pandemic continues to attract foreigners who prefer working in sunny Panama, supporting demand for residential properties.
Key property investment areas in Panama
Real estate prices in Panama vary significantly depending on the location. Housing in the central districts of Panama City is more expensive than in its outskirts. Similarly, prices in provinces tend to be lower, though buying a property in some popular expat areas may put a strain on your wallet.
Panama City
Panama City is a finance and trade hub drawing expatriates and multinational companies. The residential real estate market has faced steady growth since the pandemic, although some areas have not recovered the pre-crisis prices.
Outside the city center, properties range from US$1,000 to US$2,000 per m², while in the center, they fluctuate between US$2,000 and 3,000.
Casco Viejo
A UNESCO World Heritage, this historical district of the capital is famous for its colonial architecture, vibrant culture, exquisite gastronomy and fun nightlife. This area has seen impressive growth. At the beginning of the 2000s, it was mainly unoccupied and featured only a couple of restaurants. Since then, many properties have been renovated, and real estate prices have gone through the roof. Investors who saw the potential of Casco Viejo 20 years ago have made significant profits.
Casco Viejo is one of the most expensive districts in Panama City, thanks to its prime location and historical value. The prices vary by project, with the average m² price around US$3500.
Santa Maria
Santa Maria is the capital's most exclusive and best-planned residential golf community. Located just outside Panama City, it offers prime properties ranging from US$2,500 to US$3,500 per m².
Costa del Este
Costa del Este is a prestigious neighborhood connected to the capital's center through Corredor Sur. Home to multinational companies' headquarters, high-end brand malls and luxury housing, this area attracts many expats. Its purchase prices range from US$2,000 to US$3000 per m².
Punta Pacifica, Punta Paitilla and Balboa Avenue
These districts overlooking the sea are popular due to their central location and accessibility. Apartment buildings in these areas give Panama its characteristic high-rise skyline and have modern amenities, including a gym, pool and concierge services. Property prices fluctuate between US$1,500 and US$3,000 per m².
San Francisco and Coco del Mar
San Francisco is the gastronomy mecca of Panama City, with new restaurants popping up throughout this trendy district. Restaurants, shops, cafes and offices mix with residential projects, priced around US$1,300 to $2,700 per m².
The neighboring Coco del Mar has gained momentum; its prices start around US$2,100 per m².
El Cangrejo
The hip neighborhood of El Cangrejo has recently gained popularity, attracting younger crowds with its vibrant nightlife, countless restaurants, hip bars and coffee shops. Its property prices range between US$1,500 and US$2,700 per m².
Real estate market in Panama's provinces
Coronado
Coronado is a beach town located about 1.5 hours from Panama City. Its developed infrastructure makes it a popular destination among retirees. Here, properties range from US$1,200 to US$2,500 per m² for apartments and US$150,000-US$1,000,000 for two- to three-bedroom houses. House prices depend on the lot size, amenities and proximity to the beach.
El Valle de Anton
A quaint mountain town situated in the crater of an inactive volcano, El Valle de Anton is home to a welcoming expat community and Panamanian high-society estates. House prices oscillate between US$350,000 and US$1,000,000 (two or three bedrooms) and depend on the location, lot size and amenities.
Boquete
Boquete, a small town in Chiriquà province's highlands, is a hotspot for retirees. This world-class coffee sport offers magnificent mountain views and properties costing around US$160,000-US$800,000 for two- to three-bedroom houses.
±Ê±ð»å²¹²õà and Playa Venao
Located on the Azuero Peninsula in the Pacific Ocean, these beach towns are home to large expat communities. While retirees tend to favor ±Ê±ð»å²¹²õà with its selection of houses, Playa Venao attracts younger expats and offers both houses and apartments. Properties range from US$200,000 to US$1,500,000 for two- to three-bedroom spaces, depending on the lot size, amenities and proximity to the beach.
