Panama City is the financial hub of Latin America, home to more than 100 banks, and a base for business owners across Central and South America. From the outside, Panama City looks like a mini-Miami. Take the main coastal road, Avenida Balboa, out of the city centre, and you’ll come across Casco Viejo—the UNESCO world heritage site that is the “Old Panama”.
Despite its history, Casco Viejo remains the heartbeat of the city. Around 25 years ago, this area was very underdeveloped and felt relatively unsafe. It was lacking a great deal in places to eat, drink and socialise, with only a handful of shops and restaurants to its name.
However, over the last couple of decades, major players in infrastructure and tourism have swooped in to see incredible renovation projects through to completion. These companies began to populate Casco Viejo with high-end hotels and restaurants, as well as modern co-living spaces and residential flats. With investment pouring in, the region began to attract visitors and expats from around the world, and today, Casco Viejo is one of the most renowned neighbourhoods in the country.
Walking around, Casco Viejo has a completely different feel from the rest of the city. The landscape is similar to the French Quarter in New Orleans with its beautiful colonial buildings and vibrant culture.
You won’t see any skyscrapers in Casco Viejo. It’s mostly historic buildings that have been renovated, and none are higher than two-to-three stories high.
Santa Familia is the centrepiece of the residential market in Casco Viejo right now. If you are a wealthy foreigner and want to live a few months a year in the best part of Panama, this project is ideal for sure.
Better yet, prices in Casco have gone up two-to-three times more than in any other part of the city over the last two decades. Some local people avoid Casco Viejo because traffic is heavy and there isn’t much parking, but the environment is first class and as a visitor, the area has great energy.
Bordering Casco Viejo is the Santa Ana neighbourhood. Santa Ana is kind of like Brooklyn. A brand-new art gallery is coming onto the scene in Santa Ana, and it seemed to me like the hipsters are moving in. I’d say that development will ramp up over the next five years and Santa Ana will blend into Casco Viejo. While retirees might flock towards the more established Casco Viejo, there is an opportunity in Santa Ana for those looking to catch a deal before it blows up.
Other neighbourhoods to note
San Francisco is a trendy residential pocket just north of Multiplaza, the best shopping centre in the city. There are lots of young professionals here, and despite its many high-rise buildings, the area has a real residential feel. That said, it also attracts a lot of tourists. Loom is one of the leading residential projects in this district and is ideal for those looking for a fully managed rental investment (with up to 9.7% net yield). The developers are well-established in Panama, with a history of completed projects.
Boquete is humming with American tourists and is essentially an undiscovered Costa Rica, famous for coffee, hiking and other outdoor activities.
OBarrio is close to the banking district. It has a European feel and is dotted with trees. A lot of locals live in OBarrio. There are nowhere near as many new developments here compared to other parts of the city.
Further afield, you’ll find Venao five hours in the car from Panama City. As a beach town with a historic surfing appeal, many are willing to go the distance to see what Venao has to offer.
Venao is where Selina opened its first Panama hotel, and with a ton of trendy restaurants and bars, it strikes me as an up-and-coming location in the Panama real estate market.
Panama City: A hotspot for investors
Many people are moving to Panama City for tax reasons. If you are living in Panama and doing business that brings money in from abroad, you pay no tax. The personal tax rate is 10%, whilst the company tax rate for residents is 25%. If you invest in Casco Viejo or Santa Ana, you’ll pay no property or capital gains tax. There is also a government program where buyers pay 3% interest on loans.
The most active buyers in the market seem to be Colombians, followed by Americans and Canadians.
In doing basic research, I feel like Casco Viejo drives the nightly rates. There are several hotels commanding $300-$400 per night down here. I stayed in a really nice Airbnb in one of the central squares for the last 2 nights of my trip, which cost around $275 per night.
Outside of Casco, the rates seem very cheap. I saw the W Hotel on hotels.com for $104 per night, and some other really nice ones for not much more than $100. Wealthy visitors want to be in Casco Viejo, but there is a short supply of nice accommodation. On the other hand, the city centre is overflowing with 60-story hotels and residential towers, so prices are naturally lower.
Looking at the Panama real estate market as a whole, it is the residential pockets outside of the main centre (Casco Viejo, Santa Ana, San Francisco etc) that appear to me the best places for investment. These areas are on the rise, with new developments springing up and tourists piling in. Despite this, there is still a shortage of supply combined with a strong demand for residential properties. Rental rates are higher here than elsewhere in the city, and investors would be wise to jump on these areas as Panama continues to lead the way for Latin America.