Latin America

Here’s Why the Panama Property Market Is Poised for Growth

Known as the "Hub of the Americas," Panama has demonstrated a remarkable ability to withstand economic challenges, underpinned by its strategic geographical position and robust economic policies.

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The property market in Panama stands on the cusp of significant growth, buoyed by an economy that continues to outperform its regional counterparts. A strong economic outlook—characterised by impressive GDP growth projections—and a steady recovery in the real estate sector positions Panama as an attractive destination for investors and a model of stability in an otherwise turbulent global market.

We explore the factors putting the Panama property market on a strong growth trajectory.

Economic Growth Predictions

Panama’s economy experienced an exceptional 9% GDP increase in 2022.

Different forecasts have projected substantial growth rates for the coming year. Fitch Ratings anticipates a 4.5% growth, while the Economic Commission for Latin America and the Caribbean estimates a slightly lower rate at 4.2%. However, Panama’s government has raised its forecast even higher, expecting at least 6% growth in 2023. These projections place Panama among the top performers in the region, underlining its economic resilience and almost recession-proof nature.

Panama’s strategic location as a connecting point between North and South America plays a pivotal role in its economic success. The Panama Canal, one of the world’s most crucial shipping routes, significantly contributes to the country’s economy by facilitating international trade. Ongoing infrastructure development, including expansions of the Panama Canal and upgrades to the country’s transportation and logistics infrastructure, has spurred economic growth.

However, the country has also been working towards diversifying its economy to reduce reliance on the Canal and traditional sectors. Efforts in areas such as renewable energy, technology, and manufacturing are aimed at creating a more resilient and diverse economic landscape.

Panama has been successful in attracting foreign investment, thanks in part to its stable political environment and investment-friendly policies. The country’s use of the U.S. dollar as its currency also adds to its economic stability and attractiveness to foreign investors. Furthermore, Panama has multiple trade agreements, including a Free Trade Agreement with the United States, which boosts its trade relations and economic growth.

With economic resilience setting the backdrop to its real estate sector, Panama offers an exciting opportunity to investors.

The Property Market in Panama

The real estate market in Panama has shown resilience in the face of global challenges. After the pandemic’s impact in 2020, real estate prices in Panama were largely maintained at the same level during 2021 and 2022. In 2023, the value of the country’s real estate market is expected to reach US $179.70bn.

And rental rates are climbing. According to Numbeo, rental properties in Panama offer gross rental yields ranging from 6.8% to 9%, depending on location.

Looking further ahead, the real estate market in Panama is projected to grow by 1.50% from 2023 to 2028. By the end of this period, the market volume is expected to reach approximately US $251.60 billion. This growth forecast suggests a steady increase in the value and demand of real estate in Panama over the next few years.

As a country which has shown economic resilience where others have seen slowdowns, Panama is well positioned for property market growth in the foreseeable future.

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