Bocas del Toro
Paradisiacal islands of the Bocas del Toro archipelago are home to a diverse expat community: beach lovers, surfers and snorkeling enthusiasts. Bocas' property prices range from US$450,000 to US$800,000 for two- to three-bedroom houses. There are more land listings than finished houses here, so many expats buy a piece of land on one of the islands and build their own homes.
Buying a property in Panama
Foreigners can purchase real estate in Panama. The necessary documents for the transaction are:
- Passport or Panamanian residency card;
- Proof of income (if requested).
How to find property in Panama
Panama's property market offers many opportunities. A multi-level search is a wise move if you want to find the best deals. Start by scouting numerous websites dedicated to the country's real estate, including:
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Working with a real estate agency can be beneficial, as they know the ins and outs of the local market. In Panama, real estate brokers must be licensed, and most of them speak English.
To be on the safe side, find a reputable company with a long-standing presence in the Panamanian market. Additionally, you can verify if the broker is a member of the Panamanian Association of Real Estate Brokers and Developers.
Property acquisition in Panama
Due diligence
Conducting thorough due diligence is essential to verify ownership and ensure the property is free of liens, debts or legal disputes. Local lawyers are invaluable during this stage. Make sure you find a reputable professional to assist you with the purchase.
Sales purchase agreement
Once you have agreed on the terms and finalized due diligence, the seller's lawyer will prepare the sales purchase agreement (SPA) outlining the price, terms and payment schedule. The agreement can include both Spanish and English versions if you do not speak Spanish. The buyer transfers the deposit amount to the seller on the day of the SPA signature.
Public deed
The final step is to formalize the transaction by signing the deed before a notary. In Panama, the buyer prepares the final deed. The seller provides additional documentation on the signing day, and the buyer pays the remaining purchase amount. Afterward, the deed is registered with the Public Registry, and the buyer becomes the official owner of the property. In this country, the buyer's lawyer handles the registration process. If all documents are in order, the title is registered in the buyer's name within a week.
Property purchase costs in Panama
The seller is responsible for paying taxes for real estate transactions in Panama. To register the title transfer, the seller must pay 2% (of the purchase amount) for the transfer tax and 3% for the advance to the capital gain tax.
Legal fees vary by lawyer and property, ranging from US$1,500 to US$3,000 for properties valued at US$150,000-US$500,000. Title registration costs around US$200-US$300.
Property financing options for expats in Panama
Foreigners can get a mortgage in Panama, though local banks have tightened their requirements. Most banks ask foreigners to provide a larger down payment (around 30% to 50%) and proof of income. Currently, mortgage rates in Panama range from 6% to 8% and run up to 30 years. Loan amounts vary depending on the financial institution and the borrower's profile.
The country's permanent residents can benefit from the preferential interest rates for first-time home buyers. The government subsidy has a specific non-renewable term and varies by property price according to the following scale:
- US$45,000-US$80,000 - 4% for 10 years (nationwide);
- US$80,001 to US$120,000 - 4 % for 8 years (nationwide);
- US$120,001-US$150,000 - 2% for 5 years (Panama and Panama Oeste provinces);
- US$150,001-US$180,000 - 1.5% for 5 years (Panama and Panama Oeste provinces).
For example, if you want to buy a first-time home valued at US$130,000, and the reference mortgage rate is 6.25%, the government covers 2% for five years, leaving you to pay 4.25%.
These preferred mortgage rates are valid until December 2025 and may be revised afterward.
Takeaway
Panama's property market is a key sector of the local economy, attracting investors, retirees and expatriates from around the globe. Although market conditions have fluctuated over the years—from booming to crisis and eventual stabilization—the current trend is growth. The country's long-term appeal is driven by strategic location and investor-friendly policies. Key investment areas, from Panama City's high-end districts to coastal and mountain retreats, offer diverse options for buyers. Investing in Panamanian real estate can be rewarding with proper research, due diligence and professional guidance.
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